The Economic Review is a much awaited document as it provides valuable, balanced, comprehensive and timely information about Kerala’s recent economic performance in the context of global trends, national trends and the State’s own past performance. It involves collection of data from implementing agencies at state, district and local body levels and putting the data together to be meaningful. A variety of stakeholders, including planners at the Central and State level, civil society, researchers, non-resident Keralites, media and informed citizens use this document. The book is published in the print media and is also uploaded on the State Planning Board website www.spb.kerala.gov.in. A Malayalam version is also prepared. The Planning Board has always welcomed constructive comments on making the Review more relevant and has tried to make the document more analytical yet understandable to the users.

 

This year, the Review had to be prepared within a very short span since the Annual Budget has been advanced to mid-January. Latest available data has been included and a clear picture of Government policy, plan priorities and on-going major programmes/schemes and projects have been highlighted to provide a clear picture of how Kerala’s economy has performed during the XIth Plan (2007/8-2011/2) and the first few years of the XIIth Plan (2012/13 and 2013/14). Accomplishments as well as challenges faced by Implementing Agencies in achieving their objectives is brought out sector-wise in Volume I and corresponding data is provided in Volume II.

 

Kerala is one of India’s most globalized states, with a high dependence on exports, remittances and tourism. The recession in the Euro zone, the weak pace of expansion of the United States and the slowing growth in all emerging countries has dampened Kerala’s exports and reduced tourist flows. Fluctuating global commodity prices cause uncertainty for Kerala’s exporters. Food and fuel prices have remained high resulting in cost push inflationary conditions. Saudi Arabia’s Nitaquat policy has resulted in uncertainity, regarding further opportunities for non resident Keralities working abroad, and concern over further widening of unemployment .

Kerala, being a sub-sovereign entity, is affected by developments in the rest of the country. India has been beset with low growth, fall in infrastructure investment, weak business confidence, high interest rates, wide current account deficit, high domestic inflation, rapidly depreciating currency and inability to manage the fiscal deficit within targeted limits. These factors have a deep impact on Kerala, as the state isss dependent on other states for much of its consumption requirements, including essentials like food grains, electricity and other basic goods. Inflationary conditions and supply side bottlenecks have a greater impact on Kerala due to the fact that Kerala is situated far away from major production centres and logistics are weak.

During 2013, monsoons have been bountiful, causing Kerala’s water bodies to fill up on the one hand but also resulting in damage to property in coastal and riverine areas, making the fishermen community even more vulnerable. The potential adverse implications on farmers in the Western Ghat regions due to the recommendations of the Kasturirangan report is also a matter of concern to the state. The fall in revenue collections during the current year has significantly added to the fiscal stress of the state, since expenditure on salaries, pension and interest payments cannot be cut down drastically, to compensate for low revenue.

Various efforts made by the Government in 2013-14 to improve the welfare of the people include continued emphasis on decentralized governance, special packages for vulnerable communities, minorities and people in backward regions, substantial allocation for education and health, and a focused effort at skill upgradation. All sectors, agriculture, industry, infrastructure and services have been given due priority through a variety of initiatives, as captured in this Review.

 

Implementation difficulties, primarily in large infrastructure projects, have been mainly on account of inability to acquire land, issues relating to resettlement and rehabilitation of project affected people, and capacity constraints, including skilled manpower shortage, in various Implementing Agencies. Efforts have been made to capture difficulties in implementation through real-time monitoring and taking appropriate corrective action.

 

Details regarding the action taken by various State Government Implementing Agencies to tackle the developmental challenges of the State are provided in various chapters of the Review. In addition, a theme paper on Drinking Water, the availability and quality of which is a major concern in Kerala, is included in this year’s Economic Review.

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