Kerala’s Finance Minister, K.N. Balagopal, recently highlighted the primary drivers behind the state’s significant retail inflation. He pointed to the escalating costs of gold, silver, and various oils and fats, noting their high consumption levels within Kerala as a key contributing factor.
During a session in the State Assembly, Mr. Balagopal explained that the rising prices of these items, categorized under ‘Food and Beverages’ and ‘Miscellaneous’ groups, disproportionately impact Kerala’s inflation index due to their substantial role in household spending. This, he clarified, is the fundamental reason for the state’s elevated inflation.
According to data from the Ministry of Statistics and Programme Implementation, Kerala’s inflation rate reached an alarming 9.04% in August, making it the highest among all major states based on the year-on-year Consumer Price Index (CPI). This figure starkly contrasts with the all-India rate, which stood at a much lower 2.07% during the same period, as reported on September 12.
A closer look at the data reveals that rural areas in Kerala experienced an even higher inflation rate of 10.05% in August, while urban inflation settled at 7.19%. Government analysis indicates that prices for ‘oil and fats’ have been consistently high. Similarly, gold and silver, which fall under the ‘Personal care and effects’ sub-group within the ‘Miscellaneous’ category, have also seen persistent price hikes in recent months.
Government Steps to Tame Price Hikes
Responding to concerns raised by Opposition United Democratic Front (UDF) MLAs regarding Kerala’s seven-month streak as the state with the highest retail inflation, Mr. Balagopal assured the assembly that the government is actively addressing the issue. He detailed various market intervention strategies implemented through the Kerala State Civil Supplies Corporation (Supplyco) and the Kerala State Co-operative Consumer’s Federation (Consumerfed) to stabilize prices. This year alone, the government has allocated an impressive ₹273.8 crore towards these crucial market interventions.