Page 45 - economic review

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farmers suffer more owing to high cost of farm input and transportation cost and its consequence MACRO ECONOMIC PROFILE
was that price paid by farmers increased manifold and prices received by them for their products are
found to be less than what they pay (Appendix.1.29).i.e Price of rubber has declined drastically
to Rs.110 /kg in December 2014 from Rs 180/kg during the same period of last year. But their farm
expenses hiked substantially.This badly affected the rubber growers in Kerala.The index of Price
paid by farmers has increased by 815.29 from 10478.42 in 2013 to 11293.71 in 2014 (upto July),
contrary, price received by farmers has also increased to 8188.57 in 2014 from 6008.5 during 2013,
but the increased level was lower than what they paid during the period under review. However,
during 2014, farmers’ turnaround situation took place and their loss also reduced.

Wages

1.42 The average daily wage rates of skilled workers increased considerably since 2004-05
(Appendix 1.30). In the effect of price rise of essential commodities, real value of money is reduced
and wage rate increased accordingly. On an analysis, Average Daily Wage Rate of carpenter and
mason has increased about 13percent in 2013-14 over the previous year. Likewise, an average daily
wage rate of unskilled Workers in the agricultural sector has also increased in 2013-14. The daily
wage rates of male unskilled workers in Agricultural sector showed an increase of Rs.60.59 (13.8%)
over 2012-13. Meanwhile for the female workers it was ` 38(11.7%) (Appendix 1.31).

Measures Taken to Control Inflation

1.43 At the National level, Governmemt monitors the price situation regularly as controlling inflation
is a key policy priority. In view of government policy, government imposed stock limits under the
Essential Commodities Act in respect of onion and potato,pulses,edible oil, edible oilseeds
etc. Minimum Export Price (MEP) for potato was fixed at USD450 per MT w.e.f 26-06-2014 and
at USD 300 per MT for onion w.e.f.21-08-2014 as part of price control measures of potato and
onion. Government of India has advised to State Governments to allow free movement of fruits and
vegetables by delisting them from their respective Agricultural Produce Market Committee (APMC)
Acts. State Governments were also instructed to take concerted action against hoarding & black
marketing. Other steps include a) Raising of minimum support price of rice (kharif) and wheat(rabi)
during 2014-15 crop season by about 4per cent. b) Allocation of additional 5 million tonnes of rice to
BPL and APL families in States and c) Allocation of 10 million tonnes of wheat under open market
sales for domestic market for 2014-15.

State Govt’s initiatives

1.44 Strong market intervention activities have been done by the Government of Kerala to prevent
the price hike of essential commoditites. SUPPLYCO is strongly intervening the market to supply the
essential commodities at the subsidized rate.

Section 6
State Finances

1.45 Though the national economy shows signs of macro-economic stability, recovery from economic
recession is still feeble and signs of having achieved a steady growth trajectory are yet to be
perceived. This scenario has adversely impacted the buoyancy of State revenues. The Kerala Fiscal
Responsibility Act was enacted in 2003 by the State Government with the objective of bringing in
fiscal consolidation through prudent fiscal management and greater fiscal transparency. The revenue
and fiscal deficit targets set by the State government for 2013-14 in Mid Term Fiscal Policy was at
0.54 percent and 2.82 percent of GSDP. The State Government could not achieve the targets due to

Economic Review 2014