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Economy
of Kerala
Since its incorporation as a state,
Kerala's economy largely operated under welfare based democratic
socialist principles. In recent years, the state has liberalised its
increasingly mixed economy, allowing greater participation by the
free market and foreign direct investment. Kerala's nominal gross
domestic product (as of 2004–2005) is an estimated 89451.99 crore
INR, while recent GDP growth (9.2% in 2004–2005 and 7.4% in
2003–2004) has been robust compared to historical averages (2.3%
annually in the 1980s and between 5.1% and 5.99% in the 1990s).
Nevertheless, relatively few major corporations and manufacturing
plants choose to operate in Kerala. This is mitigated by remittances
sent home by overseas Keralites, which contributes around 20% of
state GDP. Kerala's per capita GDP of 11,819 INR is significantly
higher than the all India average, although it still lies far below
the world average. Additionally, Kerala's Human Development Index
and standard of living statistics are the nation's best. This
apparent paradox—high human development and low economic
development—is often dubbed the Kerala phenomenon or the Kerala
model of development, and arises mainly from Kerala's strong service
sector.
The service sector (including tourism, public administration,
banking and finance, transportation, and communications—63.8% of
statewide GDP in 2002–2003) along with the agricultural and fishing
industries (together 17.2% of GDP) dominate Kerala's economy. Nearly
half of Kerala's people are dependent on agriculture alone for
income. Some 600 varieties of rice (Kerala's most important staple
food and cereal crop) are harvested from 3105.21 km² (a decline from
5883.4 km² in 1990) of paddy fields; 688,859 tonnes are produced per
annum. Other key crops include coconut (899,198 ha), tea, coffee
(23% of Indian production,[66] or 57,000 tonnes), rubber, cashews,
and spices—including pepper, cardamom, vanilla, cinnamon, and
nutmeg. Around 1.050 million fishermen haul an annual catch of
668,000 tonnes (1999–2000 estimate); 222 fishing villages are strung
along the 590 km coast. Another 113 fishing villages dot the
hinterland.
Traditional industries manufacturing such items as coir, handlooms,
and handicrafts employ around one million people. Around 180,000
small-scale industries employ around 909,859 Keralites; 511 medium
and large scale manufacturing firms are located in Kerala. A small
mining sector (0.3% of GDP) involves extraction of ilmenite, kaolin,
bauxite, silica, quartz, rutile, zircon, and sillimanite. Home
gardens and animal husbandry also provide work for hundreds of
thousands of people. Other major sectors are tourism, manufacturing,
and business process outsourcing. Kerala's unemployment rate is
variously estimated at 19.2% and 20.77%, although underemployment of
those classified as "employed", low employability of many
job-seeking youths, and a mere 13.5% female participation rate are
significant problems. Estimates of the statewide poverty rate range
from 12.71% to as high as 36% |
