Apex trade organisation Assocham on Monday said Kerala needs to create 30 lakh job opportunities and attract investment worth Rs six lakh crore in the next five years to achieve double-digit growth.
The Associated Chambers of Commerce and Industry of India (Assocham) in its ‘Sustainable Action Plan’ for the Communist Party of India-Marxist (CPI-M) -led Left Democratic Front (LDF) government in Kerala said this in a paper titled ‘Action Agenda for New Government of Kerala’.
The apex body on trade and commerce said: “Kerala’s contribution to the Indian economy declined from four per cent in 2005-06 to 3.8 in 2011-12.
The compounded annual growth rate (CAGR) was over seven per cent between 2004-14.
Assocham Secretary-General D.S. Rawat said: “Growth of industries and services sector in Kerala was hampered by high labour costs … the new government needs to ensure appropriate growth… with a potential to generate employment.”
Kerala recorded 14 per cent compounded annual growth rate (CAGR) between 2006-07 and 2015-16 attracting investment worth Rs three lakh crore.
Rawat also said: “Besides, it should also focus on effective implementation of investment projects and treat them on priority basis to help accelerate investment… and encourage private sector participation on a large scale.”
In its paper, Assocham highlighted various issues — dearth of land availability and inadequate power supply for new industries; poor transport infrastructure; failure to attract new private investors; struggling traditional and core industries; and finance-related problems for small, medium enterprises.
It suggested development of a state-specific land acquisition and rehabilitation policy with options of equity partnership for land providers, employment opportunities, and stable monthly income, among others.
Kerala’s industrial sector performance in the past few years painted a grim picture as industry’s contribution to the state’s economy declined from 22.5 per cent in 2004-05 to about 20 per cent in 2013-14.
Even the workforce dependant on the industrial sector declined from about four per cent to just over two per cent during this period, akin to the national trend from 4.2 in 2001 to 3.8 in 2011.
Assocham also suggested incentives to be given to companies willing to set up operations in backward, underdeveloped areas and ones that face acute power shortage.
It said such companies should be offered subsidies, incentives and the infrastructure-based companies should be included in special category for tax concessions.
Another suggestion that was put forward was to promote use of renewable sources of power and energy-saving equipment, and improving broadband connectivity in far-flung and rural areas.
It said the government should ascertain the reasons for the fall in agricultural growth and address the factors responsible.
Considering migrant workers’ role in reducing growing labour shortage in Kerala, Assocham said the state should provide them basic facilities to help them live a dignified life.