Food inflation in Andhra Pradesh was higher in the January-July period this year than in the three other southern states. Inflation stood at 8.84 per cent in the food, beverages and tobacco group of the Consumer Price Index in the first seven months of the year. Karnataka and Tamil Nadu recorded alm-ost identical inflation rates of 6.99 per cent and 6.91 per cent respectively, while Kerala registered the lowest figure of 4.09 per cent during the same period. Essential commodities such as rice, pulses and sugar have seen a spike in prices over the last few months. Traders attribute this to the poor monsoon, increase in value added tax (VAT) on food grains and hoarding by rice millers in places like Miryalguda. The increase in the minimum support price for farmers is also responsible.
Mr Rajendra Kimtee, president of the Hyderabad Dal Mills and Merchants Association, said the higher tax in AP on food grains, as also the limit on how much a trader can stock is responsible for the price rise.
“The government increa-sed the VAT on food grains, sugar and edible oils from four to five per cent last year. This alone is making a big difference. In Karna-taka, it is just two per cent while in Maharashtra, there is no tax,” he said.