Economy of Kerala
Encyclopedia
CultureCulture of KeralaThe culture of Kerala is a synthesis of Dravidian and Aryan cultures, developed and mixed for centuries, under influences from other parts of India and abroad. It is defined by its antiquity and the organic continuity sustained by the Malayali people. Modern Kerala society took shape owing to...
| Economy | GeographyGeography of KeralaKerala’s 38,863 km² are wedged between the Arabian Sea to the west and the Western Ghats to the east. Kerala’s coast runs some 580 km in length, while the state itself varies between 35–120 km in width. Geographically, Kerala roughly divides into three climatically distinct regions...
| HistoryHistory of KeralaThe history of Kerala goes back more than several millennia. Stone age carving in Edakkal Caves had pictorial writings believed to be dating to at least 5000 BC, from the Neolithic man, indicating the presence of a prehistoric civilization or settlement in this region. From as early as 3000 BC,...
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PeopleMalayaliMalayali is the term used to refer to the native speakers of Malayalam, originating from the Indian state of Kerala...
| Politics | Society
Service industry dominates the Kerala
Kerala
or Keralam is an Indian state located on the Malabar coast of south-west India. It was created on 1 November 1956 by the States Reorganisation Act by combining various Malayalam speaking regions....
economy http://www.pppinindia.com/states_kerala_state.asp. Kerala leads many other India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
n states and territories in terms of per capita GDP (74,620 INR
Indian rupee
The Indian rupee is the official currency of the Republic of India. The issuance of the currency is controlled by the Reserve Bank of India....
States of India by size of economy
States of India by size of economy
This page lists Indian states and major cities by their nominal gross domestic product . It also displays each state's level of annual GDP growth, as recorded between 1999 and 2007, and the level of growth in GDP per capita, as recorded between 2004 and 2011.-List of states:This is a list of states...
) and economic productivity and Kerala's Human Development Index
Human Development Index
The Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries...
is the best in India.kerala's Human development index comparable to first world nations which is close to europe. HDI OF 0.920(classified as "VERY HIGH"),thus making kerala a socially developed state in a economically developing world. According to the Global Hunger Index 2008, the severity of hunger situation in Kerala is "serious", which is better than the grade "alarming" received by many Indian states. Kerala's low GDP and productivity figures juxtaposed with higher development figures than in most Indian states — is often dubbed the "Kerala Phenomenon
Kerala model
The Kerala model based on the development experience of the southern Indian state of Kerala, refers to the state's achievement of significant improvements in material conditions of living, reflected in indicators of social development that are comparable to that of many developed countries, even...
" or the "Kerala Model
Kerala model
The Kerala model based on the development experience of the southern Indian state of Kerala, refers to the state's achievement of significant improvements in material conditions of living, reflected in indicators of social development that are comparable to that of many developed countries, even...
" of development by economists, political scientists, and sociologists. This phenomenon arises mainly from Kerala's unusually strong service sector. Some describe Kerala's economy as a "democratic socialist
Democratic socialism
Democratic socialism is a description used by various socialist movements and organizations to emphasize the democratic character of their political orientation...
welfare state
Welfare state
A welfare state is a "concept of government in which the state plays a key role in the protection and promotion of the economic and social well-being of its citizens. It is based on the principles of equality of opportunity, equitable distribution of wealth, and public responsibility for those...
". Some, such as Financial Express, use the term "Money Order Economy". Kerala's economic progress is above the national average. But relatively few major corporations and manufacturing plants are headquartered in Kerala.
Recent Census 2011 shows kerala's HDI of 0.920 which is greater than that of China,Russia & many developing world.
Around 30 lakh Keralites are working abroad mainly in Persian Gulf
Persian Gulf
The Persian Gulf, in Southwest Asia, is an extension of the Indian Ocean located between Iran and the Arabian Peninsula.The Persian Gulf was the focus of the 1980–1988 Iran-Iraq War, in which each side attacked the other's oil tankers...
; migration to where started with the Kerala Gulf boom
Kerala Gulf boom
The Kerala Gulf diaspora refers to the people of Kerala living in the Middle eastern Arab states of the Persian Gulf. They number more than 2.5 million as of 2008.- The Gulf Boom :...
. So the Kerala Economy is largely dependent on remittances
Remittances
A remittance is a transfer of money by a foreign worker to his or her home country. Note that in 19th century usage a remittance man was someone exiled overseas and sent an allowance on condition that he not return home....
. S. Irudaya Rajan describes the situation as "Remittances from global capitalism are carrying the whole Kerala economy". Unemployment recently dropped from a large 19.1% in 2003 to 9.4% in 2007 & only 4.2% in 2011 . Underemployment
Underemployment
Underemployment refers to an employment situation that is insufficient in some important way for the worker, relative to a standard. Examples include holding a part-time job despite desiring full-time work, and overqualification, where the employee has education, experience, or skills beyond the...
, low employability of youths, and a 13.5% female participation rate
Labor force
In economics, a labor force or labour force is a region's combined civilian workforce, including both the employed and unemployed.Normally, the labor force of a country consists of everyone of working age In economics, a labor force or labour force is a region's combined civilian workforce,...
are chronic issues. One concern is that Kerala government is running some of the highest deficits in India.
Macro-economic trend
This is a chart of trend of gross state domestic product of Kerala at market prices estimated by Ministry of Statistics and Programme Implementation with figures in millions of Indian Rupees.| Year | Gross State Domestic Product |
|---|---|
| 1980 | 42,860 |
| 1985 | 75,200 |
| 1990 | 140,980 |
| 1995 | 387,620 |
| 2000 | 697,920 |
| 2005 | 1,025,080 |
The state's debt was estimated at 56 per cent of GDP in 2005.
Agriculture
Black pepper
Black pepper is a flowering vine in the family Piperaceae, cultivated for its fruit, which is usually dried and used as a spice and seasoning. The fruit, known as a peppercorn when dried, is approximately in diameter, dark red when fully mature, and, like all drupes, contains a single seed...
and accounts for 85% out of the area under natural rubber in the country. Coconut
Coconut
The coconut palm, Cocos nucifera, is a member of the family Arecaceae . It is the only accepted species in the genus Cocos. The term coconut can refer to the entire coconut palm, the seed, or the fruit, which is not a botanical nut. The spelling cocoanut is an old-fashioned form of the word...
, tea
Tea
Tea is an aromatic beverage prepared by adding cured leaves of the Camellia sinensis plant to hot water. The term also refers to the plant itself. After water, tea is the most widely consumed beverage in the world...
, coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
, cashew
Cashew
The cashew is a tree in the family Anacardiaceae. Its English name derives from the Portuguese name for the fruit of the cashew tree, caju, which in turn derives from the indigenous Tupi name, acajú. It is now widely grown in tropical climates for its cashew nuts and cashew apples.-Etymology:The...
, and spices — including cardamom
Cardamom
Cardamom refers to several plants of the genera Elettaria and Amomum in the ginger family Zingiberaceae. Both genera are native to India and Bhutan; they are recognised by their small seed pod, triangular in cross-section and spindle-shaped, with a thin papery outer shell and small black seeds...
, vanilla
Vanilla
Vanilla is a flavoring derived from orchids of the genus Vanilla, primarily from the Mexican species, Flat-leaved Vanilla . The word vanilla derives from the Spanish word "", little pod...
, cinnamon
Cinnamon
Cinnamon is a spice obtained from the inner bark of several trees from the genus Cinnamomum that is used in both sweet and savoury foods...
, and nutmeg
Nutmeg
The nutmeg tree is any of several species of trees in genus Myristica. The most important commercial species is Myristica fragrans, an evergreen tree indigenous to the Banda Islands in the Moluccas of Indonesia...
— comprise a critical agricultural sector. A key agricultural staple is rice, with some six hundred varieties grown in Kerala's extensive paddy fields. Nevertheless, home gardens
Home gardens
Home gardens, also known as forest gardens, are found in humid areas. They use inter-cropping to cultivate trees, crops, and livestock on the same land...
comprise a significant portion of the agricultural sector. Related animal husbandry
Animal husbandry
Animal husbandry is the agricultural practice of breeding and raising livestock.- History :Animal husbandry has been practiced for thousands of years, since the first domestication of animals....
is also important, and is touted by proponents as a means of alleviating rural poverty and unemployment among women, the marginalized, and the landless. Feeding, milking, breeding, management, health care, and concomitant micro-enterprises all provide work for around 32 lakh
Lakh
A lakh is a unit in the Indian numbering system equal to one hundred thousand . It is widely used both in official and other contexts in Pakistan, Bangladesh, India, Maldives, Nepal, Sri Lanka, Myanmar and is often used in Indian English.-Usage:...
(3.2 million) of Kerala's 55 lakh (5.5 million) households. The state government seeks to promote such activity via educational campaigns and the development of new cattle breeds such as the "Sunandini".
Alcohol
Ironically one of Kerala's major social problems is also a huge revenue earner for the state. Kerala consumes more alcohol than any other state in India. The state government holds a monopoly over liquor sale in the state, after the state banned foreign liquor shops, through the government owned Kerala State Beverages Corporation (KSBC)Kerala State Beverages (M&M) Corporation Ltd
Kerala State Beverages Corporation Ltd is a public sector company owned by the Government of Kerala, which has a monopoly over wholesale and retail vending of alcohol in Kerala...
. Every year, liquor and beer sales have been rising and the total sales of liquor and beer during 2010-11 fiscal year is expected to be about Rs. 6,700 crore.
The government applies the highest state tax in the country on liquor (around 150%). This earns it high revenues. Total revenue by way of taxes on the sale of liquor and beer was Rs.5,539 crore in 2009-10.
Rum
Rum
Rum is a distilled alcoholic beverage made from sugarcane by-products such as molasses, or directly from sugarcane juice, by a process of fermentation and distillation. The distillate, a clear liquid, is then usually aged in oak barrels...
is the favorite alcohol beverage for Kerailites followed by Brandy
Brandy
Brandy is a spirit produced by distilling wine. Brandy generally contains 35%–60% alcohol by volume and is typically taken as an after-dinner drink...
.
Tourism
Kerala is an established tourist destination for both Indians and non-Indians alike. Tourists mostly visit such attractions as the beaches at Kovalam
Kovalam
Kovalam is a beach town on the Arabian Sea in Thiruvananthapuram city, Kerala, India. It is located around 13 km from the down town of Trivandrum.-Etymology:...
, Cherai
Cherai
Cherai is a region in the island of Vypin, a suburb of the city of Kochi, in the state of Kerala, India. It is at a distance of about 25km from the High Court Junction, Kochi. Cherai has the longest beach in Kochi - the Cherai beach. The beach is located towards the centre-north of the Vypin...
and Varkala
Varkala
Varkala is a coastal town and municipality in Thiruvananthapuram district situated in the Indian state of Kerala. It is located 50 kilometres north-west of Thiruvananthapuram and 37 km south-west of Kollam city.Varkala is the only place in southern Kerala where cliffs are found adjacent to...
, the hill station
Hill station
A hill station is a town located at a higher elevation than the nearby plain or valley. The term was used mostly in colonial Asia , but also in Africa , for towns founded by European colonial rulers as refuges from the summer heat, up where temperatures are cooler...
s of Munnar
Munnar
Munnar is one of the most popular hill station in Kerala and in southern India. Munnar is located on the Western Ghats, situated in the Idukki district....
, Nelliampathi
Nelliampathi
Nelliampathi is a popular hill station 60 km away from Palakkad in Kerala, a small state in south India. It is surrounded by tea and coffee plantations and has excellent weather conditions. The journey to Nelliampathi itself is an experience. The only route is from Nemmara, from where the...
, and Ponmudi
Ponmudi
Ponmudi is a hillstation in the Thiruvananthapuram district of Kerala in South India. Its located 61 km north-east of Trivandrum city at an altitude of 1100 m. It is a part of the Western Ghats mountain range that runs parallel to the Arabian Sea.-Tourism:Ponmudi is connected to...
, and national parks and wildlife sanctuaries such as Periyar
Thekkady
Thekkady is the location of the Periyar National Park, which is an important tourist attraction in the Kerala state of India.- Overview :...
and Eravikulam National Park
Eravikulam National Park
Eravikulam National Park is a 97 km² national park located along the Western Ghats in the Idukki district of Kerala in India, between 10º05'N - 10º20'N latitude and 77º0'E - 77º10'E longitude...
. The "backwaters" region — an extensive network of interlocking rivers, lakes, and canals that center on Alleppey, Kumarakom
Kumarakom
Kumarakom is a popular tourism destination located near the city of Kottayam , in Kerala, India, famous for its backwater tourism. It is set in the backdrop of the Vembanad Lake which is the largest freshwater lake in the state of Kerala.-Environment:...
, and Punnamada — also see heavy tourist traffic. Examples of Keralite architecture, such as the Padmanabhapuram Palace
Padmanabhapuram Palace
Padmanabhapuram Palace complex is located in at Padmanabhapuram Fort, close to the town of Thuckalay in Kanyakumari District, Tamilnadu, in India. It is about 20 km from Nagercoil, and about 50 kilometers from Thiruvananthapuram, Kerala. The palace complex is inside an old granite...
, Padmanabhapuram
Padmanabhapuram
Padmanabhapuram a city and a municipality near Thuckalay in Kanniyakumari district in the Indian state of Tamil Nadu.-History:Padmanabhapuram was the old capital of the princely state of Travancore in India...
, are also visited. The capital city Thiruvananthapuram
Thiruvananthapuram
Thiruvananthapuram , formerly known as Trivandrum, is the capital of the Indian state of Kerala and the headquarters of the Thiruvananthapuram District. It is located on the west coast of India near the extreme south of the mainland...
, Kochi
Kochi
-Places:* Kochi, a city in the state of Kerala, India, formerly known as Cochin* Kingdom of Cochin, a former feudal city-state on Malabar Coast, India** Fort Kochi, one of the three main urban components which constitute the present day city of Kochi, Kerala, India...
(called as the "Queen of the Arabian Sea"), and Alappuzha
Alappuzha
Alappuzha , also known as Alleppey, is a town in Alappuzha District of Kerala state of southern India. As per 2001 census Alleppey is the sixth largest city in Kerala with an urban population of 177,029. Alleppey is situated to the south of Kochi and north of Trivandrum...
(called the "Venice
Venice
Venice is a city in northern Italy which is renowned for the beauty of its setting, its architecture and its artworks. It is the capital of the Veneto region...
of the East"), are popular destinations. Tourism plays an important role in the state's economy.
BSEBSE- Medicine :* Bovine spongiform encephalopathy, a neurological disease commonly known as "mad cow disease"* Breast self-examination* Bone surface element- State Secondary Education Boards of India :*Board of Secondary Education, Assam...
listed KeralaKeralaor Keralam is an Indian state located on the Malabar coast of south-west India. It was created on 1 November 1956 by the States Reorganisation Act by combining various Malayalam speaking regions....
companies
- 1) Manappuram General Finance and Leasing LtdManappuram General Finance and Leasing LtdManappuram Finance Ltd or MFL is a non-banking financial company situated in Valapad, Thrissur, Kerala state. Manappuram has over 1,000 branches across 15 states, a staff strength of over 6,500 people and a customer base of over 5,000.-History:The company was founded in 1949 by late V.C....
- 2) Muthoot Capital Services Ltd
- 3) Federal BankFederal BankFederal Bank Limited is a major Indian commercial bank in the private sector, headquartered at Aluva, Kochi, Kerala. As of March 31 2011 it has 743 branches spread across 24 states in India and 803 ATMs around the country.-History:In the year 1931, Travancore Federal Bank was inaugurated at...
- 4) Dhanlaxmi Bank
- 5) South Indian Bank
- 5) ESAF Microfinance and InvestmentsESAF Microfinance and InvestmentsESAF Microfinance and Investments Ltd is a Non Banking Financial Company registered with Reserve Bank of India , situated in Thrissur city, of Kerala State in India. It is promoted by ESAF India.Registered in 1992, the company serves over 2,30,000.clients that lack access to formal financial...
- 6) Geojit BNP Paribas
- 7) Muthoot Finance
- 8) State Bank of TravancoreState Bank of TravancoreState Bank of Travancore , is a subsidiary of the State Bank Group and also has private share-holders. It is the premier bank of Kerala State, India, where it has 700 branches...
- 9) Harrisons Malayalam
- 10) Cochin Minerals and Rutile LimitedCochin Minerals and Rutile LimitedCochin Minerals and Rutile Limited is a publicly listed chemicals company based in Aluva, Kerala, India. The company was founded in 1989 by S.N. Sasidharan and Mathew M. Cherian with assistance from the Kerala State Industrial Development Corporation . The company is the only listed Indian...
- 11) Cochin Minerals and Rutile LimitedCochin Minerals and Rutile LimitedCochin Minerals and Rutile Limited is a publicly listed chemicals company based in Aluva, Kerala, India. The company was founded in 1989 by S.N. Sasidharan and Mathew M. Cherian with assistance from the Kerala State Industrial Development Corporation . The company is the only listed Indian...
- 12) Kerala Solvent Extractions Ltd
- 13) GTN Textiles Limited
- 14) Kitex Garments
- 15) Nitta Gelatin India Ltd
- 16) Eastern Traders
- 17) Rubfila International
- 18) Kerala Ayurveda Ltd
- 19) Vertex Securities Ltd
- 20) V-Guard Industries Ltd
- 21) Sree Sakthi Paper Mills
- 22) AVT Natural Products
- 23) Accel Transmatic Limited
Foreign Remittances
In a state of 32 million where unemployment approaches 20 percent, one out of six employed Keralite now works overseas. As of 2008, the Gulf countries altogether have a Keralite population of more than 2.5 million, who send home annually a sum of USD 6.81 billion, which is more than 15.13% of Remittance to India in 2008. The largest number work in construction, although high literacy allows Keralites to secure office work. Foreign remittances augment the state’s economic output by nearly 25 percent. Migrants’ families are three times as likely as those of nonmigrants to live in superior housing, and about twice as likely to have telephones, refrigerators and cars.Infrastructure
Kerala has 145,704 km of roads (4.2% of India's total). This translates into about 4.62 km of road per thousand population, compared to an all-India average of 2.59 km. Virtually all of Kerala's villages are connected by road. Traffic in Kerala has been growing at a rate of 10–11% every year, resulting in high traffic and pressure on the roads. Total road length in Kerala increased by 5% between 2003-2004. The road density in Kerala is nearly four times the national average, and is a reflection of Kerala's unique settlement patterns. India's national highway network includes a Kerala-wide total of 1,524 km, which is only 2.6% of the national total. There are eight designated national highways in the state. Upgrading and maintenance of 1,600 km of state highways and major district roads have been taken up under the Kerala State Transport Project (KSTP), which includes the GIS-based Road Information and Management Project (RIMS). Kerala ranks second nationwideStates of India by installed power capacity
This is a list of States and Union Territories of India by installed capacity of power utilities with generation mode break-up as of 31-03-11 by the Ministry of Power with figures in millions of watts ....
in diesel-based thermal electricity generation with national market share of over 21%.