Wholesale price index (WPI) during the April-september period stood at 2.61 per cent compared to 6.23 per cent in the corresponding period of the previous year.
The index for food articles group declined by 1.4 per cent as tea, fruits and vegetables, poultry chicken, fish-marine, jowar, pork and moong became cheaper.
Similarly, fuel and power index also declined by 0.3 per cent due to lower price of petrol,aviation turbine fuel and furnace oil. However, prices of lubricants and high speed diesel moved up.
The development comes a day after the retail inflation declined to 6.46 per cent in September compared to 7.8 per cent in August, on back of sharp decline in vegetable price.
Seizing the development, India Inc said that the drop in inflation would also help dampen inflationary expectations in the future and signal the onset of a low inflation cycle. ''This would provide space to the RBI to review its cautious stance on interest rates,''Chandrajit Banerjee, director general, CII, said in a statement.