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India's inflation eases to four-month low, but Modi still faces challenges

MUMBAI--India's inflation slowed to a four-month low in June, data showed Monday, but a weak monsoon could push up food prices and pose headaches for the new government.

The Wholesale Price Index, the closest-watched cost of living monitor, rose to 5.43 percent year-on-year in June, the slowest pace since February, and down from 6.01 percent in May, the commerce ministry said in a release.

Prime Minister Narendra Modi's right-wing government came to power in May on a pledge to wrestle down stubbornly high inflation that has angered legions of voters.

The government has since ordered states to crack down on hoarders, large traders who keep food in stock while waiting for prices to rise, and set limits on the export of staples such as onions and potatoes.

But the mounting threat that a weak annual monsoon, which is vital to farmers, will slash crop production and drive up food prices could encourage the central bank to keep interest rates on hold.

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