Perception is correct.

"India's central bank has flagged the risk of inflation becoming entrenched as geopolitical tensions in the Middle East continue to disrupt global supply chains and energy markets." Reserve Bank of India (RBI) Governor Sanjay Malhotra "suggested that the central bank's response would focus more on managing expectations than aggressively tightening demand." ET. Meaning, he is averse to higher interest rates. "When households are asked to assign a number to current or future inflation, their responses are shaped by recent movements in the prices of everyday items," wrote Deepa Vasudevan. "The lower and more uncertain the income, the greater the inflation anxiety, and the higher the inflation is perceived to be." "Household inflation perceptions are heavily influenced by food and fuel prices." Even with the new CPI basket which assigns lower weight to food (finshots.in), "Households continue to perceive inflation 4-6% higher than the official rate." So, how is the RBI going to change public perception? By telling people they are wrong? The government has a large number of goods and services items in the CPI basket and measures inflation year-on-year but people perceive only what they buy which gives rise to 'subjective bias'. People only remember what they have purchased recently so there is 'recency bias', a sudden sharp rise in prices gives 'shock bias' and they notice only changes in prices which is 'impact bias'. Still, if their perception changes their consumption it is important for the economy, wrote Madan Sabnavis. Last year, the Economic Survey pointed out that while companies are making record profits, wages are not growing. "Profits before taxes for over 33,000 sampled companies nearly quadrupled between 2019-20 and 2022-23. Nifty 500 companies posted profit growth of 22.3% in 2023-24 alone." But employment grew by just 1.5% and, while the GDP grew at 6.7% between 2021-22 and 2023-24, "real wages for regular workers contracted by 0.07%," wrote Ajit Ranade. Indian companies operate on the principle of gouging customers while paying niggardly wages to their workers. No Indian company will dream of doubling wages as Henry Ford did, when on 5 January 1914, "he announced that henceforth the minimum wage for Ford employees would be $5 for an eight-hour day, more than doubling the previous Ford minimum wage of $2.34 for a nine-hour day." Ford Motor's profits doubled from 1914-1916. ebsco.com. Corporate social responsibility, in which companies must spend 2% of net profits on social activity, has been made mandatory cleartax.in. "Indian firms spend about Rs 340 billion on CSR, but most of it flows into low-poverty areas, and larger firms are leaving funds unspent." indiaspend.com. No wonder, worker protests broke out in Haryana and Uttar Pradesh recently. BBC. In 2012, the General Manager Human Resources was burned to death at Maruti Suzuki's car plant in Haryana. TOI. When people are financially stressed even a slight rise in prices can seem intolerable. The RBI is not serious about inflation control, achieving its target only in 2025 (RI). Perception is correct. It's not bias.