With headline inflation accelerating to an eight-year high of 7.79 per cent in April, ratings agency Crisil said price rise is getting broad-based, and the Reserve Bank is likely to respond with rate hikes of up to 1 percentage point in FY23.

The research wing of the entity said it now expects the average consumer price inflation for FY23 to come at 6.3 per cent -- above the RBI's tolerance of 6 per cent -- as against 5.5 per cent recorded in FY22.

The RBI hiked its key rate by 0.40 per cent in a surprise move last week while keeping an accommodative stance. Analysts said the move had to be undertaken fearing a sharp spike in the April data.

"Inflation is set to become broad-based this fiscal, rising across food, fuel and core inflation....we expect the RBI to raise repo rates by another 0.75 per cent to 1 per cent in the rest of this fiscal," Crisil said.

Its analysts made it clear that the rate hikes will be ineffective in bringing down food or fuel inflation, but can help check a generalisation in inflation by curbing the second-round effects.

The government "will need to pull its weight to control price rise", they said, admitting that it is a tradeoff where reducing taxes and subsidies will lead to added fiscal pressure.

The agency's peer India Ratings expects the RBI to hike the repo rate by up to 0.75 per cent in FY23 and also another 0.50 per cent hike in the cash reserve ratio.

The agency expects lower quantum of rate hikes despite expecting inflation print for FY23 to come in at a higher 7 per cent, and added that a peak will be achieved in September 2022.

Stating that the off-policy hike was justified, Icra Ratings' chief economist Aditi Nayar said, "We now foresee a high likelihood that the MPC will raise the repo rate by 0.40 per cent and 0.35 per cent, respectively, over the next two policies to 5.15 per cent, followed by a pause to assess the impact of growth. As of now, we continue to see the terminal rate at 5.5 per cent by the middle of 2023."

Kotak Mahindra Bank's senior economist Upasna Bhardwaj said the release of the data will "intensify the pressure" on the MPC (Monetary Policy Committee) to aggressively frontload policy rate hikes, especially with no near term respite seen on the supply side amid geopolitical tensions.

"We expect another 0.90-1.10 per cent of repo rate hike in 2022, with 0.35-0.40 per cent in the June policy. We also expect additional CRR hike of 0.50 per cent in order to quickly streamline the monetary policy and liquidity stance," she added.

The jump in inflation is dangerous and a scary start for the new fiscal year, Acuite Ratings and Research said in a note, adding that it also expects rate hikes of 1 per cent in the remainder of the fiscal.