16.5.11

Keralanomics




India’s most literate state can flaunt economic growth that’s on a par with national average. This has been true for over five years. Kerala’s per capita income is high, and consistently so. Kerala’s average industrial growth rate from 2004-05 to 2009-10 has risen steadily by 10.56% at constant prices. Manufacturing growth was 14.65% in 2009-10 compared with 2.08% in 2005-06 while the sector’s contribution to the state’s GDP rose to 9.26% in 2009-10. Even the state’s perennial problem, industrial disputes, has waned. The number of such disputes fell by 14.1% in 2009-10 from a year ago. “The biggest achievement of the government is that revenues have risen by nearly 20% in five years and overall expenditure has more than doubled since we came to power,” says outgoing finance minister TM Thomas Issac. For a state that depends hugely on foreign remittances, not just the services sector, the unorganised sector, too, has grown rapidly in recent years. According to government data, the outgoing government has managed to pull off a massive turnaround in public sector units. At a time when PSUs are struggling across the country, in Kerala, it is a different story. In 2005-06, only 12 out of 44 companies were making profits while the majority were making losses. In 2009-10, 32 of the 37 companies (four electronics units were merged) became profitable. Together, they made a total profit of 239.75 crore compared with a loss of 69.64 crore in 2005-06. Education is the edge the state has over other Indian states, says Suresh Babu, who teaches economics at IIT Madras and Bangalorebased Institute for Social and Economic Change. The educated population can meet the demands of global labour markets. “Girls were educated on a par with boys, a unique virtue of Kerala compared to other states,” says Babu.

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