Friday 4 April 2008

Food prices drive India inflation

Inflation in India has hit a three-year high as a result of spiralling food and energy costs, official figures show. India's wholesale price index, released weekly, hit 7% for the year up to 22 March, the highest since December 2004. The government has been taking steps to control prices, banning exports of non-basmati rice and scrapping import duties on cooking oils and maize.
Economists said the data could trigger a rise in interest rates this month, earlier than many had expected. India's Economic Times says the government is considering a price ceiling on commodities if all other measures fail to bring down inflation - a law last used in the 1970s.
http://news.bbc.co.uk/1/hi/business/7330045.stm

Try to evaluate the methods being used by the Indian government in an attenpt to curb the rise in food prices.

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