KOCHI: Kerala’s economic growth rate has fallen sharply to 6.6% in financial year 2022-23 from 12.97% a year earlier, according to latest numbers, in an indication of the unenviable task facing Finance Minister K N Balagopal, ahead of the budget on February 5, to boost economic activity.
Worse still, the latest number is lower than the pre-pandemic gross state domestic product (GSDP) growth of 7.37%, registered in 2018-19. During the pandemic years, the state’s GSDP slipped to 0.90% in 2019-20 and further to minus 8.43% in 2020-21.
“The lower growth rate in 2022-23 is mainly due to the high base effect of the previous year. We cannot compare the GSDP data of 2022-23 to a normal year because the previous year showed an abnormal growth rate from a low base,” said an official in the economics and statistics division.
He clarified that the 6.6% for 2022-23 is a quick estimate by the department and may undergo slight changes in the provisional data.
He explained that the provisional growth of 12.97% for 2021-22 was revised from the earlier estimate of 12.01%. The increase in the provisional number was due to higher growth in the tertiary sector, comprising services such as education, health, real estate activities, transport, etc.
The tertiary sector grew by 16.74% in 2021-22, as per final figures. However, 2022-23 saw a steep 6.21% decline in the sector.
The primary sector, which comprises agriculture, livestock, fishing and forestry, fell to an anaemic 1.45% in 2022-23 from 4.76% in 2021-22.
“The fact remains that Kerala has been a consumerist state for the last several years, and most of our agri-commodities come from outside. This reflects in the growth numbers as well,” said the official.
Only the secondary sector, comprising manufacturing, electricity, gas, water supply, other utility services and construction, grew from the previous year. As per data, the secondary sector gained 7.72% in 2022-23, compared with the previous year’s 7.26% jump. Of this, manufacturing posted a growth of 8.96% in 2022-23, down from 7.25% in 2021-22.
“Only when we sell the finished goods will it reflect in the data. We cannot depend on the number of startups for the manufacturing sector,” said another official, who also wished not to be named.
The biggest growth in the secondary sector was reported by the electricity, gas, water supply and other utility services, which clocked a growth of 12.5% in 2022-23. In his last budget speech, Balagopal said he expected the state GSDP to grow 10.8% in 2022-23, with the latest data suggesting that he may be way off the mark.
