"During April-March 2007-08, the wholesale price index of rice surged by 6.35%, arhar 14.52%, milk 8.68%, wheat 5.57%. There was no change in sugar prices. The rise is steeper in the case of edible oil — mustard oil rose by a whopping 28.91% and coconut oil by 10.8%."
If food is taking 50% of your income, as it is for most Indians, then inflation like the above, may force the Indian govt to act. Maybe by restricting any exports, appreciating the rupee, subsidising the commodities themselves. This looks like a brake is going to be applied to their economy, unless of course they disregard food inflation and look after the growing middle class. hm.
