Page 43 - economic review

15MACRO ECONOMIC PROFILE

• According to this report as far as Kerala is concerned 11.3% of the population (38.3 lakh
person) is Below Poverty Line in 2011-12. 26 lakh urban people (15.3% of urban popula-
tion) and 12.3 lakh rural people (7.3% of rural population) are Below Poverty Line.

• The poverty ratio has declined from 39.6% in 2009-10 to 30.9% in 2011-12 in rural India and
from 35.1% to 26.4% in urban India. The decline was thus a uniform 8.7 percentage points
over the two years. The all-India poverty ratio fell from 38.2% to 29.5%. Totally, 91.6 million
individuals were lifted out of poverty during this period. State wise comparison is given in
Appendix 1.24.

• In Kerala, the rural poverty ratio has declined from 9.7% in 2009-10 to 7.3% in 2011-12
and from 23.7% to 15.3% in urban areas. The total poverty ratio has declined from 16.0%
to 11.3% during the same period.

1.35 Various schemes on Poverty Reduction have been dealt with in other chapters of the Review.
While Kerala is better off than most other states in terms of average poverty estimates, there are
still several pockets of deprivation in the state, for example among tribal population and fishermen
communities. Greater central assistance and appropriate livelihood programmes in these pockets
are required to ensure that poverty is reduced throughout the state. Unemployment, lack of access
to drinking water, landlessness, marginalisation, disabilities – all these are correlated with poverty in
the Kerala context.

Section 5
Prices

1.36 In the Indian context, upward fluctuation of prices of essential commodities is a common
phenomenon, which in turn adversely affects common people and their purchasing power. Factors
influencing inflation are the prices of primary food articles and manufactured food products, fuel &
power. Among manufactured products, chemicals & chemical products, basic metals, alloys and
metal products are included. Rapid increase in cost of farm input is reflected in rising cost of the food
prices. Food articles& manufactured food products together account for a significant portion of overall
inflation. The Wholesale Price Index (WPI) of primary articles, fuel and power and manufactured
products was at 4.1, 4.4 and 3.6 percentages respectively in the first half of 2014-15, and the overall
inflation of all commodities declined to 3.9 percent in the first half of 2014-15 from 6.6 percent in
the same period of 2013-14. On the other hand, price of the Petroleum products declined in the
domestic market in recent months. This is because Crude oil price plunged by 63 percent from $86.1/
bbl in October 2014 to $52.78/bb1 in February 2015. The sell-off reflects expectations of a continued
market surplus owing to weak demand, large supply growth, higher stocks and little indication from
OPEC that it will cut production to stem the price slide.

1.37 Kerala being a consumer state, major chunk of vegetables, rice, meat and other food articles
are imported from neighboring states. The important reason for high food prices is exorbitant cost of
production of food commodities and high logistics cost. This was due to rapid increase in farm input
prices, low productivity, fragmented land holdings and declining investment in agriculture sector.

Price Index

1.38 Consumer Price Index (CPI) of Agricultural and Industrial Workers in Kerala increased to 261
during 2014 from 242 of the previous year. Consumer Price Inflation was less in 2014 compared to
2013. Food inflation was the main reason for increase of price index in Kerala. State wide inflation
based on CPI was 19 basis points between 2013 and 2014. Percentage variation of Consumer

Economic Review 2014