The wholesale price-based inflation was at 0.37 per cent in the previous week compared to 12.13 per cent during the corresponding week a year ago.
Overall, prices of raw food items climbed by 16.32 per cent on annual basis, driven mainly by a 49.44-per cent rise in vegetable prices.
Among food items, potatoes turned costlier by 81 per cent, pulses by 20 per cent and rice by 17 per cent.
Processed food items rose further from last week. Their prices were up 13.13 per cent on yearly basis as sugar turned dearer by 44.47 per cent.
However, when seen from a weekly perspective, price rise in essential food items did not appear that sharp except for fish that was up 13 per cent. Other food items rose in the range of one to two per cent or saw a decline.
At the same time, some fuel items like furnace oil got expensive by 12 per cent and light diesel oil by 2 per cent. Analysts say more than expected rate of price rise could push inflation above 6 per cent by the end of the current fiscal.
Commenting on the price rise, finance minister Pranab Mukherjee said rising inflation is a matter of concern. "I have told earlier also that there is an inflationary potentiality and inflation may go up.
"Naturally, whenever it goes up, it's a matter of concern but at the same time the type of situation which developed cannot continue," he said.
"We had a number of weeks of negative rate of inflation which cannot continue for long," he added.
According to Yes Bank chief economist Shubhada Rao, "It (inflation) is moving at faster pace than anticipated. At this rate there is a likelihood that it may rise above 7 per cent by March 2010."
However, Reserve Bank of India is likely to maintain a neutral stance in its second quarterly review (October 27) of the credit policy, said Crisil principal economist D K Joshi.
Among manufactured products, country liquor turned costlier by 5 per cent, vitamins by 7 per cent, bottles by 18 per cent and lead ingots by 3 per cent.
Butter, ghee and coconut oil also became dearer by 4 per cent, 2 per cent and one per cent respectively.
Although inflation continues to remain below one per cent for the third week in a row, the 52-week average for the week ended September 19 was at 3.03 per cent.