In 2016-17, the economy of the State of Kerala was adversely affected by a combination of natural and policy created factors. These varied from a medium-term deceleration in growth to a decline in primary commodity prices. Further, the departure from normal rainfall for the period June 1, 2016 to September 30, 2016 (that is, coinciding with the period of the South West monsoon) was -34 per cent, and the departure from normal rainfall for the period October 1, 2016 to December 27, 2016 (that is, coinciding with the period of the North East monsoon) was -61 per cent. It is now clear that this cumulative shortfall in rain has caused drought conditions in Kerala that will continue at least until the next South West monsoon. On top of these came the the ill-designed and unwarranted decision to cancel the legal-tender character of bank notes of Rs 500 and Rs 1000 denominations, which devastated the state’s informal sectors and its cooperative credit infrastructure, with economy-wide consequences.
At the same time, 2016-17 was also a year in which a new Government led by the Left Democratic Front assumed office on the basis of an ambitious programme to revive growth and expand social welfare programmes in the State. The Government of Kerala has taken the bold and independent step of announcing that, although the Government of India has abandoned five-year plans, the State will continue with five year planning and with the formulation and implementation of the Thirteenth Five-Year Plan.
Soon after assuming office, the Government of Kerala announced the inauguration of four Missions to help build a new Kerala. The Missions emphasise sustainable development and peoples’ participation in the following fields: high-quality school education, people-friendly health facilities, a green Kerala (a Mission that includes, in turn, efforts in the spheres of nature-friendly agriculture, waste management, a clean environment, and a litter-free Kerala, and clean water bodies and enhanced water resources), and secure housing and livelihoods. The Government has also inaugurated the second phase of the People’s Plan Campaign in Kerala to consolidate and expand India’s foremost programme of democratic decentralisation.
Every year, the State’s Economic Review has a theme chapter. This year the theme chapter is on tourism in Kerala. Income from tourism constitutes about 10 per cent of the gross State Domestic Product of the State, and is an important engine of growth. Tourism creates employment, brings in incomes, and opens out cultures to the rest of the country and world. A feature of tourism is its interconnection with other spheres of development. Tourism cannot be successful without concurrent development in health, sanitation, urban and rural planning, transport, connectivity, local self-government and other spheres.
After the boom period of the 1990s and early 2000s, the rate of growth in tourism arrivals declined in Kerala. Demonetisation, too, dealt a blow to tourism in the 2016-17 season. The Committee to Study the Impact of Demonetisation on the State Economy of Kerala appointed by the Kerala State Planning Board noted in its Interim Report that as “news of the serpentine queues at money exchange counters in airports and outside and the limits on the amount of Indian currency that can be obtained in exchange for foreign currency spread, cancellations rose and tourist arrivals fell. The cash shortage affected domestic tourist arrivals as well. As per quick estimates from the Department of Tourism, Kerala, relative to the corresponding month of the previous year, domestic tourist arrivals fell by 17.7 per cent in November 2016 and foreign tourist arrivals by 8.7 per cent. The corresponding figures for October 2016 were a positive 5.2 per cent and 6 per cent respectively.”
Nevertheless, tourism in the State has continued and promising potential. There is potential in the traditional locations in Kochi, south of Kochi and in the highlands. There is the steady and unabated growth of pilgrimage arrivals, and there is the vast and relatively unexploited tourist potential of the northern parts of the State.
Tourism development requires technical expertise and all-round planning. It must cater to all sections of tourists. It must be responsible tourism, and sensitive to carrying capacity and the needs of the State’s environment and people. This is a task in which we certainly can succeed.
The Economic Review includes, as it does every year, the most recent data on government policies, Plan priorities, and on-going programmes of Government departments. It provides a snapshot of economy’s performance over the 12th Five-Year Plan period. The Review is in two volumes. Volume I covers the policies, programmes and achievements of Government departments over the preceding year and Volume II provides the corresponding datasets. Economic Review 2016 is published in English and Malayalam. An e-version is uploaded at the State Planning Board website: www.spb.kerala.gov.in.
February 19, 2017