THIRUVANANTHAPURAM: Despite topping the national charts on various human-development indices, Kerala’s economy has been limping for some time now. A recent central bank report further cemented the condition that the state finds itself in.
In the Reserve Bank of India’s ‘Handbook of Statistics on Indian States 2023-24’, Kerala took the 30th spot — among select 33 states and Union territories (UTs) — in terms of economic growth over a five-year period.
Kerala’s average annual growth rate (AAGR) in gross state domestic product (GSDP, at constant prices) between 2018-19 and 2022-23 stood at 3.16%, with only Delhi (3.13%), Uttarakhand (2.16%) and Goa (0.70%) performing worse. Mizoram topped the chart with 6.75% growth, followed by Chhattisgarh (6.64%) and Gujarat (6.26%).
Major south Indian states also registered commendable growth during the period. While Karnataka’s economy grew by 5.62%, Telangana, Tamil Nadu and Andhra Pradesh posted 5.61%, 5.27% and 5.19% expansions, respectively.
The quick estimate for 2023-24 showed that Kerala’s GSDP improved to rs 6.35 lakh crore, posting a 6.52% year-on-year (YoY) growth, from the previous year’s Rs 5.96 lakh crore (+4.24% YoY). The handbook did not have data for all states/UTs for this year. Telangana’s growth rate was pegged at 9.24%, followed by Tamil Nadu (8.23%), Andhra Pradesh (7.35%), and Karnataka (6.60%).
“There are various factors behind Kerala’s slow growth rate,” economist Mary George said. “The state is yet to be industry-friendly in the true sense and hence big investments are limited. Kerala continues to grapple with militant trade unionism,” she said.
“The agriculture sector is facing a crisis due to price falls and human-wildlife conflicts. The drop in NRI remittances following the pandemic and outward remittances through migrant labourers have compounded the state’s woes,” Mary added.
‘Exponential increase in state’s expenditure on disaster relief’
The handbook showed that Kerala performed well in important social indicators like maternal mortality (MMR) and life expectancy. Kerala topped the chart in MMR with 19 deaths per one lakh births. At six deaths per 1,000, Kerala’s infant mortality rate was the fifth lowest in the country. The unemployment rate in rural Kerala was 76, fourth highest in the country. Unemployment in the urban areas saw a significant decline from 104 in 2019-20 to 67 in 2023-24, 19th position in the country.
The report also threw light on the exponential increase in state governments’ expenditure on relief following natural calamities. Kerala’s expenditure rose by 232% — from Rs 14,181 lakh in 2011-12 to Rs 47,060 lakh in 2023-24. At 3,13,376 lakh, the highest spending was in the flood-hit 2018-19.
In the state’s finance sector, Kerala’s own tax revenue saw a quantum jump in 2022-23, from Rs 58,341 crore in the previous year to Rs 70,189 crore. The budget estimate for 2023-24 is Rs 81,039. The state’s own non-tax revenue too rose from Rs 10,463 crore in 2021-22 to Rs 15,355 crore in 2022-23. The estimate for 2023-24 is Rs 17,089 crore.
Kerala had the fifth-highest pension expenditure in the country in 2023-24. The pension liability rose from Rs 26,689 crore in 2022-23 to Rs 28,240 crore in the current year.