New Delhi, Sept. 9 -- Prices of common vegetables, which typically fan inflation during the monsoon months, have eased to their lowest levels in three years on account of higher output, helping to keep a lid on middle-class angst.

Cheaper onion and potato, despite supply-disrupting torrential rains, have come as a relief for policymakers and consumers. Vegetables such as tomato, onion and potato tend to stoke volatility during the rainy months, keeping headline inflation under pressure.

Potato and onion prices declined 31% and 37% year-on-year, according to data from government's price monitoring cell. Expected robust harvests of the potato have calmed markets after a supply crunch last year, when output shrunk nearly 7%, pushing prices...