The Centre of India Trade Unions (CITU) and other union federations, including the Indian National Trade Union Congress which is linked to Prime Minister Manmohan Singh’s Congress Party, organised the rally.
Food prices soared over 18 per cent in December, with devastating effects on the lives of millions of Indians who live below the poverty line despite rapid economic growth.
Inflation has been one of the reasons for the recent wave of protests in the Arab world, but the Indian demonstration aims to change government policy, rather than to topple the Congress-led coalition.
Unions, who have more than nine million members, also hope to revive their influence, which has been reduced by privatisation programmes championed by Singh and the previous right-wing nationalist government.
Four Indian states will hold elections this summer and the government has been shaken by revelations of corruption connected to various projects, including last October’s Commonwealth Games to the sale of telecom licences.
Singh on Tuesday conceded to opposition demands for an inquiry into the so-called “G2 scandal”.
Ministers are discussing a law to limit waste at the lavish weddings favoured by the country’s wealthy and a forthcoming budget is likely to boost subsidies for food, fuel and fertilisers and go easy on further economic liberalisation.