India’s progress towards an almost fabled 10 per cent growth rate suffered a setback this year. Rising domestic inflation coupled with global financial woes have dashed the prospect of double-digit growth.

Higher interest rates aimed at containing inflation have put the brake on India’s strong growth rate. Earlier this year, inflation was 5 per cent but, propelled by oil and food prices and government spending, it moved stubbornly above 12 per cent last month.