SBI Report: Labour Migration and Inflation in Southern States
Why in the news
An SBI report argued that workers moving from low-income to high-income southern states are adding to price pressure there.
Key facts
- The south has pricier vegetables, cereals and most pulses; north-east and west inflation is lowest, south and east highest.
- Post-pandemic (FY21-FY25) decline in inflation: north-east 3.4%, south only 2.6%.
- Southern states levy higher taxes on petrol/diesel, liquor and vehicle or flat registration, and supply 30% of state sales tax collection, the highest of any region.
February snapshot
| Measure | Reading |
|---|---|
| Kerala | 7.3% (highest) |
| Chhattisgarh | 4.9% |
| All-India CPI | 3.6%, 7-month low |
| Rural / urban above national average | 9 major states / 8 states |
Outlook
- CPI: Q4 FY25 at 3.9%; FY25 average 4.7%; FY26 at 4.0%-4.2% with core at 4.2%-4.4%.
- Policy: cumulative cut of at least 75 bps expected.
Exam angle
- All-India CPI moderated to 3.6%.