India’s new government has made fighting inflation its top priority, easing concern about the potential for conflict with the country’s hawkish central bank.
Outlining Prime Minister Narendra Modi’s economic plan to parliament earlier this week, President Pranab Mukherjee said the government would address bottlenecks that have caused food prices to rise more quickly in India than in other major economy.
Annual consumer price inflation in India, Asia’s third biggest economy, hit a three-month high of 8.59 percent in April – driven mainly by higher food prices.
The Reserve Bank of India has hiked interest rates three times since September to curb inflation and there was some debate before Modi’s landslide election win last month about whether the new government would pressure the central bank to pull back from its hawkish inflation stance.
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