High price of gold, oil reason for Kerala’s high retail inflation rate, says Finance Minister K.N. Balagopal

Finance Minister K.N. Balagopal on Wednesday attributed the high retail inflation in Kerala to the rise in the prices of gold, silver, and oil and fats whose consumption is high in the State.

The increase in the prices of these commodities which come under the ‘Food and Beverages’ and ‘Miscellaneous’ groups, and their importance in determining the index were the reasons for the high inflation in the State, Mr. Balagopal said in a written reply to questions in the State Assembly.

The inflation rate in Kerala stood at 9.04%, the highest among major States, according to the year-on-year inflation rate based on the all-India Consumer Price Index (CPI) for the month of August published by the Ministry of Statistics and Programme Implementation. The all-India rate was at 2.07%, the Ministry had said on September 12 .

Kerala’s rural inflation rate for August stood at 10.05% and the urban rate, at 7.19%. The prices of commodities in the ‘oil and fats’ sub group have been high for some time now. Gold and silver are included in the ‘Personal care and effects’ sub group in the ‘Miscellaneous’ section. These items also have remained pricey in recent months, the government observed.

Market intervention

On Wednesday, MLAs of the Opposition United Democratic Front (UDF) wanted to know whether the State government has assessed the scenario where Kerala has topped the nationwide list for retail inflation for the seventh month running.

Mr. Balagopal said that government has adopted measures for tackling price rise to check inflation through its public distribution system Kerala State Civil Supplies Corporation (Supplyco) and the Kerala State Co-operative Consumer’s Federation (Consumerfed). The government has spent ₹273.8 crore this year on market intervention, he said.