Government's inflation shield weakening as pressures mount. India's wholesale price index more than doubled to 8.3% in April, the highest in three-and-a-half years, driven by crude petroleum prices surging 67.2% and fuel inflation jumping to 24.7%. While retail inflation remains relatively contained due to government fuel price caps and food's dominance in consumer baskets, analysts warn this buffer is unsustainable. As the Centre faces mounting pressure to allow fuel prices to rise, consumer inflation will likely accelerate sharply. Higher input costs are already pushing factory-gate prices upward across manufactured products. The Reserve Bank's inflation-targeting framework will face renewed scrutiny as these wholesale pressures eventually transmit to retail prices, forcing potential monetary policy adjustments.
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