NEW DELHI, FEBRUARY 9: The chatter among stall holders and customers at a market in New Delhi may seem mundane but its subject could send shivers up politicians who remember toppled governments, election upsets and street protests.
Because the price of onions, a staple in the Indian diet, is heading north.
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Rising food prices in India have helped push widely watched annual wholesale price inflation above the central bank's estimate to a two-year high of more than 6 per cent.
Consumer prices are rising at 7-8 per cent a year, but many people feel official figures understate inflation.
Prime Minister Manmohan Singh has made beating inflation a top priority, highlighting how rising prices could be the Achilles heel of a booming economy and popular government.
Onions have held a special status-and obsessive media attention-in India ever since 1998 when the Bharatiya Janata Party (BJP) lost state elections in Delhi, due mainly to runaway prices for what are a staple of Indian meals.
Onion prices also helped push out a left-of-centre Janata Party national government in 1980.
This time round, it is not only onions. Newspapers have filled front pages almost every day with articles on costlier foodstuffs like wheat, edible oils and pulses.
"Prices of everything have gone through the roof whether it is vegetables, pulses, milk or fruit. We are a family of three. Running the house is becoming difficult day by day," Sushila Nayar, a 41-year-old housewife, said.
THREE POLLS IN OFFING
The government is worried. It faces three polls in northern states in February and an election in Uttar Pradesh in April.
"The issue of inflation has assumed centre stage because we have elections," said Mahesh Rangarajan, a political analyst.
Rising prices could also prove a rallying point nationally for the Opposition BJP who have ben struggling since losing the 2004 election to Congress.
Just this week several hundred women BJP supporters marched through Delhi shouting, "Sugar is up, wheat is up, pulses are up! Down with Congress!"
"Whenever inflation is a popular concern, an individual item like an onion can become a rally point for the opposition," said Saumitra Chaudhuri, economist at the credit rating agency ICRA.
Growth of around 8 percent a year has swelled the ranks of the middle classes, yet a quarter of India's one billion people lives on less than $1 a day. Many value price stability over growth.
"In some case the price of some pulses is almost equal to mutton. This is unprecedented. For a majority of Indians pulses are the main source of proteins," said Rangarajan, noting a family food bill went up 30 per cent in 2006.
Agricultural output has failed to keep up with rising demand, forcing the government to import wheat last year for the first time in six years. Production of pulses has stagnated.
The government has tried to combat inflation by cutting some import duties, while the central bank has raised its short-term lending rate to its highest in four years.
But prices show no sign of letting up.
Outside a row of shanties in the financial hub of Mumbai, Nizam Singh, 26, a sweeper, talked of the rising cost of living for a community where even running water is a luxury.
"What will the poor eat? We even have to pay Rs 2 for the toilet," he said.
