The progress of the 2009 monsoon seems to be 29% below normal. This may be adversely affecting food prices. In the latest available data, inflation based on CPI-IW has surged back to values near 10%. (This is the three-month moving average of the rate of change of seasonally adjusted CPI-IW).
Ila Patnaik has an article in Indian Express analysing the implications of this situation for monetary policy.
India really needs an `inflation report' institution.