I still favour a blocking read over blocking using select, though - you're using two system calls (which are relatively expensive) to do the job of one (unless there's something I'm missing).

Paraphrasing the Cookbook a little, replacing your loop with

for( ;; ) {
  open FIFO; "<", $fifofile or die $!;
  
  my $buf = <FIFO>; # blocks
  next unless defined $buf;

  chomp $buf;
  print $buf;
 
  close FIFO;
}
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Just as a final point, I'm not 100% sure what you're trying to achieve with your calls to index and substr - all you seem to be doing there is stripping the newline, which you can achieve using chomp.

Hope that helps.