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Inflation at 8-Year High of 7.79 Percent – Who Will It Hurt the Most?

What is driving this inflation? and what corrective measures can the RBI implement to control inflation?

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The RBI’s unscheduled hike in repo rates on 5 May confirmed that the central bank was behind the curve in controlling inflation and now new data released by the National Statistical Office on 12 May shows exactly far they have been in gauging the issue.

Retail inflation in India soared to 7.79 percent in April, highest since May 2014 and almost double the RBI’s mandate of 4 percent, and above the bank's preferred range of 2 to 6 percent for the fourth straight month.

Here are a few numbers to indicate the current state of inflation: food price inflation is at a 17-month high of 8.38 percent, rural inflation is at a staggering 8-year high at 8.38 percent and urban inflation at 7.09 percent is at its highest in 18-months.

While the war in Ukraine and consequent rise in fuel prices is a significant factor in the spike, April's high inflation, according to media reports, is not one-off.


So what is driving this inflation? Who will it hurt the most, and what corrective measures can the central bank implement to control inflation?

To understand this, I speak to Pallavi Nahata, Associate Editor of Economy at BQ Prime.

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