NEW DELHI - India’s annual rate of inflation fell by as much as 200 basis points to a historic low of 0.44 percent for the week ended March 7 against 2.43 percent for the week before, official data showed Thursday.

The statistics on wholesale price index, released by the commerce and industry ministry here, showed that the inflation rate dropped to an all-time low because of a decline of 1 percent in the index for primary articles and 0.8 percent in that for fuels over the week.

The index for manufactured articles remained unaltered.

Economists explain that low inflation rate does not necessarily mean that prices have fallen. Lower inflation rate only means the rate of rise in prices has come down, not the actual prices.

They also said wholesale indices are not fair representations of a prevailing price situation and that a more realistic picture is presented by retail prices that are taken into account while compiling the various consumer price indices.

In fact, the inflation rate as measured by consumer price index for industrial workers, which seeks to represent the impact of retail prices on the country’s workforce, had risen to 10.45 percent in January, compared to 9.7 percent in the previous month.

Similarly, consumer price index for urban non-manual employees suggests that the annual rate of inflation in 59 Indian cities had been 9.8 percent in December, the latest month for which data is available.

In fact, the disaggregated data further suggests that inflation in food and beverages was 13.4 percent - sharply higher than the single-digit inflation rate as reflected by data on the wholesale price index.

D.K. Joshi, principal economist at credit rating agency Crisil Ltd, said that the sharp decline in the rate of inflation was due to a high base last year.

‘Even if prices had not come down, the inflation would have still fallen. The inflation may also turn negative at 2-3 percent soon but it would be temporary,’ he said, linking the lowering inflation to fiscal and monetary measures to bring down prices.

Dalip Kumar, the head of projects at the National Council of Applied Economics Research (NCAER), a Delhi-based think tank, said inflation for food articles remained high since farm production had declined because of various factors.

‘As such, the prices of food commodities continue to remain on the high side despite the low inflation,’ Kumar said, adding agriculture output had declined 0.2 percent in recent months.

In a similar remark, Sajjan Jindal, president of the Associated Chambers of Commerce and Industry of India (Assocham), said even as the inflation has slipped to 0.44 percent the prices of primary food articles had not come down.

‘The impact of lowering inflation has yet to come to primary food articles,’ he said, adding: ‘The only concern is that the common man has yet to stand beneficiary on this record inflation rate but it will take some time.’

Jindal hoped that the Reserve Bank of India would take a cue from it and announce some more monetary measures soon to boost demand and infuse liquidity in the market.