Kerala rises in reforms, but ground reality lags
Kerala's achievement in improving the investment climate is laudable, considering it was long seen as business-unfriendly. Yet, the state has much to do to catch up with other truly business-friendly states. Kerala’s sustained efforts to enhance its ease of doing business (EoDB) profile are reflected in its billing as a ‘top achiever’ in the latest rankings. For reforms to yield lasting, practical change, they must be applied fully and institutionalised at all levels of governance.
Kerala has emerged as a top performer among the fast-moving states in the latest ease of doing business rankings. It completed an impressive 99.3 percent of the Business Reforms Action Plan for 2024 and advanced stronger digital governance. The evaluation placed the right emphasis where it matters—30 per cent on completing reforms and a much larger 70 percent on investor feedback—giving a clearer picture of what businesses actually experience on the ground.
Kerala’s high score is the direct result of institutionalising platforms such as K-SWIFT for single-window clearances, streamlining licences and permits, and delivering critical improvements in electricity and water provision, and in business registration. These measures nurture existing businesses and attract new investment.
However, the state must eliminate the persistent hurdles hindering its full business potential. Projects like the Elappully (Palakkad) brewery, where the government’s approval is being stalled by the grama panchayat, and the Fresh Cut poultry waste plant (Kozhikode), which was raided and set afire by those opposing its operation, demonstrate that state-level clearances are often negated by local political opposition and violent citizen action, reflecting a deep-seated public mindset against industry.
Kerala’s high wages and its long history of aggressive labour union activity still make large, labour-intensive industries think twice before setting up shop. Local pressures should not be allowed to derail decisions taken at the executive level, and the state needs to offer businesses a sense of stability and predictability. That means building public support, enforcing regulations clearly, and ensuring local bodies fall in line. The government has to lead the push for compliance, remain in active dialogue with interest groups, and establish a robust grievance-redressal system to settle disputes quickly. Only then can Kerala create a steady, welcoming climate for industry.