New Delhi, Feb 7: The monetary policy report released by the Reserve Bank of India (RBI) on Wednesday warns of an upward trend risk in the inflation linked to the consumer price index. One of the factors for the CPI inflation surge, in the last quarter of FY2017-18 and the first half (Apr-Oct) of FY2018-19, is the implementation of the HRA or House Rental Allowance as per the 7th Pay Commission recommendations.

RBI Governor Urjit Patel, while presently the 6th bi-monthly policy review, said the central bank sees an upward trend in the rate of inflation in the near future, primarily due to the spiralling crude oil prices, which is hovering around $70 per barrel.

In the first half of 2018-19, the RBI Governor said 7th Pay Commission recommendations and a possible “good monsoon” – which would raise the disposable income in the rural economy – could play a significant role in increasing the CPI inflation.

The RBI monetary policy reports released in the second and third quarter of FY17-18 had also warned about the impact of HRA hike for central government employees on inflation.

Reacting to the claims made by the earlier RBI reports, the All India railwaymen Federation chief Shiv Gopal Mishra, who has been leading the 7th Pay Commission negotiations with Centre, had said, “The assessment of RBI in this regard is flawed. There will be no major impact as Centre is not providing us the arrears on HRA. Whatever has been given to us has also been rolled-out in a staggering manner.”

(The above story first appeared on LatestLY on Feb 07, 2018 06:23 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).