Inflation data released on Thursday showed mixed results as food inflation dropped by 0.06 per cent to 17.81 per cent, prices of essential commodities climbed 0.4 per cent. The figures revealed by the government were for the week ended February 27, 2010.

Arrival of new crops of wheat, sugar and lentils helped food prices cool slightly from the previous week. Food price inflation was recorded to be 17.87 per cent for the week ended February 20. Fall in sugar prices remained one of the major reasons in cooling down the food prices.

Earlier this week, one of the Prime Minister's economic advisors, Montek Singh Ahluwalia informed that sugar prices have fallen close to 19 per cent since the beginning of the second week of the year.

However, post the budget announcement prices of essential commodities have shown an upward trend due to the hike in petrol and diesel prices by finance minister Mr. Pranab Mukherjee.

Analysts believe this is just the beginning and once the budget announcements are fully implemented inflation will shoot up further. They anticipate a minimum four per cent rise in net inflation due to the budget proposals.