The prospect of a continued tightness in cereal markets — over concerns of rain-related adversity to the rice crop and global tail winds to wheat prices — have generated upside risks to India’s inflation prospects. When it comes to food prices, there is very little inflation targeting that monetary policy can achieve. Inflation targeting works on the premise of higher interest rates deflating demand, and deflating food demand is not a palatable option at all in democracies. There is, however, good reason to believe that fiscal policy can play a positive role in controlling inflation via an intervention on the fuel prices front. Here are three charts which explain this in detail.