India's food inflation has fallen sharply to the level of 1.81 per cent in the week December 10 compared to .35 per cent recorded in the previous week.

The fall in the food inflation to its lowest level in almost 4 years is manly due to the fall in price of potatoes and onions and other essential commodities in the country. The decline in food inflation indicates an overall easing in inflation in the country. The food inflation is at its lowest level since the week till February 9, 2008, when it was recorded at 2.26 per cent.

The prices of onions fell 49.38 per cent year-on-year during the week while potatoes become cheaper by 34.39 per cent. Wheat prices also declined 4.21 per cent and vegetables become cheaper by 26.37 percent, according to data released by the government.

The prices of pulses rose by 14.22 per cent, while milk was more expensive by 11.19 per cent and eggs, meat and fish pries increased by 9.25 per cent. Inflation in the overall primary articles category stood at 3.78 per cent

Analysts say that the fall in inflation is due to a good kharif harvest as well as a high base. The fall comes as a relief to the government and the central bank, the Reserve Bank of India (RBI). The RBI had increased its key interest rates more than more than a dozen times since March last year in order to control inflation, which remained high in recent months.

Analysts say that the increasing interest rate is beginning to affect economic growth in the country. The industrial growth fell 5.1 per cent in October for the first in years. The fall in inflation might allow the RBI cut interest rates when it reviews the monetary policy on January 24.