Introduction

 

To ensure sustainable development and inclusive growth in the State, the Government of Kerala directed the State Planning Board to prepare ‘Kerala Perspective Plan 2030’ (KPP 2030). Technical support came from the National Council of Applied Economic Research (NCAER), New Delhi. The document was launched on 13th July 2015. Perspective plan for Kerala is based on a thorough analysis of the existing and potential strengths and weaknesses of the Kerala State. It establishes long term goals for the economy in terms of major macroeconomic and social indicators within an overall framework of socio-economic and environmental development in the context of the State. It puts together a vision of development, sectoral strategies, and projections relating to quantitative dimensions of medium and long term development plans.

 

Kerala Perspective Plan 2030 is a strategic articulation of its development vision, mission, goals, and objectives, and a high level strategy to achieve them. It also specifies an action plan around the framework of resources, competencies, and capacities. The KPP 2030 identifies critical challenges; provides a strategic framework for sustainable and inclusive growth drawing on international experiences; sets developed country benchmarks for Kerala to achieve; examines the best regional and international practices and provides the rationale for development planning and resource requirement. Creation of a knowledge-based economy is central to this Perspective Plan. The plan will be integrated into the overall development strategy of the State articulated in Budgets and Plans.

 

Perspective Plan

 

Planning means looking ahead and chalking out future course of actions to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific activity. Perspective Plan is a plan for a fairly long period, say 20 to 30 years, less detailed and less concrete than annual plans. The purpose of a perspective plan is to set a ‘perspective’ for the short term plans. The short term plans, so worked out, would be such as to lead to certain long term results. It is neither a fully worked out plan nor just a theoretical exercise, but perspective plan is a framework within which concrete short term plans can be fitted. Thus perspective planning is a blue print regarding the objectives and targets of long run growth.

 

9.2 The five year plan is further divided into annual plans. Whether there are perspective plans or annual plans, they are divided into sectoral as well as regional plans. Regional plans are concerned with regions, districts and localities. While sectoral plans are made for the development of the sectors like agriculture, industry, transportation, health, education etc., they are further divided into sub plans like plans to boost the agricultural output; plans to increase the coir and cashew production; plans to enhance exports etc. All these plans and sub plans are constituents of the Perspective Plan.

 

9.3 The following are some of the steps required for a perspective plan.

i. Analyze the existing scenario

ii. Conduct stakeholder assessment

iii. Clarify values important to the organization

iv. Set goals and objectives

v. Identify strategies – set time lines and tasks

vi. Estimate and allocate resources

vii. Develop and communicate a marketing or business plan

viii. Establish a system for the implementation and monitoring of policies, procedures, and rules

ix. Establish a system for exchanging information and building consensus

x. Provide a mechanism for evaluation

 

Need for Perspective Plan

 

9.4 Over the five and a half decades since its formation in 1956, Kerala has recorded impressive achievements in development, significantly improving the material conditions and quality of life of its people. Its achievements in terms of human development indicators such as education, health, and demographic indicators have been globally acknowledged. Its social development in terms of social equality, social network ties, social cohesiveness and political vibrancy which present enormous opportunities for the policy makers, has also not gone unnoticed. In contrast to the experience of high income countries, these achievements were made at low levels of economic development and per capita income and had not been accompanied by corresponding economic growth for almost 30 years since its formation. This development experience of Kerala was portrayed as a paradox of ‘human development despite economic stagnation of its economy’. Since the late 1980s there has been a turn-around in Kerala’s fortunes and the current experience is described as one of ‘high economic growth with low productivity and high unemployment’. This paradox is intrinsically linked with the poor quality of growth in the State. The economic history of Kerala is characterised by three distinct phases of economic growth. These are:

• Economic stagnation phase : 1970−71 to 1986−87 (Average growth rate is 1.1%);

• Moderate growth phase:1987−88 to 2001−02 (Average growth rate is 5.1%); and

• Accelerated growth phase: 2002−03 to 2009−10(Average growth rate is 7.5%);

 

9.5 Currently, Kerala is not only ranked very high among Indian states in terms of human development and poverty reduction, it has also been achieving acceptable levels of economic growth. It is well positioned among Indian states in terms of per capita income. Its Gross State Domestic Product (GSDP) has also been growing at a rate that is above the all-India average till 2014, with 2004-05 as base year for calculation.

 

9.6 Nevertheless, economic growth in Kerala cannot be taken for granted. Examining the data from the 1970s shows that Kerala’s growth is mainly driven by construction; transport, storage & communication; trade, hotels and restaurants; real estate ownership, business, and legal and other communication services. These services have low tradability and are mainly driven by domestic demand. The four factors that drive domestic demand are: remittances, tourism, government welfare expenditures and the welfare role of social organisations. Consumption is not accompanied with commensurate increase in investment and productive capacities. Kerala is caught in a low productivity trap of GSDP and employment. The average rate of unemployment in Kerala is three to five times higher than that of the rest of India. It is characterised by unemployment amongst the educated and casualisation of employment.

 

9.7 Further, Kerala is characterised by relatively high personal and regional inequality as compared to the rest of India. The State is confronted with aging population; rapid urbanisation without commensurate increase in urban infrastructure; and increasing pressures on natural resources, especially land and water. Nutritional deprivation is serious. Social challenges in the form of high incidence of crime against women and rising rates of alcoholism remain.

 

9.8 The narrow base of growth drivers is the main reason for this situation. Growth in Kerala was driven by industry along with transport, storage, trade and hotels during 1971-86. During 1987-2001, real estate and business services became important. The period beyond 2001 saw construction, transport, storage and communication, trade, hotel and restaurants, real estate ownership, business and legal services, and other services boosting growth. Remittances, tourism and welfare expenditures were the drivers of growth. Will these factors be able to sustain the growth witnessed during the last decade and a half?

 

9.9 Despite the development of human capital that has taken place over the past several years, the State is yet to become known for knowledge-intensive service-oriented products and services. While the national economy is driven by skill-intensive, tradable and high value-added services like software, communications and financial services, Kerala is not. Any fall in remittances, tourism and welfare spending will take growth to lower levels. The magnitude of the fall in growth can be large. Three different growth scenarios may be visualized: (i) Growth in banking and communication sectors slow down; (ii) Growth in banking, communication and construction sectors slow down and (iii) Growth in remittances slows down. The results would be: Scenario1- overall growth rate in Kerala would fall to 5.1 per cent in 2012−16, and later this growth rate could reach a new low of 4.6 per cent in 2027−31. Scenario 2- a range of growth rate from 3 to 4 per cent; Scenario 3- growth rate of 3.3 per cent. These are extremely low growth rates under which sustaining the welfare gains of the ageing population would be almost impossible. Kerala has to prepare itself to face this challenge. In face of a grim and uncertain business scenario and multifarious challenges, there is need to improve the quality of growth in terms of productive capacity, structural transformation and the quality of human development. This requires course of correction. Strategic planning is an essential first step to place the State on a high growth trajectory.

 

 

 

Strategic Planning

 

Vision

 

9.10 The vision outlined in KPP 2030 for the State is a prosperous, dynamic, knowledge-driven, competitive and eco-efficient economy in the distinguished league of the world’s advanced economies with a spirit of entrepreneurship, innovation, tolerance and diversity.

 

9.11 It is envisaged that Kerala will be a globally-oriented knowledge hub, in the distinguished league of the world’s leading knowledge hubs. A key node in global knowledge networks, it will have distinctive expertise in the education sector, health care, bio- technology, ICT, bio diversity and environment related areas.

 

Mission

 

9.12 The mission of KPP 2030 is to achieve “Sustainable Economic Prosperity”. Sustainable Prosperity means prosperity for the present without compromising prosperity of future generations. Four dimensions of this prosperity are: economic, human, social and environmental.

 

• Economic prosperity: With the aim of achieving high income status equivalent to Nordic countries by 2040, Kerala will achieve the standards of a high middle income country by 2030.

• Human prosperity: Quality of life will be shaped by access to, and quality and affordability of services namely, health, education, and effective and clean governance.

• Social prosperity: Equal opportunity for every person residing in Kerala irrespective of gender, caste and origin for intellectual, personal and professional growth.

• Green prosperity: Preserve the natural wealth and biodiversity of Kerala for future generations.

 

Mission statement

9.13 Quantity is not enough—quality matters.

 

Goals

˜ Economic prosperity:

• Achieve annual per capita income of USD 36,000 from the current (approximately) USD 4,700 (2005 PPP) by 2040

• Achieve a compound rate of 7.5% during the next 20 years to reach the level of USD 19,000 equivalent to a middle high income country by 2030.

• With sectoral growth rates of

• 2% minimum growth in agriculture

• 9% in manufacturing

• 9% in construction

• 7.5% in communication

• 10% in education and health sectors

• Brand Kerala as a ‘global education and health hub’ driving India’s exports in education and health care services along the lines of Bangalore in IT exports.

 

˜ High quality of life

• Increase the share of education and health sectors in GDP to 10% of GDP from the current 5−6%;

• Increase in enrolment ratio in higher education to 48%;

• Health security for all;

• Upgrade to highest category of UNDP human development index.

 

˜ Just and equal society

• Reduction in

• Unemployment rate to 4%

• Gini coefficient to 23%

• Poverty rates to 1% ( $2 per day PPP)

• High standards of living with focus on

• The growth of smart urban and rural areas.

• Transforming Kochi into a global city to bring it into A.T. Kearney index of global cities

• Culturally diverse, safe and just society.

 

˜ Clean and safe Environment

• Upgrade ecosystems, biodiversity, resources, through sustainable production systems and consumption;

• Protect forests and wetlands;

• Conserve the World Heritage bio-diversity of Western Ghats

• 20% increase in energy and water use efficiency.

 

Framework of Kerala Perspective Plan 2030

 

9.14 The framework for the development of the Kerala Perspective Plan 2030 has been conceived in terms of innovation-embracing entrepreneurs at the centre of the economy, with eight pillars of institutional elements, infrastructure, health and primary education, quality of higher education, labour market efficiency, development of financial Sector, Technological readiness and innovation built on the foundational elements of environmental sustainability and social sustainability (See Figure 1). The trajectory of encouraging, sustaining and enhancing growth will require decisive action to boost Kerala’s competitiveness and improve its future economic outlook.

 

Fig 1

Framework of Kerala Perspective Plan 2030

 

 

 

9.15 A competitive economic environment is built on eight pillars, of which the first pillar is the institutional environment determined by the legal and administrative framework within which individuals, firms and governments interact to generate wealth. The quality of institutions has a strong bearing on competitiveness and growth. The role of institutions goes beyond the legal framework. Government attitudes towards markets and freedom and the efficiency of its operations are also very important. Excessive bureaucracy and red tape, overregulation, corruption, lack of transparency and trustworthiness and the inability to provide appropriate services can considerably slow the process of economic development.

 

9.16 Infrastructure is the second pillar that is critical for ensuring effective functioning of the economy as it is an important factor in determining the location of economic activity and the kinds of activities or sectors that can develop within a region. Well-developed infrastructure reduces the effect of distances, lowers costs and reduces inequalities in a variety of ways. Effective modes of transport — quality roads, railway, ports and air transport — enable entrepreneurs to get their goods and services to the market in a secure and timely manner.

 

9.17 The third pillar of a competitive economic environment is health and primary education. A healthy workforce is vital to a region’s competitiveness and productivity, not to mention the State’s well being. Workers who are ill cannot function to their potential and will be less productive. Poor health leads to significant costs for businesses, as sick workers are often absent or operate at lower levels of efficiency. Astronomic health expenditure could also greatly reduce savings and investment.

 

9.18 The fourth pillar is quality higher education and training, which is crucial for economies that want to move up the value chain, beyond simple production processes and products. Today’s globalising economy requires countries to nurture pools of well educated workers, who are able to perform complex tasks and adapt rapidly to their changing environment and the evolving needs of the production system.

 

9.19 The fifth pillar is labour market efficiency. Efficiency and flexibility of the labour market is critical to ensure that workers are allocated to their most effective use in the economy and provided with incentives to maximise their productivity. Labour markets must, therefore, have the flexibility to shift workers from one economic activity to another rapidly and at low cost, and to allow for wage fluctuations without much social disruption.

 

9.20 Development of the financial sector is the sixth pillar of a competitive economic environment as it allocates the resources saved by citizens, as well as those entering the economy from abroad, to their most productive uses. It channels resources to entrepreneurial or investment projects with the highest expected rates of return.

 

9.21 The seventh pillar is technological readiness, which is the agility with which an economy adopts existing technology to enhance the productivity of its industries. It also includes specific emphasis on its capacity to fully leverage information and communication technology (ICT) in daily activities and production processes to increase efficiency and enable innovation for competitiveness.

 

9.22 The eighth pillar, innovation, can emerge from new technological and non-technological knowledge. Non-technological innovation is closely related to the know-how, skills and working conditions that are embedded in organisations. In the long run, sustained gains in productivity depend on innovation, which is a strong source of market power that entrepreneurs compete with existing firms to build.

 

9.23 Local governance (increasingly urban governance, as the State is urbanising rapidly) too has an important role to play in sustainable competitiveness. Globalisation and State devolution establish the contemporary context of urban and rural governance. Economic globalisation has made cities more vulnerable to the ebbs and flows of the international economy, compelling them to compete for business investment. More administrative authority and functional responsibility should be transferred from the higher to the lower levels of government.

 

9.24 KPP 2030 is organised in four volumes, which elaborate the four interconnected themes that together constitute its central tenet of balancing economic prosperity, social inclusion and environmental stewardship. Volume I begins with an analysis of the growth of the economy, identifies growth drivers and dynamism of enterprises in different sectors and then goes on to discuss strategies needed to spur entrepreneurial initiative. Volume II takes up the eight pillars of entrepreneurial activity, except some, such as health, that is more foundational and are taken up in the social sustainability volume (Volume IV) and some such as infrastructure that go into the environmental sustainability volume (Volume III). Thus, each volume has its own strengths and adds to overall value.

 

Knowledge-driven Sustainable Development Strategy

 

9.25 A central plank of Kerala’s sustainable prosperity will be the development of a knowledge economy. Two principles of this strategy are:

 

(i) Sustainable development: Quality of growth is ensured when the four dimensions of the growth process namely economic, human, social and environment interact positively in a virtuous cycle. There can be some difficult trade-offs between quantity and quality. Fast growth for instance can have conflicts with environment and social sustainability. Managing this qualitative aspect becomes essential for achieving sustainable improvements in welfare. Integrating them is technically and politically complex. It requires mutually supportive approaches whenever possible, and making trade-offs where necessary. The pursuit of sustainable development thus requires improving the coherence and complementarity of policies across wide ranging sectors. All policies should be judged by how they contribute to the four pillars of sustainable development. This means that sustainable development will become the central objective of all sectors and policies.

 

(ii) Knowledge economy: A knowledge economy is an economy where knowledge is acquired, created, disseminated and used effectively to enhance economic development. In a knowledge economy knowledge capital supersedes physical capital and labour as factors of production. Under the new paradigm of knowledge driven growth, the essential factors of production are new ideas, transformational innovations, and state-of-the-art technology focusing on the development of all other sectors to comprehensively advance the development level of the economy.

9.26 The new development strategy will integrate the principles of social justice and environmental protection such that social and environment capital complement physical capital to push the economy to the virtuous circle of knowledge-driven sustainable development process.

 

The strategic elements of this new development strategy for Kerala are:

 

9.27 Element 1: Knowledge creation and Knowledge diffusion: Constructing a knowledge-driven economy requires new skills, new ideas and a high level of creativity from a highly-trained, flexible and adaptable workforce. For a knowledge-driven society to flourish, a country needs to build its human capacity to meet its demands. This means that the new growth drivers of Kerala’s economy will be education and health care areas where Kerala has huge advantages. The new development strategy for Kerala proposed here emphasises that the State must build on its competitive strengths in these sectors by bundling them into product and service offerings and positioning itself in the Indian and global markets in these sectors to transform these consumption oriented sectors into tradable productive sectors. Productive capacities created in these sectors will harness the trade opportunities created by the process of globalisation and ICT revolution. These sectors will stimulate growth directly by generating income from the service trade and indirectly by encouraging productive capacities in other knowledge intensive sectors.

 

Action Plan 1: Developing knowledge nodes and health hubs and spokes as key structuring elements of the strategy

 

9.28 Setting up of global cities of education and health care will be used as the building blocks to transform the economy into a knowledge-based economy. It is proposed to create 6 global hubs within the State over a period of 20 years in Kozhikode, Malappuram, Thrissur, Thiruvanthapuram, Palakkad and Pathanamthitta. These global knowledge and medical hubs will attract reputed domestic and foreign service providers and universities to start campuses, research organisations and start-up firms. These hubs may be benchmarked against some of the known education hubs in UAE, Singapore, Hong Kong, Malaysia, Qatar, Bahrain, and South Korea; and medical hubs of Thailand, the Gulf region and South Korea. The development of urban centres around these knowledge hubs would have urban design qualities and urban infrastructure associated with a Global City.

 

Action Plan 2: Promoting spokes in each district

 

9.29 Each district will have a hub of specialised knowledge and will be developed as a spoke, well connected with the global hubs. In each district knowledge clusters will be created, based on specialised knowledge that draws on the competitive strengths of that area. These knowledge clusters will act as spokes and will be connected with global hubs (cities).

 

9.30 The success of the KPP 2030 strategy is closely linked with planned growth of urbanisation in Kerala. The strategy forward will be based on a holistic approach of developing a “Kerala State Spatial Strategy” within the framework of the Perspective Plan 2030. Regional/spatial planning gives geographical expression to the economic, social, cultural and ecological policies of society. It is at the same time a scientific discipline, an administrative technique and a policy developed as an interdisciplinary and comprehensive approach directed towards a balanced regional development and the physical organisation of space according to an overall strategy. The State Spatial strategy will safeguard areas of State interest and provide guidelines aimed at maximising the efficiency of human settlements and other productive efforts and enhancing rural urban complementarities. Mixed land use, developing smart, compact, clean and green cities will be the focus of this strategy. Kochi is envisioned to become a global city by 2030. Transit-oriented development (TOD) is recommended for the cities of Kerala. TOD is characterised by proximity to and a functional relationship with transit stations and terminals and service provision by high-quality public transit. Compact, mixed-use buildings and neighbourhoods that, because of their design, encourage walking, cycling, and use of public transit by residents, employees, shoppers and visitors are proposed to be set up. A successful TOD includes strategic (macro) and design (micro) elements such as a strong development climate and master plans for multi-use, high-intensity development supported by implementation plans.

 

9.31 Element 2: Promote knowledge economy by increasing the knowledge content of all other sectors: Another key element of the strategy will be to create a framework for policies to support the use of knowledge or science and technology as a factor playing a leading role in the process of growth. The strategy of focusing on knowledge and innovation will call for prioritising the development of ICT and tourism, the development of advanced manufacturing industries, developing hi-tech industries vigorously, renovating and upgrading traditional industries with competitive advantages and actively developing modern agriculture. There will be overall emphasis on improving the health and education sectors from bottom-up. In this respect, Kerala will focus on strengthening the critical elements to support the knowledge-based economy. This will call for the following strategic action plans.

 

9.32 The comprehensive strategy on education will be developed with quality (competitiveness) and social inclusion as two key components. The structure of higher education, vocational education and schooling will be revamped using different effective strategies. The goals of the KPP 2030 are the following:

• 100% enrolment in primary schools;

• 95% of all young people shall complete general or vocational upper secondary education by 2015;

• 50% of all young people shall complete a higher education programme by 2015;

• Everyone shall be engaged in lifelong learning;

• Kerala will account for 50% of India’s export in education services by 2030;

• 6% of the GSDP should be spent on education, of which 1.5–2% should be set aside for higher education.

 

9.33 The vision of the health sector in Kerala would be to provide health security provision to each and every one by 2030. The target also is to eradicate health care inequality. Health care would be accessible to every citizen. Kerala would also be able to establish itself in the global health care services market generating foreign exchange and driving its growth process. The goals of the KPP 2030 in the health sector are:

 

• Increase the health expenditure to GSDP ratio from 0.6 per cent in 2012 to 4−5 per cent by 2027−31. This will be achieved by 1 percentage point increase spread over the next 5 years plans.

• Reduce MMR from 81 to 12 per 1 lakh live births;

• Reduce IMR from 13 to 6 per 1,000 live births;

• Eradicate communicable diseases;

• Prioritise health areas to include mental diseases, alcoholism, and suicides;

• Increase the number of hospital beds from 34.6 per 10,000 in 2004 to 70 per 10,000 by 2030;

• Increase the number of nurses from 12.4 per 10,000 in 2004 to 65 by 2030;

• Increase the number of doctors from 9.9 per 10,000 population to 17.2 in 2030;

• Provide health insurance cover to all.

 

9.34 The rapid advancements in ICT, which will underpin the growth of the knowledge-based economy, will itself spawn new activities and areas of investment in all the sectors due to demand created within the State.

 

9.35 Measures to expand the tourism sector in newer areas by creating infrastructure and services, promoting targeted marketing campaigns, quality assurance and logistics, and improving training and identify the employment and entrepreneurial opportunities for the youth. New products will be developed in tourism like cashew and coir investment zones, tribal village tourism, museum tourism, etc.

 

9.36 Encouraging private investment in economic activity with the State assuming the role of facilitator and effective regulator. Kerala will be established as an attractive location for business investment in Asia. It will be dominated by high value added activities. The industrial sector will be innovation driven and socially and environmentally sustainable. The strategic goals for the industrial sector are:

 

• Increase the share of manufacturing from the current 8% to 10% of GSDP by 2030;

• Shift of the structure of industry from resource-driven to efficiency driven over the next 20 years. This will be on track to develop innovation-driven industrial sector;

• Share the registered sector in total manufacturing will rise to 80%;

• Sustained increase in employment in manufacturing;

• Adoption of clean production systems.

 

9.37 Replacing “livelihood approach” by “entrepreneurial approach” in the primary and traditional manufacturing sectors. There will also be a move to corporatize cooperative societies. Semi-skilled jobs will be brought within the folds of “Producer Companies” a form of corporatized cooperatives. Corporatisation does not mean privatisation. It implies a change in the organisational form with emphasis on efficiency and competitiveness. In a knowledge economy, the success of economic enterprises (including agriculture) will be reliant upon their effectiveness in gathering and utilising knowledge and the rate of learning. Increasing knowledge content and changing status of these occupations will attract the young generation to them. Government will provide the conditions and enabling infrastructures for these changes through appropriate financial, competition, information and other policies. Adopting new technologies and integrated farming techniques will help both agriculture and allied activities including, animal husbandry and livestock and fishing. Incentive structure will be redesigned to target activities and not sectors. Further, it will have both ‘’carrot and stick’’ measures, and not only the “carrot” method. Another common element of the strategy forward for agriculture and allied activities and traditional industries (cashew, handloom and coir) is to increase diversification, increase the value-additivity of products, invent and innovate with other industries. Promotion of the brand – “Made in Kerala” is a key strategy for all agro-based and products of traditional industries.

 

9.38 Good quality infrastructure is a key ingredient for sustainable development. Kerala will need efficient transport, water and sanitation, energy, and urban (and rural) development to attract private investment and provide a decent standard of living for their populations.

 

o Transport Infrastructure: The goal is to develop a regional, inter-state and international connectivity that caters to the economic and social aspirations of the people and also raise the State to the world arena of economy, education, health and tourism. Develop effective intra-city (city/town/Urban Agglomeration level) integrated transport facilities that give due importance for pedestrian facilities and non-motorised transport (including bicycles). Develop concerted strategies to increase the share of public transport and to reduce the number of private vehicles/ single passenger occupied vehicles on the roads. Overall for the State, a smart inter-modal transport system will be developed along with the conjunction of the Kerala Spatial Strategy 2030. Smart and intelligent public mass transport systems will be developed for Kerala.

o Energy is crucial for development of a knowledge economy and the shift will be towards increasing the share of supply of renewable energy and managing and conserving demand.

o The strategy is one of sustainable integrated management of water in all areas. Water needs to be conserved and valued. Recovering, recycling and re-using of water is the sustainable way out. New technologies will be adopted both on the supply and demand side for using water in a conservative fashion. Pricing and water metering may be used to monitor water usage. Micro irrigation schemes are recommended for Kerala. Water availability 24*7 is a key hallmark of smart, compact and global cities. Existing urban water schemes may be extended to supply water in the rural areas.

 

9.39 In order to marshal the private sector to respond with urgency, the Government will create greater awareness of the opportunities that will be generated through better dissemination of information.

 

9.40 Element 3: Mainstreaming social development: It is expected that the knowledge driven strategy will minimise the technical and political costs by being in agreement with the socio-historical-political contexts of the State. It will reinforce social capital by enriching the intellectual diversity and the overall learning environment within the State. However, it may not happen automatically. The Government will therefore ensure that the objectives of social development are integrated within the growth strategy. It will provide the poor and vulnerable sections equal access to opportunities for prosperity. Therefore, the strategies must involve not a mere alleviation of circumstances, but rather, a careful analysis of different vulnerabilities, how these can be prevented or diffused, and in general, the levels of social infrastructure that must be established for enhancing the quality of life for them. Mainstreaming of concerns of socially vulnerable groups are needed to alleviate their concerns. In urbanisation, infrastructure development, their concerns have to be taken into account while designing urban spaces or infrastructure. A differential strategy for Scheduled Castes (SCs) and Scheduled Tribes (STs) needs to be adopted. While SCs should be brought into the mainstream, culture of STs needs to be celebrated. However, the SCs and STs need targeted interventions in education and health to lessen historic inequities.

 

9.41 Element 4: Mainstreaming Environment: The vision is to achieve economic prosperity which is characterised by ecosystem resilience for the benefit of future generations. In that context, a strategic element of growth strategy is environmental sustainability. The environmental impact can be minimised using a well framed policy which will cover all the sectors and will further reinforce growth. Adoption of clean production mechanism for industry, integrated farms for agriculture and allied services, change in building norms, building smart clean green cities as per KPP 2030 and developing inter-modal transport are all elements of strategies in each sector where environment is mainstreamed and the strategy is one of green growth.

 

Implementation Strategy of KPP 2030

 

9.42 It is envisaged that approximately 40 per cent of the State GSDP will be required for investment in areas outlined in the Kerala Perspective Plan 2030 in the next three FYPs. This will require huge resource mobilisation. The following are the areas/sectors which require huge investment. Some Sector wise Investment Possibilities of Kerala Perspective Plan 2030 are listed at Appendix 9.1.

 

Key Principles

 

Leapfrogging: Leapfrogging is essential for transformation which is the first principle adopted when formulating the Perspective Plan. The underlying principle is to give a major push to the economy in which all sectors and stakeholders participate.

 

International benchmarking: Under the new strategy, Kerala’s economic prosperity will be benchmarked against the Nordic countries: Denmark, Norway, Sweden and Finland. With an economic structure which is similar to that of Kerala, these economies have been at the top of the Global Prosperity Index which is a weighted sum of economic, human and social capital. They are also topping the global ranking in terms of human development, economic competitiveness, social capital and environment capital generated by different unrelated global organisations. Since Kerala’s economy is close to that of Nordic countries in terms of the economic and institutional structure, the aim is to achieve the economic status of those countries.

 

Systems approach to planning: This approach would require coordinated efforts of all the government departments, production systems, communities, NGOs and people to achieve certain goals.

 

Coordinated action taken at all levels of government: An important principle of the Perspective Plan is complementarity in policies at all levels of government. Implementation of this plan requires a bottom up approach with local governments playing a key role in grass-root planning and its implementation.

 

Participation by all: Achievement of these objectives depends not only on the government of Kerala, but also on the active involvement of other stakeholders.

 

Creating conditions for the success of strategy

 

˜ Land, Labour and Capital: The Kerala Spatial Strategy 2030 adopted for urban and rural development will identify ecologically fragile land, forests, wetlands etc. They will be zoned and protected and no conversion will be allowed in those zones. Mixed zoning is the recommended strategy to build compact cities and villages. Land acquisition strategies are suggested which will be sustainable and inclusive. In case of capital, the diaspora will be the most important source for resource mobilisation for Kerala. Last but not the least for labour, an inclusive model is suggested which ensures flexisecurity.

 

˜ Institutions: A more integrated and comprehensive approach will be taken in developing the institutional framework to create a conducive environment for the proliferation of knowledge activities and knowledge-driven economic prosperity.

 

˜ Drive Science & Technology (S&T) in key sectors: Kerala will strengthen its base in sustainable development of S&T which will comprise economic, social and environmental dimensions. The KPP 2030 proposes a new Innovation policy which will aim at creating an “Innovation Ecosystem”, incorporating the three advantages. It will involve systematic engagement of the three sub-systems in interactive learning:

 

o The regional production structure or knowledge exploitation sub-system which consists mainly of firms, especially where these display clustering tendencies;

o The regional supportive infrastructure or research sub-system which consists of public and private research laboratories, technology transfer agencies, and research consultants;

o Academic subsystem consisting of universities and colleges, vocational training organisations, etc.

 

˜ Governance for sustainable growth: Better governance is a pre-requisite for sustainability. For sustainable prosperity in Kerala, the theme has to be rather “Get the government do its duty than get the government to off you back”. Further, it will require institutional, organisational and cultural change in governance to improve its quality and deliver on the vastly increased duties of the government envisaged in the report. E-Governance will play a major role in good governance with development of citizen-centric governance.

 

˜ Diaspora: The proposed strategy is to mainstream the three categories of migrants: Non Resident Keralites(NRKs), return emigrants, and in-migrants, in the development agenda by creating an enabling environment into which the migrants are effectively integrated and able to make significant contributions to the development of the country. The main thrust is therefore, to harness the diaspora (including return migrants) and in-migrants as a resource for development. Remittances will be directed into creating physical and social infrastructure for the effective development of Kerala.

 

˜ Entrepreneurship: The KPP 2030 proposes creating an entrepreneurial ecosystem encompassing all the elements that entrepreneurs need to thrive on. This ecosystem has six elements:

o Personal enablers,

o Financial enablers,

o Business enablers,

o Professional enablers.

o Economic enablers (economic policies and performance) and

o Social entrepreneurs.

 

9.43 The immediate challenge before the State is to ensure that the Perspective Plan is translated into reality. The two biggest challenges in this regard are, first, aligning the existing Plan framework with the Perspective Plan so as to translate the vision into a reality. The second challenge is mobilizing the resources. The State Government alone cannot undertake this task. Funds and support from the central Government and active participation of the private sector is required for implementing the strategies articulate in the plan. Going forward, the success of the Perspective Plan depends on the commitment not only of successive governments at the State and local body levels, but also on the support we receive from the Union Government and the private sector in achieving our goals. As a first step in this direction, Rs. 25 crore in the Annual Plan 2015-16 budget was provided to kick start the process of implementation of the KPP 2030. Alongside, other initiatives have also been aligned with the KPP 2030.

 

 

 

Initial Steps in Implementing KPP 2030

 

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9.44 Major Infrastructural Development Projects: Inadequate infrastructure development has been a major concern in Kerala limiting the potential of growth and employment in the State. Lack of financial resources has been one of the critical factors hampering the growth of infrastructure development in the State.Often,infrastructure projects have been delayed due to non-availability of funds on time. KPP 2030 recognises that infrastructure is a crucial pillar for a competitive economic environment and is a critical factor for ensuring effective functioning of the economy.

 

9.45 Recognising the need for a major thrust in the field of infrastructure development, the State Government in its 12th Plan earmarked a lump sum amount under a single head “Major Infrastructural Development Projects”. Under this head there is a flexibility to utilise the funds against any of the intended major infrastructural development projects depending upon its requirement and performance. A token provision of Rs. 1 lakh is included against each scheme covering different sectors, and the additional funds required for implementation of the scheme is re-appropriated from the outlay provided under the new head “Major Infrastructural Development Projects” depending on the actual requirement. This was introduced to ensure timely availability of funds for major projects and to incentivise the utilisation of funds for major projects. The normal practice is to allocate funds for individual projects which may either not be sufficient or may not be spent. This approach has the advantage that funds can be allocated to the intended projects which are progressing. Since 2013-14, an amount of Rs. 4071 crore has been budgeted for the scheme under Annual Plans. In 2013-14, a total amount of Rs. 846.03 crore was allocated for 10 projects which included Kochi Metro, High Speed Rail Corridor, Vizhinjam International Deep-water Multipurpose Sea Port, Kannur Airport etc. This amount was enhanced to Rs. 1225 crore in 2014-15 and to Rs. 2000 crore in 2015-16. The number of projects was also raised to 11 in 2015-16. Thus, a major step in filling the infrastructure deficit has been taken in the State by an innovative budgeting mechanism.

 

9.46 Expert Committee on School Education: Kerala’s achievements in the sphere of education are well-known. Public provisioning has been the cornerstone of educational policy in Kerala, especially school education, since independence. Infrastructural facilities have also improved much in schools. But the quality of education has been deteriorating in recent years and the subject calls for immediate attention. This has been dealt in detail in KPP 2030. Kerala’s education sector, a key base of the knowledge economy, has to be transformed to become a knowledge creator and support the growth of entrepreneurship. In the education sector, as per KPP2030 transforming the school system involves seven components: international benchmarking, participation in Program for International Student Assessment (PISA), developing a common school system, developing unified curricula, teachers training and expansion of school infrastructure in backward areas.

 

9.47 In this context, Kerala State Planning Board, in its 12th Board Meeting held on 14-05-2014 decided to constitute an Expert Committee for studying the deterioration of the quality of school education in the State and to make recommendations for improving the school education system. The Committee has made far reaching recommendations to improve the quality of school education in the State. Some of the important recommendations are in the areas of recruitment and development of career paths of teachers; teaching, assessment and learning outcomes; school governance; school infrastructure and teaching material; synchronization of different agencies; all round development of children; and approval and accreditation of schools.

 

9.48 The recommendations of the Committee are premised on the tenet that an education system is only as successful as the value assigned by the society to the teaching profession. The society would value the profession highly when the calibre of the incumbents is of a very high order which would require systems to attract the best talent in the society and train them to excel. The highest-performing countries in education take a comprehensive approach to the teaching profession by actively recruiting high-quality entrants, raising the rigor of teacher preparation programs to equip prospective teachers with strong subject matter skills and extensive clinical experience, mentoring every new teacher, developing career paths and leadership roles for outstanding teachers, and providing effective forms of professional learning and collaboration directed at student achievement. The recommendations have followed from the premise adopted by the Committee.

 

9.49 Some of the key recommendations of the Committee are the following. It is recommended to develop teacher leaders for the purpose of mentoring beginning teachers, coaching teachers in specific subjects, observing teachers and providing feedback on classroom practice, leading professional learning in schools, working with schools in poor neighborhoods to strengthen curriculum or teaching, providing input into policy, and to carry out action research in schools.The Committee has recommended revamping of pre-school education. Uniform curriculum should be implemented and children should not be over burdened. They should not be taught more than the prescribed syllabus. There should be a single agency to co-ordinate the Pre-School Education in the State.

 

9.50 The Committee has emphasized that barrier free environment should be ensured to the children with special needs. As Government Schools are more inclusive in nature, a large number of children with special needs study there. But the infrastructural facilities (like special toilets, IED Centres and facilities in the IED Centres (like instruments for physio therapy, brain motivating toys etc.) are very poor. Hence, special financial support for this purpose should be made available to the Government Schools. A certain percentage of children suffer from various learning disabilities, such as dyslexia and dyscalculia. Steps should be taken for their early identification. Specialized teachers should be available as per the students’ strength to take care of these needs.

 

9.51 Comprehensive Mission on Employment Generation: Promoting self-employment has been a policy of the government for long. Self employment is of two types: opportunity driven and necessity driven.Opportunity-driven entrepreneurs are those who introduce new products and processes to the market. They are innovation-embracing entrepreneurs driving economic change through innovative ideas and technology. On the other hand, necessity-driven-entrepreneurs are replicative agents, who start businesses similar to those they see around them. For them, business is a way of earning a livelihood.Both classes of entrepreneurs require an entrepreneurial ecosystem to thrive that has six enablers- personal enablers, financial enablers, business enablers, professional enablers, economic enablers, and social entrepreneurs- in addition to certain economy and society wide factors.

 

9.52 Current schemes of self-employment give prominence to two enablers, namely financial enablers and economic enablers, with the other enablers almost missing. Recent years have seen the setting up of incubators which bring in two more enablers –professional and environmental- into the ecosystem. Independently, there has been skill training for entrepreneurial development. But the coming together of many enablers, which is essential for a thriving self-employment scene, has not taken place.Opportunity- driven entrepreneurship, however, does not emerge without a stream of innovation, which is a strong source of market power that entrepreneurs compete with existing firms to build. The stream of innovation would see the sprouting of entrepreneurs taking the economy to higher levels of technology and productivity as propounded by KPP 2030.

 

9.53 Notwithstanding the various initiatives of different departments in promoting self-employment among low skilled people, there has been little progress in developing an entrepreneurial culture or economy in the State. The observed low proportion of self-employed in the workforce in Kerala is owing to the poor entrepreneurial ecosystem in terms of the six enablers and the poor orientation of the higher education system towards knowledge creation and innovation.

 

9.54 Recognising the importance of changing the entrepreneurial ecosystem in the State to promote self employment, the Vice Chairman of the State Planning Board constituted a Task Force to formulate a Comprehensive Self-Employment Scheme after studying the present scenario of self-employment schemes implemented through various agencies, including commercial banks. The Task Force working through eight subcommittees that looked into various aspects of self employment in the State submitted a comprehensive report proposing the constitution of a single overarching mechanism, viz., Comprehensive Mission on Employment Generation (MEGA), to provide holistic direction and oversight to self-employment programmes and ensure end to end vital services to potential entrepreneurs.

 

9.55 The Mission is proposed to have a 3-tier structure, comprising a State Mission Unit, District/Corporation Mission Units, and a pool of empanelled, accredited resource personnel/agencies at the grass root level to provide end to end services. The Mission will be mandated to extend critical support in areas, particularly Skill and Competence Development, Business Planning, Financial Linkages, Market Linkages, Technology and Infrastructure Support, Mentoring, Compliance support and IT services. The Mission will be an interface between government schemes, service providers and the potential entrepreneurs.

 

9.56 The Cabinet has accepted the recommendations of the Task Force and the Government has already passed the necessary orders to go ahead with the Mission.