The annual inflation rate, based on the wholesale price index (WPI) declined by 0.50 percentage points to 2.03 per cent (provisional) from 2.53 per cent (P) recorded in the previous week. The rate was 8.12 per cent in the corresponding week a year ago.

The inflation rate has not gone below 2.03 per cent since 1980, the year when the government started keeping the inflation record on weekly basis. Prior to 1980, records are neither easily available nor comparable as data compilation was on yearly basis, official sources said.

The steep fall in inflation rate is mainly on account of a good agricultural production last year with foodgrain production expected to reach a record 203 million tonne, finance ministry sources said. The sources said with a normal monsoon forecast in the current year, general pricelevel was likely to remain stable in the coming months.

However, inflation based on final index calculated on a point-to-point basis stood at 3.9 per cent for the week ended May 1 as against 3.7 per cent calculated on provisional index.

Despite a sharp fall in inflation rate, WPI for all commodities (base: 1981-82=100) declined marginally to 357.1 (provisional) from 357.2 (P) In the previous week. The overall index declined during the week mainly on account of a fall in index for primary food articles compared to the previous week.