News / Asia

    India Hikes Interest Rates to Control Rising Prices

    India's opposition Bharatiya Janata Party (BJP) senior leader L.K. Advani, center, with party supporters march towards Indian parliament to protest against the price rise in New Delhi, India (File Photo)
    India's opposition Bharatiya Janata Party (BJP) senior leader L.K. Advani, center, with party supporters march towards Indian parliament to protest against the price rise in New Delhi, India (File Photo)

    India has hiked interest rates for the sixth time this year, in a bid to tackle high inflation. One of the government's most challenging problem is to curb rising food prices.      

    Just days ahead of India's main festival, Diwali, shoppers crowd a popular market in New Delhi.  They have come to buy traditional Indian sweets, nuts and other gifts which are customarily exchanged with friends and family.

    But rising costs of these items have cast a dampener on the Hindu festival of lights. Shubha Gupta says prices are up substantially, compared to last year.

    "Giving gifts is a problem.  I mean we have to make compromises," said Gupta.  "We are not going in for sweets and all, but we will go in for other things."

    A huge hike in food prices has emerged as the toughest problem for the government to tackle, as India copes with persistently high inflation.  Although overall inflation is down to about eight and a half percent, food inflation is hovering around 15 percent.

    Citing inflation as an overriding concern, the Central Bank Tuesday raised interest rates by a quarter percentage point.  It is the sixth time this year interest rates have been hiked in a bid to tame inflation.

    The deputy secretary of the Planning Commission, Montek Singh Ahluwalia, says inflation continues to be an issue.   
    "It is true that inflation is still at a range which is not comfortable, although, as we have been saying, it is going down," said Ahluwalia.

    Policy makers say the rising interest rates will not disrupt the momentum of growth in the economy, which has recovered from the global financial crisis.

    The return to growth of around eight and a half percent is providing some compensation for the middle classes.

    Among them is Varsha Jain.  As she goes around the market, she admits that her budget is under strain.

    But she says salaries have been increasing and, therefore, it is not surprising that shopkeepers have also raised food prices.

    However, millions of poor people in the country, who are marginalized by the growing economy, are finding it particularly hard to cope with the higher food prices.

    Tulsi Ram, who is selling flowers on a pavement outside a confectionery shop, says the rising prices have no impact to those who are earning well, but he will have to cut down his purchases for the festival. 

    The government was hoping that good monsoon rains and an ample harvest would tame food prices.  But that has not happened.

    Finance Minister Pranab Mukherjee said on Monday that the continued rise in the cost of living is a matter of concern. The government is hoping that the steps taken to control prices, such as raising interest rates, will bring down inflation to about six to seven percent, by March.

    You May Like

    Video For Many US Veterans, the Vietnam War Continues

    More than 40 years after it ended, war in Vietnam and America’s role in it continue to provoke bitter debate, especially among those who fought in it

    Video Newest US Citizens, Writing the Next Great Chapter

    100 immigrants graduated Friday as US citizens in New York, joining the ranks of 680,000 others every year in cities across country

    Family's Fight Pays Off With Arlington Cemetery Burial Rights for WASPs

    Policy that allowed the Women Airforce Service Pilots veterans to receive burial rites at Arlington had been revoked in 2015

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora