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

As US Strikes Syria, China Sees Parallels at Home

Beijing is debating how much support to give international coalition against IS militants and trying to figure out how many Chinese nationals may have joined group overseas More

CDC: Ebola Could Infect 1.4 M by 2015

US health officials say if efforts to curb the outbreak are not increased, cases will soar dramatically by early next year More

Video USAID Provides $231 Million for Girls Education in 5 Countries

US Agency for International Development partners with celebrities to call attention to importance of education for girls worldwide More

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.
Washington to Pyongyang: 'Shut This Evil System Down'i
X
Scott Stearns
September 23, 2014 10:52 PM
U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Washington to Pyongyang: 'Shut This Evil System Down'

U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video US, Gulf Allies Strike Islamic State Militants in Syria

United States forces have carried out strikes against Islamic State or ISIL militant positions in Syria - the first time Western forces have taken action on Syrian soil. Five U.S. allies from the Gulf joined the military action. Local reports suggest dozens of militants were killed. The U.S. also carried out unilateral missile strikes against a Syria-based terror group which Washington says poses an imminent threat to the West. Henry Ridgwell reports from London.
Video

Video High Intensity Focused Ultrasound Used to Kill Cancer Tumor

There is a new way of killing certain cancer tumors that allows the patient to go home on the same day. Surgeons at the Keck Medical Center of the University of Southern California became the first doctors to use this procedure on a patient with the help of high intensity focused ultrasound, or HIFU, and new robotic technology. Elizabeth Lee reports from Los Angeles.
Video

Video USAID Provides $231 Million for Girls Education in Five Countries

Hollywood stars Alicia Keys, Jennifer Garner and 30 others have voiced their support for a U.S.-backed initiative called "Let Girls Learn." The $231 million program, funded by the U.S. Agency for International Development, is aimed at ensuring public and quality education for girls worldwide. As VOA's Mariama Diallo reports, this new program will focus on five countries in Africa, South Asia, Latin America and the Middle East.
Video

Video UN: Relocation of Bedouins in Israel Weakens Two-state Solution

Rural Bedouins living in disputed lands east of Jerusalem could soon find themselves forcibly relocated. VOA's Sharon Behn reports from Jerusalem that while Israel defends the move as in the Bedouins’ best interests, the United Nations says the plan threatens the survival of the two-state solution with Palestinians.
Video

Video NASA’s MAVEN Probe Enters Mars Orbit

NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video Prolonged Drought Plagues SW Oklahoma Farmers

Parts of western Texas and southwestern Oklahoma have been in drought conditions for several years running and the deficit in rainfall has taken a heavy toll on cotton and grain production. Oklahoma Governor Mary Fallin says the state has suffered $2 billion in agricultural losses since 2011. There has been rain in recent weeks, but, as VOA’s Greg Flakus reports from Altus, Oklahoma, for most farmers it has been too late.
Video

Video For West Ukraine City, Conflict Far Away Yet Near

The western Ukrainian city of Lviv prides itself on being both physically and culturally close to Western Europe. The Russian-backed separatists in the eastern part of the country are 1,200 kilometers away, and seemingly even farther away in their world view. Still, as VOA’s Al Pessin reports, the war is having an impact in Lviv.
Video

Video Saving Global Fish Stocks Starts in the Kitchen

With an estimated 90 percent of the world’s larger fish populations having already vanished, a growing number of people in the seafood industry are embracing the concept of sustainable fishing and farming practices. One American marine biologist turned restaurateur in Thailand is spreading the word among fellow chefs and customers. VOA Correspondent Steve Herman reports from Bangkok.
Video

Video Chinese Admiral Key in China’s Promotion of Sea Links

China’s President last week wrapped up landmark visits to India, Sri Lanka and Maldives, part of a broader campaign to promote a new “Maritime Silk Road” in Asia. The Chinese government’s promotion efforts rely heavily on the country’s best-known sailor, a 15th century eunuch named Zheng He. VOA's Bill Ide reports from the sailor’s hometown in Yunnan on the effort to promote China’s future by recalling its past.
Video

Video Experts Fear Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid