Economy of Kerala
Service industry dominates the Kerala economy. Kerala leads many other Indian states and territories in terms of per capita GDP (Rs.74,620) and economic productivity, and Kerala's Human Development Index is the best in India. According to the Global Hunger Index 2008, the severity of hunger situation in Kerala is "serious", which is better than the grade "alarming" received by many Indian states. Kerala's low GDP and productivity figures juxtaposed with higher development figures than in most Indian states is often dubbed the "Kerala Phenomenon" or the "Kerala Model" of development by economists, political scientists, and sociologists. This phenomenon arises mainly from Kerala's land reforms, social upliftment of entire communities and reforms introduced by the communist party which had held the state for a long period of time. Some describe Kerala's economy as a "democratic socialist welfare state". Some, such as Financial Express, use the term "Money Order Economy". Kerala's economic progress is above the national average, but relatively few major corporations and manufacturing plants are headquartered in Kerala.
Around 3,000,000 Keralites are working abroad, mainly in Persian Gulf; to where migration started with the Gulf Boom. The Kerala Economy is therefore largely dependent on remittances. S. Irudaya Rajan describes the situation as "Remittances from global capitalism are carrying the whole Kerala economy". Unemployment recently dropped from a large 19.1% in 2003 to 9.4% in 2007 and only 4.2% in 2011 . Underemployment, low employability of youths, and a 13.5% female participation rate are chronic issues.:5, 13 One concern is that Kerala government is running some of the highest deficits in India.
This is a chart of trend of gross state domestic product of Kerala at market prices estimated by Ministry of Statistics and Programme Implementation with figures in millions of Indian Rupees.
|Year||Gross State Domestic Product|
The state's debt was estimated at 56 per cent of GDP in 2005.
Kerala produces 97% of national output of pepper and accounts for 85% of the area under natural rubber in the country. Coconut, tea, coffee, cashew, and spices — including cardamom, vanilla, cinnamon, and nutmeg — comprise a critical agricultural sector. A key agricultural staple is rice, with some six hundred varieties grown in Kerala's extensive paddy fields. Nevertheless, home gardens comprise a significant portion of the agricultural sector. Related animal husbandry is also important, and is touted by proponents as a means of alleviating rural poverty and unemployment among women, the marginalized, and the landless. Feeding, milking, breeding, management, health care, and concomitant micro-enterprises all provide work for around 32 lakh (3.2 million) of Kerala's 55 lakh (5.5 million) households. The state government seeks to promote such activity via educational campaigns and the development of new cattle breeds such as the "Sunandini".
The state government holds a huge monopoly over liquor sale in the state, after the state banned foreign liquor shops, through the government owned Kerala State Beverages Corporation (KSBC). Every year, liquor sales have been rising and the total sales of liquor and beer during 2010-11 fiscal year is expected to be about Rs.6,700 crore.
The government applies the highest state tax on liquor (around 120%). This earns it high revenues. Total revenue by way of taxes on the sale of liquor was Rs.5,539 crore in 2009-10. Kerala has the highest per capita consumption: over eight litres (1.76 gallons) per person a year, in the nation, overtaking traditionally hard-drinking states like Punjab and Haryana. Rum and brandy are the preferred drinks in Kerala in a country where whisky outsells every other liquor. Taxes on alcohol is a major source of revenue for the state government. More than 40% of revenues for its annual budget come from liquor sales. Revenues from alcohol to the state's exchequer have registered a 100% rise over the past four years.
Kerala is an established tourist destination for both Indians and non-Indians alike. Tourists mostly visit such attractions as the beaches at Kovalam, Cherai, Kappad, Muzhappilangad Beach and Varkala, the hill stations of Munnar, Nelliampathi, Wayanad and Ponmudi, and national parks and wildlife sanctuaries such as Periyar and Eravikulam National Park. The "backwaters" region — an extensive network of interlocking rivers, lakes, and canals that center on Alleppey, Kumarakom, and Punnamada — also see heavy tourist traffic. Examples of Keralite architecture, such as the Padmanabhapuram Palace, Malik Deenar Mosque Kasaragod are also visited. The city of Kochi ranks, also known as the "Queen of the Arabian Sea" has the highest number of international and domestic tourists in Kerala. The capital city Thiruvananthapuram, Kozhikode (Land of Zamorins) and Alappuzha(called the "Venice of the East") are also popular destinations. Tourism plays an important role in the state's economy.
BSE listed Kerala companies
- State Bank of Travancore
- Federal Bank
- Dhanlaxmi Bank
- South Indian Bank
- Cochin Minerals and Rutile Limited
- Kerala Solvent Extractions Ltd
- Manappuram General Finance and Leasing Ltd
- Muthoot Finance
- Harrisons Malayalam
- ESAF Microfinance and Investments
- Accel Transmatic Limited
- Geojit BNP Paribas
- GTN Textiles Limited
- Kitex Garments
- Nitta Gelatin India Ltd
- Eastern Traders
- Rubfila International
- Kerala Ayurveda Ltd
- Vertex Securities Ltd
- Industries Ltd
- Sree Sakthi Paper Mills
- AVT Natural Products
In a state of 32 million where unemployment approaches 20 percent, one out of six employed Keralite now works overseas. As of 2008, the Gulf countries altogether have a Keralite population of more than 2.5 million, who send home annually a sum of USD 9.25 billion, which is more than 15.13% of Remittance to India in 2008. The largest number work in construction, although high literacy allows Keralites to secure office work. Foreign remittances augment the state’s economic output by nearly 25 percent. Migrants’ families are three times as likely as those of nonmigrants to live in superior housing, and about twice as likely to have telephones, refrigerators and cars. Pathanam thitta and Thrissur districts have on an average one member from each household a non-resident Indian.
Of the $71 billion in remittances sent to India in 2012, Kerala still received the highest among the states: $11.3 billion, which is nearly 16%.
Kerala is the single largest originator of education loans for the country as a whole.Total disbursal of education loans amount to Rs.6,000 crore.
Kerala has 145,704 km of roads (4.2% of India's total). This translates into about 4.62 km of road per thousand population, compared to an all-India average of 2.59 km. Virtually all of Kerala's villages are connected by road. Traffic in Kerala has been growing at a rate of 10–11% every year, resulting in high traffic and pressure on the roads. Total road length in Kerala increased by 5% between 2003-2004. The road density in Kerala is nearly four times the national average, and is a reflection of Kerala's unique settlement patterns. India's national highway network includes a Kerala-wide total of 1,524 km, which is only 2.6% of the national total. There are eight designated national highways in the state. Upgrading and maintenance of 1,600 km of state highways and major district roads have been taken up under the Kerala State Transport Project (KSTP), which includes the GIS-based Road Information and Management Project (RIMS). Kerala ranks second nationwide in diesel-based thermal electricity generation with national market share of over 21%.
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- States of India by size of economy
- "The India State Hunger Index: Comparisons Of Hunger Across States". 2008.
- "Cashing out of the money order economy".
- Deparle, Jason (September 7, 2007). "Jobs Abroad Support ‘Model’ State in India". New York Times. Retrieved May 1, 2010.
- K.P. Kannan, K.S. Hari (2002). "Kerala's Gulf connection: Emigration, remittances and their macroeconomic impact 1972-2000".
- S Irudaya Rajan, K.C. Zachariah (2007). "Remittances and its impact on the Kerala Economy and Society".
- Kumar KG (2007-10-08). "Jobless no more?". The Hindu. "A study by K.C. Zacharia and S. Irudaya Rajan, two economists at the Centre for Development Studies (CDS), Thiruvananthapuram, unemployment in Kerala has dropped from 19.1[%] in 2003 to 9.4[%] in 2007."
- Nair NG. Nair PRG, Shaji H, ed. Measurement of Employment, Unemployment, and Underemployment (PDF). Kerala Research Programme on Local Level Development. Thiruvananthapuram: Centre for Development Studies. ISBN 81-87621-75-3. Retrieved 2008-12-31.
- Government of Kerala 2004, p. 4.
- "Kerala economy climbs to $23b by 2005". Specials.rediff.com. 2009-03-31. Retrieved 2012-03-23.
- "Kerala debt was estimated at 56 per cent of GDP in 2005". Specials.rediff.com. 2009-03-31. Retrieved 2012-03-23.
- [dead link]
- (Sreedharan 2004, p. 5).
- "Bevco pockets Rs.600 crore in December". The Hindu (Chennai, India). January 5, 2011.
- "Official web site of Kerala State Beverages Corporation Limited". Ksbc.kerala.gov.in. Retrieved 2012-03-23.
- "Tourist statistics – 2008". Government of Kerala, Tourism Department. Retrieved 2010-10-22.
- GCC residency cap may force lakhs to return by Biju Govind; The Hindu - Tuesday, Aug 19, 2008
- (DeParle 2007).
- "Remittances: Kerala drives dollar flows to India". Yahoo! Finance. 5 November 2013. Retrieved 8 November 2013.
- "High time Kerala looked beyond remittance income, says study". Deccan Chronicle. 4 November 2013. Retrieved 8 November 2013.
- Our Bureau (2012-03-13). "Business Line : OTHERS / STATES : Kerala largest originator of education loans". Thehindubusinessline.com. Retrieved 2012-03-23.
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