"Will monetary policy action will be able to contain (food inflation)? "It will at best contain the second round implications and arrest the inflation expectations from moving on the higher side." The world's fifth-largest and second-most populous economy has a troubled history with inflation: price surges have created social and political instability in the past that the Modi government will be keen to avoid. Authorities were able to keep wheat and rice prices down, defying a global spike, thanks to a pandemic-era foodgrain distribution scheme. "Indian political history shows that food inflation has an immediate and visceral impact on the political mood and is something the Modi government has to take very seriously.

Source: The Star June 16, 2022 01:27 UTC