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India's wholesale price index raised 0.44 percent in the 12 months to March 7, below the previous week's annual rise of 2.43 percent, government data showed on Thursday.Inflation in India drastically fell to a two-decade low of 0.44 per cent in the first week of March as food and fuel items turned cheaper.

Wholesale price-based inflation declined by 1.99 percentage points from 2.43 per cent during the week ended February 28, fuelling expectations that the Reserve Bank of India would cut interest rates to spur the economic growth.

Inflation rate for food, beverage and tobacco was slower at 2.7 percent in March from 3 percent in February; housing and repairs, 1.4 percent from 2.3 percent; fuel, light and water, 1.2 percent from 1.5 percent; services, 2.2 percent from 2.4 percent; and miscellaneous items, 1.8 percent from 2 percent.

The annual inflation rate within the National Capital Region alone also eased by 0.3 percentage point at 2.1 percent in March from 2.4 percent in February. In areas outside Metro Manila, the inflation rate was also slower at 2.3 percent in March from 2.7 percent in February.

After a year of spiraling prices, rising inflation, India is now heading towards deflation. The Indian economy may go into deflation by April as inflation is likely to fall below zero percent.