India's annual inflation rate based on wholesale prices eased to 1 per cent in March from a rise of 2.26 per cent in February, official data showed on Wednesday.

The fall in March has largely been on account of a sharp fall in food prices in the country. Food inflation in March fell to 4.91 per cent from 7.79 per cent in the previous month.

On a year-on-year (YoY) basis, the Wholesale Price Index (WPI) data furnished by the Ministry of Commerce and Industry on Monday showed a decelerating trend during March, as inflation had risen to 3.10 per cent during the corresponding month of 2019.

"Build up inflation rate in the financial year so far was 1 per cent compared with a build up rate of 3.10 per cent in the corresponding period of the previous year," the ministry said in its review of 'Index Numbers of Wholesale Price in India' for March.

The rate of inflation based on WPI Food Index consisting of ‘Food Articles' from Primary Articles group and ‘Food Product' from Manufactured Products group decreased from 7.31 per cent in February 2020 to 5.49 per cent in March 2020.

Also, the index for manufactured goods remained static in March, but for fuel and power category fell by 3.1 per cent. The index of food article group also declined by 2.1 per cent. It remained static in manufacturing.

For January 2020, the annual rate of inflation based on final index stood at 3.52 per cent as compared with 3.10 per cent (provisional) respectively as reported in February.