The services sector, badly hit by the pandemic, is seeing a rise in inflation, especially in transport-related services because of the rise in fuel prices. Easing of the pandemic restrictions and pent-up demand have helped pass-through of higher input costs to the consumers. Services with greater elasticity of demand, such as those catering to the upper income segment, recorded the sharpest rise in inflation, a Crisil analysis shows.
However, low inflation in few large essential services such as rental housing and education, which account for 14% weight in the CPI basket, is keeping overall services inflation subdued.
