According to the annual report card on the state of the country's economy, the average WPI (wholesale price index) based inflation declined to 3.4 percent during 2014-15 from an average of 6 percent during the previous year
The survey said that the decline in inflation was caused by lower food and fuel prices.
The retail inflation measured by the consumer price index (CPI) also declined to an all time low of 5 percent in the third quarter of 2014-15 after having remained stubbornly sticky at around 9-10 percent for the last two years.
The survey elaborated that the main factors causing moderation in inflation include both global factors as well as domestic measures.
"Global factors, namely persistent decline in crude prices and softness in the global prices of tradables, particularly edible oils and even coal, helped moderate headline inflation," the survey sid.
Tight monitary policy, said the survey helped contain demand pressures, creating a buffer against any external shock and keeping volatility of the rupee under check.
"The swift decisive steps taken by the government also helped control the stubbornly persistent inflation-particularly food inflation," the survey said.
The survey which was tabled a day ahead of the union budget said that substantial decline in inflation was observed in commodities where the government had taken effective measures.
The government took a series of measures to improve availability of food-grains and de-clog the distribution channel.
It allocated additional 5 million tonnes of rice to below and above poverty line (BPL and APL) families in the states, pending implementation of the national food security act (NFSA).
Allocation of 10 million tonnes of wheat was also made under open market sales for domestic market in 2014-15
There was also a moderate increases in the minimum support price (MSPs) during the last and current season.
The central government also send advisory to the states to allow free movement of fruits and vegetables by delisting them from the agricultural produce marketing committee (APMC) Act.
The survey pointed that by bringing onions and potatoes under the purview of the essential commodities act 1955 allowed the state governments to impose stock limits to deal with cartelisation and hoarding.
Imposing a minimum export price (MEP) of $450 per metric tonne (MT) for potatoes with effect from June 26, 2014 and $300 per MT for onions from August 21, 2014 also helped in subsiding food inflation, the survey added.