India prices soar as do Hindu nationalist spirits

If the state election in Karnataka heralds things to come, then one of the key battlegrounds in the fight to govern India will be the issue that angers Meena Govindaraj, a mango seller.

"All the prices for household goods have shot up," said 36-year Govindaraj by dozens of mangoes piled high in a market of Bangalore, IT hub and capital of Karnataka state. "We can't even buy enough cooking oil.

Govindaraj is the political nightmare of India's ruling Congress party - someone who says she will vote for the Hindu-nationalist opposition to punish the government over inflation, now at a three-year high of over 7 percent.

The three-stage Karnataka election that began on Saturday pits Congress against the Hindu-nationalist Bharatiya Janata Party (BJP) and a smaller, regional party.

The winner of the fight between the big two will get a major boost ahead of general elections due by early 2009. And the BJP thinks it has it made.

"Price rises have become an ambush for Congress," said Arun Jaitley, BJP's main election strategist, credited with helping the party win a string of state elections this year.

"I've never seen a government at the centre with this kind of inflation issue win an election."

The Karnataka election is the first major one since inflation hit headlines this year. The vote is a test to see how rising food prices will hit Congress and if Hindu nationalists are correct in betting it could bring them back to national power.

But inflation is not the only issue in India, or in Karnataka.

Caste politics and infrastructure problems will play a big role in these state elections, highlighting how politics in a federal India of 1.1 billion people can often be more about complex local conflicts than overarching national issues.

Nevertheless, national issues do matter.

Congress came to power on the promise of "inclusive growth" and now worries it could suffer the same fate as the BJP in 2004, when a backlash from the rural poor helped throw the party out despite a booming economy.

Food prices have been key to political survival in the past. Onion prices helped push out a government in 1980.

The BJP has taken out newspaper advertisements. "Who does Congress blame for rising prices? Except itself everybody. You included," they say.

A CONGRESS VICTORY?

But Congress believes that it can win Karnataka, a former bastion, with promises of political stability after four years of chaotic coalition governments involving the BJP and the smaller regional party Janata Dal (S).

Congress also has a track record of betting on vote banks of Muslims and lower castes, many of them poor farmers, that it feels will be immune to appeals of a more urban-centred BJP.

"I think price rises are an issue, but not the decisive issue," said S.M. Krishna, former Karnataka chief minister now helping run Congress's election bid.

A CNN-IBN-Deccan Herald-CSDS poll in April showed Congress could win. But polls have proved unreliable in the past.

Some economists say this inflation will just be a blip. A similar jump in prices last year proved temporary.

But rising prices are a global concern, as international commodities prices rise on speculation, surging demand in Asia, bad weather and biofuel. India also suffers from years of poor agricultural performance which have created supply bottlenecks.

In Ramanahalli, an hour's drive from Bangalore, villagers gathered around a Hindu temple and complained about prices, among other things such as land seizures by the state government and water shortages. But no one said they would vote for the BJP. Many waited directives from village leaders.

"Kitchen life is becoming very difficult," said Aruna Venkatesh, a 28-year-old villager. "When politicians come they try and give us assurances, but they never do anything."

But the BJP does not seek to win all voters. Just enough to win power, which comes down, it says, to a swing voters.

"We are looking for 4-5 percent of voters switching preferences because of this issue," said Jaitley.