Monsoon dependence

Food inflation can increase risks

The Union government is backing the Reserve Bank of India (RBI) with measures to contain inflation. After having indicated that it was willing to use trade policy to contain prices, the government last week decided to impose an export duty on onions. This, however, was not the first step. The government recently imposed restrictions on exports of rice and the stockholding of some other food items, such as pulses. The consumer price index (CPI)-based inflation rate nonetheless increased to a 15-month high of 7.44 per cent for July, and is expected to remain above the central bank’s tolerance band for