India's annual rate of inflation, based on wholesale prices, fell to nil for November from 1.77 percent for the previous month and 7.52 percent for the corresponding period of the previous year, on the back of falling fuel prices globally.

 

 

 Data released Monday by the commerce and industry ministry on official wholesale price index (WPI) suggests that with a fall in the numbers for November, the overall price level in the country now was at the same level as that in the corresponding period of last year.

 

 The most notable decline was in the index for fuels which fell by 5.2 percent, while for primary articles and manufactured products, the two other main sub-groups, the decline was 1 percent and 0.3 percent, respectively.

 

 Onions fell 56.28 percent as compared to a contraction of 59.77 percent in October while inflation in potatoes stood at 34.10 percent. For vegetables on the whole, the contraction was 28.57 percent.

 

 Within food articles, prices of eggs, meat and fish rose during November at 4.36 percent.

 

 The wholesale decline comes on the back of retail inflation declining to a record low of 4.38 percent in November from 11.16 percent during the corresponding month last year.

 

 The retail inflation rate recorded is the lowest since India started computing consumer price index (CPI) in January 2012. The retail inflation eased for the fourth straight month in November. 

 

 The industry's pitch for rate cuts and economic reforms has become sharper, with factory output slipping further to log a 4.2 percent drop in October.

 

 Describing the data as reaffirming the moderation of inflation "which in turn would have a beneficial impact on inflationary expectations", the Confederation of Indian Industry (CII) said the RBI should "urgently move towards a growth propelling monetary policy."

 

 "The RBI should not wait till the next monetary policy announcement and reduce interest rate substantially, as industrial production is in the red and investment and consumption demand are yet to show visible signs of a pick-up," it added.  

 

 Commenting on the inflation data, the Federation of Indian Chambers of Commerce and Industry (Ficci) said that "while the issue of inflation is being handled well, the sharp dip in manufacturing growth reported in the latest monthly release is a matter of concern. This needs to be tackled on a war footing."

 

 "Amidst the current situation, a cut in the interest rates will at least provide some impetus to domestic demand," Ficci president Sidharth Birla said in a statement.

 

 Of most concern in the data released on Index of Industrial Production (IIP) was a 7.6 percent decline in manufacturing output that industry has been warning against, while calling upon the Reserve Bank of India (RBI) to cut interest rates and the government to push reforms.

 

 The RBI has set a target for CPI inflation at 8 percent by January 2015 and 6 percent by January 2016.

 

 It has retained the economy's growth projection for current fiscal at 5.5 percent and said the future policy stance will be influenced by the inflation outlook.