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Kerala is one of the most well performing states all over India with its gross domestic product touching $26.4 billion. The state holds an important position from the point of view of industrial performance. It accounts for a large part of the nation's produce. Between January 1999 and December 2005, Foreign Direct Investment (FDI) approved in the state was $270.4 million in 184 projects, which constituted 1.26 per cent of the total FDI approvals in the country.
Nearly half of its population has agriculture as its primary source of livelihood and agriculture in Kerala is characterized predominantly by cash crops. Kerala is a major producer of coconut, rubber, pepper, cardamom, ginger, banana, cocoa, cashew, arecanut, coffee and tea. Kerala is also engaged in the cultivation of spices like nutmeg, cinnamon and cloves. Kerala accounts for 92 per cent of the rubber, 70 per cent of coconut, 60 per cent of tapioca and almost 100 per cent of lemon grass oil produced in the country. Agriculture in Kerala has the distinction of having the highest gross income per net cropped area.
Kerala Economic Review: 2002-03
The economy of Kerala has grown impressively between 1999-00 and 2005-06 at a CAGR of 10.25 per cent and in 2005-06,. its gross state domestic product (GSDP) stood at $26.44 billion. This growth has been driven by all three sectors – primary (comprising agriculture and livestock, forestry and logging, fishing, mining and quarrying), secondary (comprising manufacturing, construction and electricity, gas and water supply) and tertiary (comprising trade, hotels and restaurants, transport, storage and communication, financial services, real estate and related services, public administration and other services). The tertiary sector, in particular, has shown significant increase in contribution over the years.
Mining and quarrying in the primary sector in the fiscal year 2005-06 recorded a growth rate of 12.7 per cent over the previous year, followed by agriculture and allied activities, which registered a growth of nine per cent in 2005-06. Manufacturing dominates the secondary sector particularly chemicals and fertiliser, food processing, and construction. Construction registered the highest growth of 17 per cent in 2005-06 within the secondary sector. In the tertiary sector, travel and tourism is the main segment that contributes almost 13 percent to GSDP and grew at 14.5 per cent in 2005-06.
Source: NCAER
Economic Prosperity
Kerala's per capita income is one of the highest in the country. From 1999-2000 to the fiscal year 2004-05, it has grown at a level of $618.9 from $416.3 which is even higher than the average per capita of the entire country which stood at $514.2.in 2004-05. The percentage of population in Kerala below the poverty line was 3.6 in 2004-05, as compared to the all-India percentage of 19.34.
The annual income of households is also an important indicator of the economic prosperity of people in the state. A comparison of distribution of households by various income categories in Kerala vis-à-vis the all-India figures shows that the share of households in higher income categories in Kerala is more. There are 50.4 per cent urban households in the high income category as against 39.0 per cent of national urban households. Same goes true for the rural households. In Kerala, rural households in the high income group account for 53.0 per cent as compared to only 16.8 per cent of all-India rural households.
Another criteria of judging the living standard of people is the ownership of physical assets by the households. A comparison of asset ownership by households indicates a higher ownership of these assets in Kerala vis-à-vis all-India, except in the case of two-wheelers. 51 per cent of Kerala’s households own a television, as against an all-India figure of 41 per cent. Similarly, five per cent of Kerala’s households own a four-wheeler as compared to the all-India percentage of four.
Kerala has tremendous further scope to prosper on the industrial front as it has well developed infrastructure facilities like power, transport system, airports, ports and availability of rare minerals. Traditional industries are handlooms, coir, cashew, and handicrafts. Other chief industries are rubber, tea, ceramics, drugs and chemicals, telephone cables, transformers, beedi and cigar,bricks and tiles, general engineering, electric and electronic appliances, plywood splints and veneers, soaps, oils, fertiliser and khadi and village industry products.
There are 727 large and medium industrial undertakings in Kerala. Out of these, 590 units are in the private sector. The small-scale sector contributes to 40 per cent of industrial production and 35 per cent of exports from the state. There were 193,302 SSI units, with an investment of $1.3 billion and providing employment of 710,508 persons, towards the end of March 2006.
Source: Kerala Economic Review
2003
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