Kerala has posted a growth rate of 8.2% for 2012-13, and though the state was among the country?s fastest-growing regions for two consecutive years, its growth has showed only a wafer-thin increase of 0.2% over the previous fiscal.
In fact, the pre-Budget Economic Review-2013, brought out by Kerala State Planning Board, admits ?there is little room for optimism regarding the state’s growth prospects in the short run,? in view of the ?subdued growth at the global and national levels?.
Planners are also worried about negative factors such as ?high inequality between regions and communities within Kerala and lack of adequate land, labour, and quality infrastructure continue to be a problem, giving rise to social tensions, inflationary trends, and rampant unemployment,” according to Economic Review-2013.
?What is most bothersome is the level of unemployment in the state at 7.4 % as against the national average of 2.3 %,? the state?s finance minister KM Mani told FE. Equally worrying is the lower participation of women in the workforce, he said. The total number of unemployed women in Kerala stood at 23.86 lakh, a whopping 60% of the total unemployed. At 18%, growth rate (at constant prices) was the highest in the secondary sector against 4% in the primary sector and 5.46 % in the tertiary sector.
Kerala?s relatively high growth rate is propelled mainly by the construction sector boom. Thanks to the depreciation of the rupee, NRI remittances to Kerala have risen from R48,454 crore to R66,190 crore. ?The increase in remittances from the Gulf, where about 20 million expats from the state work, is usually a stimulant in the real estate sector. And this has been a gamechanger,” SN Raghu-chandran Nair, chairman, state unit of CREDAI (Confederation of Real Estate Developers Association of India), says.
Social sector credit availability has also picked up in tune with the growth of NRI remittances. Priority sector lending of banks in the State has revved up to 56.72 % of total advances. The increase in housing and educational loans has been 15 % each.
The estimated debt of the state will be R1,14,121.38 crore at the end of the current fiscal (2013-14), up from the R1,03,580.84 crore in 2012-13.
The growth in debt has risen from 13.66 % to 15.8%. Though ?not debt-stressed?, the state?s finances were not enough to provide relief to all those sections of society that needed welfare measures, says the Economic Review.
