Opening up, globalisation has hit Kerala economy; Plan Panel Report

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New Delhi, Sep 4 (UNI) Commending Kerala's progress on social indicaters, The Planning Commission's Kerala State Development Report released here today says in the materially productive sectors of agriculture and industry, its performance has "not been remarkable." Releasing the Report, Planning Commisson member Bhalchandra L Mungekar said the State has not been able to make much headway with regard to industrialisation due to miltitant trade unionionism. He, however, added that trade union rights having been enshrined in the Constitution cannot be abridged. Besides, as a result of much greater emphasis on higher education and literacy, the rates of unemployment have also been high.

Dr Mungekar said due to its formidable emphasis on improving the welfare of the people, the fiscal situation has been under stress.

Nevertheles, due to persistent efforts of the State Government, the fiscal conditions have shown some improvement of late.

The Report says the remittance boom, which began in the mid 1970s, has compensated for the deficiency in domestic production, but has done little to revive and drive the goods producing sectors. Unequal Centre-State relations, the type of links with the external world, the high wage syndrome, labour militancy and the narrow industrial base are the important causative factors for stagnation or low growth.

After recording relatively high growth rate during the 1990s, the Kerala economy has entered a period of stagnation or even decline in recent years. The relative shares of the primary and secondary sectors have drastically come down. An overall improvement has taken place only in the tertiary sector.

Within agriculture, there has been taken place a movement away from labour-intensive annual crops to less labour intensive commercial crops, whose products are exposed to international competition.

Since the beginning of the WTO regime, which began in the mid-1991s, bilateral trade agreements and comprehensive economic co-operation agreement with ASEAN countries have done damage to the Kerala economy, even though their net impact on the national economy could have been positive.

The Report says the industrial sector of the State is hamstrung and lopsided with limited capital investment available for modernisation, technological improvements and product diversification necessary to keep with requirements of global market.

The tertiary sector, which produces mainly non-tradables, is less exposed to international competition. Therefore, a structural shift has taken place towards such activities. The shift has advserly affected the revenue-earning capacity of the Kerala economy. The situation calls for attention that would harness the high human development gains of the State to knowledge-intensive economic sectors.

The Report says since the formation of the State in 1956, Kerala has striven consistently to bring down inter-regional disparities, gone ahead with progressive legislations on land tenures and agrarian relations, brought down mortality and fertility rates and arrested population growth rate, promoted educational growth with significant support to private sector initiatives and expanded and modernised the healthcare sector.

It says in the process of large scale emigration that began in the early 1970s has kept the Kerala economy on an even keel and promoted revolutionary changes in consumption patterns, housing conditions, education levels and health status.

It notes that the growth rate of population has been steadily declining since 1971. At present, it is the lowest in India. In terms of density of population Kerala is one among the top. Kerala's sex ratio is unique among the States of India , being 1058 females per 1,000 males in 2001. Kerala achieved universal literacy as early as 1991. However, its worker participation rates for both men and women are lower than those of all India.

UNI GS SG ND1805

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