The data came as a huge relief to the policymakers, especially the Reserve Bank of India (RBI) as it faces the task of another monetary policy review this month. The softer data is likely to prompt RBI to hold rates again in the upcoming review while also providing some relief to the poll-bound UPA government.
Data showed that food inflation fell to 12.16 per cent in December 2013 from 14.72 per cent in the month before. This drop was mainly led by slower growth in vegetable inflation as it eased to 38.76 per cent in December from 61.6 per cent in November.
RBI is scheduled to review the monetary policy on January 28 and is under pressure to ease lending rates amid slowing economic growth as government keeps its spending under check to meet fiscal deficit target.
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