In India, the report noted, higher inflation was also due to the housing rent allowances (HRA) for government employees recommended by the 7th pay commission.
Increase in HRA by the Centre from July 2017, pushed up housing inflation significantly with concomitant impact on headline inflation according to an RBI staff paper.
The rise in inflation, though, is unlikely to translate into higher wages, given subdued demand for jobs in an economy which is forecast to grow at its slowest pace in four years.