Wait and watch

Food prices can increase policy risks

The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India is reviewing the monetary policy this week amid the anticipation that the Consumer Price Index-based inflation rate went above the upper end of its tolerance band in July. The rate was 4.8 per cent in June. The surge in consumer prices is being driven by those of food, particularly vegetables. While vegetable prices are expected to come down as the seasonal factor subsides, the uneven distribution of rain and late sowing for the season in many parts of the country could put pressure on food production. The government