As all-India retail inflation spiked to a eight-year high of 7.8% in April, the divergence between the inflation rates of states has become starker. While inflation in states like West Bengal, Madhya Pradesh and Telangana galloped to over 9%, Kerala reported the lowest number amongst all states at 5.08%. One reason for the wide variance in inflation among states is high rural inflation; states that are more urbanised will report lower inflation. Lower inflation in states like Kerala also indicates the relative efficiency of the robust public distribution system to keep prices of essential items in check.
Why FDI inflows to India are declining1