Inflation at 3-yr low, interest rates may fall Relief Likely For Govt & Home Loan Borrowers

New Delhi: The inflation rate slowed to a more than three -year low of 5.96% in March on the back of softening vegetable, fruit and milk prices, brightening the prospects of an interest rate cut by the RBI while bringing relief to the politically beleaguered UPA government.      Lower interest rates will provide relief to thousands of borrowers reeling under the burden of high equated monthly installments on their home loans.      Data released by the commerce ministry on Monday showed the widely watched wholesale price index (WPI) rose 5.96%, slower than the previous month's 6.84% and in line with the RBI's expectations. The fresh inflation level triggered celebrations in the government, among industry and on the bourses. Inflation is coming under control: Govt New Delhi: Much to the relief of the government, inflation slowed down to 5.96% in March. Stubborn inflation has been a policy headache for nearly three years, and this is the first time in 40 months that inflation has dropped below the 6% mark. Politically, the deceleration in price rise augurs well for the government as it deals with popular sullenness over price rise, corruption and the perception of inaction. The sense of relief in the government was evident from Planning Commission deputy chairman Montek Singh Ahluwalia's reaction to the data. "Inflation behaviour is consistent with what the government has been saying-—that it is slowly coming under control," Ahluwalia said.      There has been a rising clamour for a reduction in rates, with India Inc calling for aggressive cuts against the backdrop of easing price pressures, saying that it was crucial for the revival of economic growth. The government also revised upwards the January number to 7.31% from the previously reported 6.62% largely due to the impact of the diesel price increase.