Industrial development is crucial to the socio-economic development of any nation. The industrial sector contributes significantly to employment generation, poverty alleviation and improvement to general standard of living of the people. The growth of industry is also linked to the modernisation of agriculture, development of science and technology, growth of entrepreneurship, self-reliance in defence production, success in international trade, and efficient utilisation of natural resources.

There are many factors favouring industrial growth in Kerala. Those include Kerala’s highly skilled labour force and the relatively high levels of consumption in the State. Per capita consumption expenditure in rural Kerala is twice that of rural India. The per capita consumption expenditure in urban Kerala is 1.3 times that of urban India. Therefore, Kerala offers a ready market for several industrial activities. Kerala’s geo-strategic location on the international maritime route, with seaports like Vallarpadam and the upcoming Vizhinjam, provides a unique opportunity for export oriented industries. Kerala has three international airports, and a new airport is coming up in Kannur. There is a powerful and vocal Kerala diaspora abroad. However, Kerala’s high density of population, poses a major challenge in getting large tracts of land for industries. Development of industrial estates or zones is particularly important in the State.

Industrial sector in Kerala

Industrial sector in Kerala comprises medium and large industries, micro, small and medium enterprises (MSME) and traditional industries. The departments/agencies that deal with medium and large industries are Kerala State Industrial Development Corporation Ltd (KSIDC), Kerala Industrial Infrastructure Development Corporation (KINFRA), Public Sector Restructuring and Internal Audit Board (RIAB), Bureau of Public Enterprises (BPE) and Centre for Management Development (CMD). The agencies dealing with MSME and traditional industries are Department of Industries and Commerce, Directorate of Handloom and Textiles, Directorate of Coir Development, Khadi and Village Industries Board and Capex. Department of Mining and Geology also comes under this sector. The subsector-wise outlay and expenditure in the Twelfth Five-Year Plan and Annual Plan 2016-17 and 2017-18 are shown in Table 3.1.1.

Table 3.1.1
Sub Sector-wise Outlay and Expenditure, in lakh
Sl.No Name of Department/Scheme XII Five-Year Plan Annual Plan 2016-17 Annual Plan 17-18
Outlay Expenditure Outlay Expenditure Outlay Expenditure
(as on Oct 2017)
1 Medium and Large Industries 130643.0 99932.0 29178.0 18023.3 48296.0 20407.0
2 Department of Mining and Geology 893.0 536.1 84.00 48.8 135.0 88.33
3 Village and Small Scale Industries 169198.0 152328.1 36631.0 39593.9 40446.0 13048.3
Total 300734.0 252796.2 65893.0 57666.0 88877.0 33543.6
Source: Budget Estimate

The Government earmarked 3,007.3 crore for the industries sector during the Twelfth Five-Year Plan and the expenditure was 2,528 crore (84.1 per cent). In Annual Plans 2016-17 and 2017-18, the outlays for the sector were 658.9 crore and 888.8 crore respectively. The expenditure in Annual Plan 2016-17 was 576.7 crore (87.5 per cent) and in 2017-18, the expenditure reported as on October 2017 was 335.4 crore (37.7 per cent). The amount earmarked in Annual Plan 2017-18 for industry sector was 35 per cent higher than the previous year.

Box 3.1.1
Approach to the 13th Five-Year Plan
  • Increase in industrial production – private, co-operative and public sector enterprises – with funding from multiple sources of investment.
  • Effective use of advanced technologies, including biotechnology and nano technology.
  • To build a strong manufacturing base in Kerala, priority to be given to industries that have connection with the State’s agricultural, natural and marine resources.
  • Promotion of food and agro-based industries.
  • Long term revival of manufacturing public sector units by rethinking their product line and technologies.
  • Transform PSUs into facilitators for high technology enterprises in the private sector.
  • Make use of the latest advances in biotechnology, biomedical sciences and biochemical engineering to produce new and more value added products.
  • Setting up of research institutes in the development and application of biotechnology.