Retail inflation in India jumped at the fastest annual rate in the 15 months in July, to 7.44 per cent from 4.87 per cent in June, largely driven by a sharp increase in prices of essential foods commonly used in Indian kitchens, spurred by irregular monsoon. That sudden spike in inflation was likely to stay elevated for at least a few more months, the Aug. 18-28 Reuters poll of economists showed.
Prime Minister Narendra Modi s government is planning to reallocate as much as Rs 1 lakh crore in a bid to contain the inflation which has seen a sudden spike in recent months. It would be the second straight year of similar adjustments to contain costs for consumers after the government unveiled a $26-billion plan last year
Overall, the worst of inflation is likely behind us. Headline inflation could fall below 6% in Mar 23 and further down towards 5% in coming months. We also believe that 25bps hike in April by the RBI is almost certain, said Nikhil Gupta, Chief Economist, MOFSL Group