World | India
Inflation dampens Congress' early poll hopes
The Congress Party, which heads the government, has ensured that Rahul Gandhi, the son of party boss Sonia Gandhi and the latest of the dynasty to be tipped as a future leader, has been credited with propelling a rural job project's expansion.
- Reuters
- Published: 00:34 April 5, 2008
New Delhi: India's food bills are soaring and the economy is slowing as high interest rates bite, threatening to derail an election strategy the ruling coalition hopes will return it to power before May next year.
At the end of February, the finance minister drew loud cheers from governing lawmakers as he unveiled a populist budget loaded with eye-catching tax cuts and a massive $15 billion (Dh55 billion) scheme to write off the debts of millions of small farmers.
Analysts saw it as the launch pad for elections and said the government was priming its armoury should it decide to take on fired-up communist allies over a controversial nuclear energy deal with Washington, a fight which could trigger early polls.
But the vote arithmetic now has a new focus as the cost of a bowl of rice and less happy macroeconomic indicators trump anger over atomic co-operation with the United States, which the left fears is trying to erode India's independent foreign policy.
The Congress Party, which heads the government, has ensured that Rahul Gandhi, the son of party boss Sonia Gandhi and the latest of the dynasty to be tipped as a future leader, has been credited with propelling a rural job project's expansion. And at home, economic growth, while still strong, is already edging down.
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