Indian food price is increasing over a year. Economists have start worrying about the increasing food price because it is increasing at a yearly tempo of 18%. Food price increases in India has pressed the cost of comprehensive supplies like wheat plus barely to high records.
The latest rise in Indian food inflation is the jump of the price of onion. Onion is considered to be the important ingredient in Indian cuisine and in recent weeks it has developed into a national scandal. Manmohan Singh, the country’s Prime Minister was forced to step into the problem and now forced to import onion from Pakistan. Now the price of the onion has come down to a reasonable level. Onion price rose due to unseasonable rains in onion growing region.
The International Monetary Fund has urged the RBI to maintain a tight monetary policy and keep raising interest rate to tame inflation. It has been seen that there is an structural rigidity in flood inflation. Continuous pressures are putting on to Reserve Bank of India to raise interest rate.
The Deputy Governor of Reserve Bank of India expressed his optimism in March 2010, of Indian wholesale price index based inflation of falling price of food and oil prices. Cost of living has been increased much higher for the Indian population. The increase in inflation will have both political and economic implications for the government. It has been noticed that the gas price has always been in news for past few years.
In March the price of the gas raised about 10.6% and it become more expensive to work with. This also led to an increase in cost of transportation. There is always an increase in oil price which affect the society and economy very badly. The good news is that the price of the cloth has reduced slightly. A stable economy means a better chance of growth in GNP, jobs and investment.