This year’s Economic Review attempts to capture economic progress in the State in a more analytical, yet user friendly format. The Review relies on innumerable sources of government information and serves as a credible and comprehensive account of the economic progress of the State. Volume 1 of the Review provides a thematic look at various economic sectors and brings out challenges as well as the accomplishments of various government institutions engaged in the provision of public goods and services. This is complemented by Volume 2, which provides time series and cross sectional data on state and national level economic parameters.
Kerala is one of the most globalized States in India and hence the faltering growth of several trade partners does have a major impact on Kerala’s own growth prospects. Kerala is also dependent to a great extent on other States of India for key essentials such as food, fertilizers, most manufactured goods and basic industrial pre-requisites such as coal, cement, steel, crude oil, natural gas and electricity. High food inflation and hike in fuel prices tend to aggravate Kerala’s developmental problems. Under the circumstances, Kerala’s performance in 2011-12 and 2012-13 has to be viewed against the global and national growth scenario. Kerala’s growth in GSDP as well as per capita income growth, even without factoring in non-resident remittances, was significantly higher than the national average in 2011-12.
Kerala’s achievements in attaining high human development indicators has put the State way ahead of other Indian States and on par with developed economies in critical areas such as literacy, health care, gender consciousness, labour rights and participative governance. These strengths can be leveraged further by understanding the changing aspirations of the people in the light of global dynamics. Second generation reforms have been introduced to focus not just on literacy but on technical and marketable skills, not just on basic health but on universalization of world class health care, with emphasis on life style diseases, geriatric care and the like. Kerala has a very high self imposed code of decent work and dignity of labour and work ethics are of a high order. Unfortunately, not enough publicity is given to the high skill and clean working practices of Kerala’s workforce. The perception that Kerala labour is militant continues to linger even though industry situated in Kerala is fully conscious of the fact that there has been a tectonic change in attitudes over the years. Kerala is considered a model state for Governance, in general, and Local Self Government, in particular.
Against the backdrop of these achievements, what is required now is momentum in employment generating and environment friendly growth. Despite banks being flush with funds, there do not appear to be adequate investment avenues to tap. Both land and labour are severely constrained. Farm viability is low and there are major transport and energy infrastructural constraints. The rapid pace of urbanization in Kerala has brought with it major challenges including provision of adequate and affordable houses, public transport services, solid waste management and supply of uninterrupted power. Migration, both outward and inward, have separate and well defined challenges, which could adversely affect the State’s progress, if not appropriately tackled. Various social problems such as alcoholism, violence, increase in women-headed households, deterioration in mental health, life-style diseases and so on are emerging as threats to progress.
Several new initiatives taken by the Central Government in the 12th Plan would be of advantage to Kerala. The greater flexibility given to Centrally Sponsored Schemes will give us an opportunity to design schemes to better suit our own needs. Various new infrastructure projects are in the pipeline – Kochi Metro, Thiruvananthapuram and Kozhikode Monorail projects, Vizhinjam Port, Kochi-Palakkad National Investment Manufacturing Zone, Palakkad Rail Coach Factory, High Speed Rail Corridor, to name a few. Close monitoring of these projects to ensure timely take-off will ease the pressure on our strained physical infrastructure. Every effort should be made to tap non-budgetary sources of investment so that budgetary funds are more effectively used. Better targeting of subsidies and pruning of unproductive expenditure will provide fiscal space for channelling borrowed funds into productive capital assets. The quick introduction of destination based GST is also likely to help a net importing state like Kerala.
The Review brings out various measures taken by Government to combat these threats and provides the reader with an objective account of the state of the economy. The web version of this Review is available on www.spb.kerala.gov.in. We welcome your suggestions for further improvement of the Review.
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