There are few issues more politically sensitive in India than inflation or rising prices. With frequent elections across the federal framework and the Union government being seen as responsible for economic policy, ruling parties in India go to great lengths in order to keep prices in check.
Stubbornly high inflation rates in the final years of the Congress-led United Progressive Alliance government, following the global economic crash, are often credited as being one of the key reasons why it was voted out in 2014.
For most of the last seven years, Prime Minister Narendra Modi’s government has done well on this front. But recent developments should have the Bharatiya Janata Party worried.
Inflation is shooting up of late
For May 2021, India’s retail rate of inflation, measured year-on-year, was 6.3%. Rural inflation (6.48%) was higher than urban (6.04%).
This was above the Reserve Bank of India’s 6% upper threshold for inflation – the first time the limit was…