India's retail inflation as measured by the Consumer Price Index (CPI) surged to 7.79 percent in the month of April, according to government data released on Thursday.
Inflation based on CPI was 6.95 percent in March this year and 4.23 percent in April 2021.
Inflation in the food basket rose to 8.38 percent in April from 7.68 percent in the preceding month and 1.96 percent in the year-ago month. The Reserve Bank of India (RBI) has been mandated by the government to ensure that inflation remains at 4 percent with a margin of 2 percent on either side.
The retail inflation has remained above 6 percent since January 2022. After the off-cycle Monetary Policy Committee (MPC) meeting of RBI last week, RBI Governor Shaktikanta Das had said the adverse effects of the unprecedented high global food prices due to the ongoing geopolitical situation are reflected in the domestic market as well, and going forward inflationary pressures are likely to continue.
Meanwhile, sources said the central bank is likely to raise inflation projections in the MPC meeting next month and would also consider a rate hike to tame inflation which is above its comfort level. Earlier this month, the MPC raised the key policy rate (repo) by 40 basis points with an aim to tame the rising inflation. It was the first-rate hike after August 2018.
The RBI mainly factors in the retail inflation based on Consumer Price Index while arriving at its monetary policy.