Government takes action to stabilise prices and prevent riots and unrest
By Ray Thibodeaux in New Delhi

Laxmi, a 43-year-old mother of four, has resorted to praying to her Hindu gods for cheaper food at her local temple in New Delhi, India's capital.

"The rising prices are having a huge impact on our family," Laxmi, who goes by only one name, said after offering a basket of bananas to a statue of one of the deities at the temple.

"For now, we are just trying to buy the cheaper versions of rice and cooking oil. It's a matter of coping until things get really bad," said Laxmi, whose husband is retired from a government job. She earns extra money as a substitute librarian, but the work is low-paid and infrequent.

Across India, inflation is soaring with no quick relief in sight, a sign that the country's economic boom appears to be winding down. Last week it surpassed 7.5%, more than twice the global average and a four-year high for the subcontinent.

The latest jump, some economists say, is being spurred by skyrocketing food prices, a serious concern in a country with around 40% of the world's malnourished people.

Some analysts see the recent turmoil as part of a global "silent tsunami" of dire hunger looming over half a billion of the world's poor as Western farmers - particularly farmers in the US, who contribute the majority of the world's food relief - convert more and more of their food crops into biofuels for cars.

"For two billion people, high food prices are now a matter of daily struggle, sacrifice and for too many, even survival," said Robert Zoellick, the World Bank president, in a recent speech. He warned that spikes in fuel prices and the cost of food, which has risen 45% in the past year, have put at least 30 countries at risk of potentially violent social unrest.

In India, spiralling inflation and sky-high food prices have become serious political issues that have already sparked riots in some parts of the country. The fear of more unrest spurred the government into action.

"The world community has not done enough to address this challenge," said India's prime minister, Manmohan Singh, in a nationally televised address.

"The government is fully alive to the challenge and has taken several steps to reverse the recent spurt in prices," said Singh, widely perceived here as a champion of the nation's poor.

So far, the government has banned exports of certain food, scrapped some import tariffs, and vowed to freeze prices if they don't stabilise on their own. Fearing that futures speculators were artificially jacking up food prices, the government also halted futures trading on rice, wheat and other essential commodities.

The increasing cost of food should be good news for India's farmers, who make up the vast majority of the nation's 1.1 billion people. Not so, says Krishan Bir Chaudhary, president of the New Delhi-based Indian Farmers Forum.

"Despite the good food crop production, the farmers do not gain in the process. There is manipulation of the market," Chaudhary told a press conference last week.

"Farmers are paid relatively lower prices than what the corporate houses quote on futures."

Still, not all Indians have been forced to tighten their belts yet. India's growing middle class - an estimated 50 million people making between £3000 and £12,000 a year - has benefited from the higher salaries and other perks of almost a decade of record economic growth.

"Our salaries have gone up and so we expect food prices to go up, too. That's normal," said Jyoti Chopra, a government architect and mother of two. "Our main concern now is the cost of petrol. Together, my husband and I commute about 100km a day, and with fuel prices going up, that is starting to hurt."

Only about 10% of her household budget goes on food. By contrast, the vast majority of Indians earn about £1 a day, with as much as 70% of that going towards food. For them, hikes in the price of wheat, lentils, rice or onions are keenly felt at the dinner table.

U Vadyathien, the head Hindu priest at the New Delhi temple where Laxmi prays, said humanity was passing through an age of "rage and frustration, known as Kalyug".

In Hindi scripture Kalyug, or Kali Yuga, refers to an apocalyptic stage of human development.

"Times are very tough, the poor just stay poor," he said, his face smeared with chalk to signify his religious devotion. "The prices are rising, but the salaries are not rising. These are dark times and the suffering is bound to get worse."