Tight monetary and fiscal measures taken by the government put some brake on rising prices as inflation declined to 6.63 per cent during the week ended February 10 from 6.73 per cent a week earlier, though it was still much higher than the RBI's projection for this fiscal.
Lower prices of food products, including vegetables, egg, mutton, poultry chicken, condiments, spices, sooji, gur, atta, sugar and some manufactured products led the fall in inflation, which still was the second highest this fiscal.
Wholesale prices-based inflation stood at 3.81 per cent a year ago.
The government drew flak from various quarters as inflation continued to rise over the past many weeks despite tight monetary polices and concessionary fiscal measures.
The government, in fact, has decided to set up a special monitoring cell to keep a daily watch on price situation and provide support to states. Prime Minister Manmohan Singh had on Thursday asked states to approach the cell for removing bottlenecks in the availability of essential commodities.
This comes in the wake of Congress Working Committee expressing displeasure over rising prices.
Many of the measures taken like hiking Cash Reserve Ratio by the Reserve Bank and cut in petroleum prices would be reflected in inflation data to be released in the weeks to come, analysts said.
Also, pressure on commodities like wheat, pulses would ease with the arrival of fresh crop, Finance Minister P Chidambaram had said on Thursday.