Much to the discomfort of consumers, food articles will be costlier by up to 27 percent by 2020 if the global slowdown continues and investment in agriculture falls, says a US think-tank.

Continuing the declining trend, inflation fell for the third consecutive week to over a five-month low of 8.84 percent, providing room to RBI to signal cut in interest rates to spur economic growth amid fears of moderation.

Finance Minister P Chidambaram on Monday said India must banish the thought of recession even though the overall outlook for the economy continues to be of "cautious optimism" in the face of global turbulence.

Consumer prices plunged by the largest amount in the past 61 years in October as gasoline pump prices dropped by a record amount.

"Let me assure you that inflation is coming down and in recessionary circumstances, industry will automatically soften prices," Planning Commission Deputy Chairman Montek Singh Ahluwalia told reporters in the capital.

There are the everyday concerns of spiralling prices, but a bustling corner of the Indian capital is also battling communal profiling and its grim consequences.

The wholesale price index rate fell sharply to 8.98 percent for the week ended November 1 on account of declining prices of fuel and manufactured goods.

China's inflation rate hit a 17-month low of 4.0 percent in October, down from 4.6 percent the previous month, the government said on Tuesday.

With tomatoes touching Rs 50 a kilogram, the humble dal selling at upwards of Rs 60 a kg and chicken at Rs 120 per kg from Rs 90 only a fortnight ago, political parties will have to convince people what they will do to bring down prices as they prepare for the electoral battle.

Inflation rose to 10.72 percent for the week ended October 25 on account of higher prices of cereals and vegetables.

Faced with a looming recession and rapidly falling inflation, Europe's two leading central banks are expected to cut rates this week as monetary authorities around the world step up efforts to slash the cost of money.

Lower prices of food and non-food items pushed down inflation to 11.07 per cent for the week ended October 11, from 11.44 per cent a week ago.

Finance Minister P Chidambaram on Wednesday said the fundamentals of the Indian economy are strong and assured the Rajya Sabha that policy rates can be revisited if inflation continues to moderate.

The Reserve Bank on Monday reduced its key short-term lending rate (repo) by 100 basis points with immediate effect, a move that will help lower interest rates and spur consumption to keep the economy ticking.

Inflation fell to 11.44 per cent for the week ending October 4 on account of decline in oil prices and manufactured goods, giving some respite to the government which is battling the impact of global meltdown.

Inflation fell marginally to 11.80 percent for the week ended September 27 on account of declining prices of food items, including cereals and pulses.

Inflation fell to 11.99 percent for the week ended September 20 from 12.14 percent a week earlier.

Data on India's annual rate of inflation for the week ending on September 20 will be released on Friday.