This month's CPI remained same as August 2017 at 3.28%, however lower compared 4.39% in the corresponding month of the previous year.
In a boost to the economy, the factory output growth in August surged to 9-month high of 4.2 per cent, indicating an acceleration of industrial activities after the initial setback due to GST-related destocking.
On the other hand, the industry group "Manufacture of furniture" has shown the highest negative growth of -16% followed by -15.1% in "Manufacture of tobacco products" and - 11.4% in "Printing and reproduction of recorded media". Meanwhile, economists had expected the inflation to rise to 2.4 percent.
The latest print is lower than 4.39 per cent recorded in September a year ago.More news: Trump loses patience with Puerto Rico
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On a monthly basis, consumer prices edged up 0.1 percent from August, when it dropped by 0.2 percent.
The factory output growth, measured on the Index of Industrial Production (IIP), for April-August period accelerated to 2.2 percent from 5.9 percent in the same period last fiscal, as per the data released by the Central Statistics Office on Thursday. The consumer price index (CPI) based inflation stood at 4.39 percent during the same month previous year.
The index of industrial production (IIP) growth was 4 percent in August 2016. Inflation not easing further dampens hopes of India Inc for interest rate cuts. The rate continues to be below 4 per cent, the mid-term target set by the Reserve Bank of India (RBI).