Southern states stand to gain the most from the recent GST rate cuts, with Kerala, Tamil Nadu, Andhra Pradesh, Telangana and Karnataka likely to see the sharpest decline in consumer inflation if producers pass on the complete benefits to households.

State-level analysis indicates that Kerala’s CPI could slow by as much as 1.37 percentage points in both rural and urban areas. Tamil Nadu, Andhra Pradesh, Telangana and Karnataka are also expected to see reductions of over 1 percentage point. By contrast, Uttar Pradesh, the country’s most populous state, is likely to witness only a 0.86 percentage point decline in rural inflation and a 0.82 point drop in urban areas, reflecting the higher weight of food in its consumption basket, where GST cuts have limited impact.

In August, Kerala’s rural

See Full Page