Villages in India face a sharp spike in food prices in 2016, as a second year of drought drives up the cost of ingredients such as sugar and milk, and poor transport infrastructure stops falling global prices from reaching rural areas.
India's first back-to-back drought in three decades also complicates government spending calculations as Prime Minister Narendra Modi tries to prune a subsidy regime that has long propped up the rural economy, and he can ill afford to alienate rural voters after a bruising weekend electoral defeat in Bihar.
It is bad news for the central bank, too, which faces a conundrum achieving its 4% inflation target for the medium term as levels diverge in town and country, and infrastructure development would take years to fix it.
Overall retail inflation in the country eased to 4.41% in September, helped by falling commodity prices, but rural inflation was at 5.05%, mostly due to food prices. That, some analysts argue, could worsen, despite the dampening effect of lower wages and sluggish growth in the agricultural sector.
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