Annual inflation, measured by the wholesale price index, India's main price measure, fell to 8.23 percent in January from 8.43 percent the previous month, a government statement said.

But with India's inflation still the highest among major Asian economies, economists forecast the central bank would raise interest rates next month for the eighth time in just over a year to try to tame rising prices.

Inflation has become a focal issue of discontent in the country of 1.2 billion people as the cost of daily goods rises.

A weekend opinion poll published by India's biggest circulation English-language daily The Times of India found inflation was beginning to "seriously hurt" family household budgets.

Reflecting rising public unhappiness, six out of seven respondents blamed the ruling Congress-led national government or state administrations -- or both -- for climbing costs.

The wholesale price index showed food prices were up an overall 15.7 percent from a year earlier while vegetable costs have risen 65 percent.

"Inflation is stubbornly sticky, which calls for continued central bank tightening," said HSBC India economist Leif Lybecker Eskesen.

The data comes as Asian economies from South Korea to giant neighbour China battle inflation pressures with global prices of crude oil and commodities rising.

India's central bank has been the most hawkish in the region in seeking to avert a destabilising wage-price spiral but inflation still remains above its target of 5.5 percent.

"We expect another quarter point rise in March as inflation is still above the central bank's tolerance level," Dharmakirti Joshi, chief economist at leading Indian credit rating agency Crisil, told AFP.

Inflation and a slew of corruption scandals have tarnished the Congress government's image in its second term as it faces a series of state elections that could determine its future in general elections due in 2014.

The Times poll also found that 83 percent of respondents believe corruption is at a record high.

Economists said India must increase rates even if it means slower economic growth.

"The monetary tightening will depress activity, but India requires a period of sub-trend growth to ease some of the bottlenecks present in the economy," said Credit Suisse economist Robert Prior-Wandesforde.

He expects growth to slow to 7.7 percent next year from the 8.6 percent forecast by the government for the current fiscal year ending in March.

Premier Manmohan Singh has described inflation as a "serious threat" to economic growth and called for urgent steps to contain prices.