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India economy: Rising consumer prices pose policy dilemma

14 August 2012 Last updated at 04:14 BST

Inflation is causing headaches at India's central bank.

The country's economic growth has slowed to the point that business are calling on the Bank to cut interest rates.

But that may cause consumer prices to rise, at a time when the Bank is trying to keep them in check.

There are worries that a weakening rupee and the lighter monsoon rains could drive food prices higher.

That's why the latest inflation figures, due later on Tuesday, will be so closely watched.

The BBC's Sameer Hashmi reports from Mumbai.