THIRUVANANTHAPURAM: Keralam has no dearth of big private investment announcements. But, most never materialise, a new report says. New private investment projects worth Rs 46,981 crore were announced in the state over the five years up to FY2026.
Over the same period, proposals worth Rs 43,421 crore, including those declared earlier, were dropped, according to a report by the Gulati Institute of Finance and Taxation (GIFT).
Drawing on the Centre for Monitoring Indian Economy’s (CMIE) capex database, the report -- titled ‘Private Investment in Kerala: Completing the Diaspora Bargain’ — authored by Akhil M P and Geetharani V said only Rs 6,101 crore worth of projects were actually completed over the five-year period. This was barely 1.2% of the state’s average outstanding pipeline of around RS 98,000 crore a year. The number of live projects fell from 212 in FY2022 to 185 in FY2026.
“The state’s problem is not in drawing announcements, though it needs far more of that, too. It is realising the announcements already made,” the authors said. The key bottlenecks, according to them, include land acquisition, clearance delays and weak post-approval support.
The report also exposed a regional gap. Keralam’s share of the combined private investment pipeline across five southern states almost halved over the five years, from 4.2% in FY2022 to 2.2% in FY2026. The state’s own pipeline was almost flat during the period. While every resident of Andhra Pradesh is backed by Rs 3.66 lakh of pipeline investment, a resident in Keralam has only Rs 28,112.
On the other hand, state government’s investment pipeline is now 5.6 times the size of its private pipeline. It grew from Rs 89,096 per capita in FY2022 to Rs 1.57 lakh in FY2026. Keralam also had highest state-led investment proportion among the five states.
Report calls for better usage of diaspora wealth
The report called for better utilisation of Keralam’s diaspora wealth. It cited the case of China, where its diaspora accounted for over 70% of foreign investment in the early 1990s before global capital started flowing in. The state’s diaspora sends home about Rs 60,000 per resident a year, as per the Kerala Migration Survey 2023.
That is more than 20 times the new investment coming to the state a year, roughly `2,600 per capita. It called for effective ways to turn diaspora money into actual investment.