Govt announces steps to curb food inflation

Food inflation, which stood at 16.9% in early January, is a major headache for a government already battling multi-billion dollar corruption cases that have emboldened the opposition.

Rising prices of basic food stuffs, such as onions, could threaten the Congress party’s chance in elections in states like West Bengal and Tamil Nadu that are key for Singh’s coalition to keep a majority in parliament.

Government has already taken a series of measures from banning onion exports to putting a pause on sugar exports, but food inflation has remained stubbornly high despite policymakers’ forecasts of a slowdown.

The central bank raised its key rates six times since March in a bid to tame prices and is expected to tighten further in January.

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