Kerala's economy is facing significant challenges due to rising fuel prices and declining remittances, leading to increased inflationary pressure, according to Chief Minister V D Satheesan.
Key Points
- Kerala is experiencing increased inflationary pressure due to rising petrol and diesel prices.
- The decline in remittances from the Gulf region is negatively impacting Kerala's economy.
- Retail inflation in Kerala is higher than the national average.
- The Kerala government plans to release a white paper on the state's finances in June.
Kerala, a consumer state, is facing increased inflationary pressure due to the recent hikes in petrol and diesel prices, Chief Minister V D Satheesan said on Tuesday.
His comments come against the backdrop of the oil marketing companies hiking the prices of petrol and diesel four times in less than two weeks amid surging crude oil prices due to the West Asia conflict.
Impact of Gulf Remittances on Kerala's Economy
At a briefing in the national capital, Satheesan, who rode to power with a thumping victory for the Congress-led UDF in the recent polls, said the decline in remittances from the Gulf due to the crisis and higher oil prices are impacting Kerala's economy.
"The central government has increased oil prices four times. Since Kerala is a consumer state, the price hikes will affect Kerala very badly," he said.
According to him, remittances from the Gulf is the backbone of Kerala's economy, and since the war started, it has affected the state.
Kerala's Unique Economic Challenges
With the remittances issue and oil prices, Kerala is impacted more than any other state, the chief minister said and added that the Centre has been informed about this peculiar situation faced by the state.
Satheesan was sworn in as the chief minister on May 18 after the Congress-led UDF won in the Assembly elections, wherein the now ruling front had won 102 seats. The results of the polls, held on April 9, were declared on May 4.
Inflation Rates in Kerala
Retail inflation is higher in Kerala compared to the national average.
Latest official data showed that retail inflation in the state stood at 3.77 per cent in April, while at the national level it was at 3.48 per cent during the same month.
On Monday, petrol prices were raised by Rs 2.61 a litre and diesel by Rs 2.71 a litre. The latest increase took cumulative hikes since May 15 to nearly Rs 7.5 per litre.
Meanwhile, earlier in the day, Satheesan met Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman.
Government to Release White Paper on Finances
At the briefing, which was also the first by him in the national capital after taking over as the chief minister, Satheesan said the government would come out with a white paper about the state's finances in the first week of June.
