New Delhi, February 23:

India’s leader sought help from state governments in curbing inflation, which has climbed to a two-year high, stoking fears that the country’s economy might be overheating.

Prime Minister Manmohan Singh dashed off a letter yesterday to the elected heads of Indian states asking them to keep a close watch on prices of essential goods and curb possible speculation and hoarding. “The state governments have a major role in checking prices of essential commodities by curbing malpractices, profiteering and hoarding,” Singh wrote in the letter to the chief ministers of 25 states.

Singh’s letter is the latest in a series of recent measures taken by the federal government and the country’s central bank to rein in prices. Inflation rose to 6.73 per cent in the week that ended on February 3 from the prior week’s 6.58 per cent, led by a spurt in the prices of food products and some manufactured goods, according to official data.

Some economists believe the rising inflation is a result of too much demand caused by robust economic growth and rising incomes. The Indian economy has averaged about 8.5 per cent growth in the past three years and is expected to grow by 9.2 per cent this year.

The spike in inflation also comes at a time when political parties are preparing for elections in the country’s most populous state, Uttar Pradesh. Rising prices, if not checked, could top the opposition’s campaign.

Last week, the government ordered state-run oil companies, which dominate the retail market for fuel, to cut petrol and diesel prices. It has also taken measures to increase imports of several food products and cut import duties on some manufactured goods. The central bank has also taken several steps to tighten money supply and counter inflation by slowing borrowing and spending.

All these measures have yet to show results, though. Prices of lentils, edible oil, wheat and milk have increased the most among essential goods, hurting the poor. An increase in prices of some manufactured commodities has also fueled inflation.