Is a further hike in interest rates by the RBI required to keep inflation in check?

The majority concurs that the Reserve Bank of India should increase rates.

The central bank raised interest rates six times in 2010 to help tame inflation. But analysts are divided over whether further rate increases will help in combating inflation. The problem now is not demand-pull inflation. Food prices, which are stoking inflationary expectations in the economy, are being driven by supply bottlenecks.

An increase in key rates will do little to check food inflation. Further rate increases will only take a toll on India's growth story just when the economy is recovering from the slowdown. The growing interest rate differential between India and the US will also attract a torrent of capital, putting pressure on the rupee and hurting the interests of exporters.