According to the Wholesale Price Index, the most observed cost-of-living indicator in India, the rate of inflation in the last week of March plunged to a three-decade low of 0.26 percent! With the economy suffering blows from the slowdown, there are heightened prospects of the Reserve Bank of India (RBI) announcing rate cuts at its next monetary policy meeting on April 21. Prime Minister Manmohan Singh has said low inflation has made provisions for "further moderation" in interest rates, in order to haul up the Indian economy undergoing its slowest-pace phase over the past six years.

As per the official data released Thursday, though there has been not much change in the rather high food prices, the wholesale price-based inflation, for the week ended March 28, fell by 0.05 percentage points from the earlier week's figures of 0.31 percent.

Even as inflation rate is inclining towards zero - it was negative in 1975, as noted by ICRIER Senior Consultant Joseph Mathew - the average price-rise rate still was fairly high at 8.4 percent for 2008-09, in comparison to 4.7 percent the year before.

Giving his opinion on the inflation-rate scenario, D K Joshi - Principal Economist, Crisil - said: "I expect a 50 basis point cut in the repo - short-term lending - rate by the RBI during the month as inflation is expected to slip into negative territory in a couple of weeks."