Now second highest inflation rate is recorded in TN
Posted on: 25/Jan/2019 9:47:54 AM - No. of views : (3888)
This piece of news would certainly shock many now. It is revealed that the state of Tamil Nadu recorded the second highest inflation rate of 4.9 % in India. The reason has been due to factors like consistently increasing fuel and LPG prices coupled with spurt in the food grains cost during cyclone Gaja etc. The state of Kerala recorded the highest inflation rate hovering around 6%. Despite being a more industrialized stat, TN is well below other states of India in terms of employment generation.
Crisil is a popular rating agency that has been involved in the rating the states based on the data on inflation and other indices and this agency has now released the data for all the states plus Union Territories etc in India. It was pointed out that in the fiscal year 2018 the inflation was highest in Kerala, TN and Haryana and lowest in states like Odisha, UP and Gujarat. The reason for high inflation in Kerala was due to rigidity in the prices of food, beverages and urban housing. In the state of TN the cause for high inflations was due to high fuel prices.
As per N.R. Bhanumurthy belonging to National Institute of Public Finance and Policy, inflation rate of 4.9 % in TN showed that there was no agrarian crisis in TN and the farmers sold their products without any issue. He added that this rate is threshold rate that is required to boost production. He then explained about how the states like UP and Odisha face agrarian crisis and how consumption demand is also less. It must be noted that in the states like TN and Kerala the consumption demand is high as the people were able to buy commodities ad goods. Mr. Bhanumurthy finally ended saying cyclones and droughts could not be the reason for higher inflation as these could make just transient impact.
Popular economist Mr. Venkatesh Athreya expressed his thoughts and said continuous increase in the fuel and LPG prices are causes for high inflation rate. He then spoke about how TN is one state that has high tax rate on fuel and how TN has also got high LPG consumption.
