(FORTUNE Magazine) – ONION PRICES are a sensitive political issue in India. The root is essential in the diet of Indians, rich and poor, and price rises can rock governments--the regional administration in New Delhi was voted out of office in 1998 after steep increases. So when onion prices doubled over a six-week period this year, to 55 cents a kilogram, the current coalition government, led by the Congress Party, was alarmed. The price moderated slightly in March, but consumer prices overall have been rising by 10% to 12% a year, led by wheat, edible oils, and spices, as well as onions. And the more closely monitored wholesale price index rose at an annualized rate of 6.7% in February, well above the 5.5% limit preferred by economists at the Reserve Bank of India. A shortage of onions, like the ones above in Siliguri, helped drive up the price and make Congress politicians feel vulnerable. The party has done badly in two recent elections and faces more difficult votes soon. The government would like to stem inflation without slowing the country's 9% growth rate. Its budget, announced Feb. 28, proposed cutting customs and excise duties. Restrictions have also been introduced on wheat and other commodity exports to increase supply. But Rajiv Kumar, director of ICRIER, an economic think tank, warns that monetary policies designed to reduce demand, such as raising interest rates, "are likely to dampen growth."