India prices soar, as do Bharatiya Janata Party spirits

By Alistair Scrutton

BANGALORE (Reuters) - 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. "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.