Economy of Kerala

Economy of Kerala
Aerial view of Cochin Shipyard
CurrencyIndian Rupee ₹
1 April – 31 March
Statistics
GDP₹11.6 lakh crore (US$140 billion) (2023-24 est.)[1]
GDP rank11th
GDP growth
6.6% (2022–23)[1]
GDP per capita
₹281,001 (US$3,400) (2023–24)[1]
GDP per capita rank
8th
GDP by sector
Agriculture 12%
Industry 23%
Services 66% (2021-22)[2]
Population below poverty line
Positive decrease 0.71% in poverty (2015–16)[3]
Decrease 0.752 high (2021) (1st)
UnemploymentPositive decrease 5.8%(May 2022)[4]
Main industries
Shipping, IT, Tea manufacturing Tourism, fishing and Retail etc.
Public finances
36.9% of GSDP (2023–24 est.)[1]
₹−39,662 crore (US$−4.8 billion) (3.5% of GSDP) (2023–24 est.)[2]
Revenues₹1.36 lakh crore (US$16 billion) (2023–24 est.)[2]
Expenses₹1.76 lakh crore (US$21 billion) (2023–24 est.)[1]
All values, unless otherwise stated, are in US dollars.

The economy of Kerala is the 9th largest in India, with an annual gross state product (GSP) of ₹9.78 lakh crore (US$131.98 billion) in 2020–2021.[2] Per-capita GSP of Kerala during the same period is ₹257,711 (US$3,100), the sixth largest in India.[1] In 2019–20, the tertiary sector contributed around 63% of the state's GSVA, compared to 28% by secondary sector, and 8% by primary sector.[5]

Kerala's high GDP and productivity figures with higher development figures is often dubbed the "Kerala Phenomenon" or the "Kerala Model" of development by economists, political scientists, and sociologists. This phenomenon arises mainly from Kerala's land reforms, social upliftment of entire communities initiated from the first democratic government of Kerala led by E. M. S. Namboodiripad and subsequently implemented by various governments ruled the state.[6] Kerala's economy is based on a social democratic welfare state.[7] Some, such as Financial Express, use the term "Money Order Economy".[8] Kerala is the second-most urbanised major state in the country with 47.7% urban population according to the 2011 Census of India, and has tried to maintain a pan-state economy rather than concentrating in some selected cities to develop.[9] Kerala is the second-least impoverished state in India according to the Annual Report of Reserve Bank of India published in 2013, only behind Goa.[10][11]

Kerala, which accounts for 2.8% of India's population and 1.2% of its land area, contributes more than 4% to the GDP of India. Thus, the southern state's per capita income is 60% higher than India's average. This has fuelled internal migration to Kerala for low-end jobs, even as Keralites have emigrated—mostly to the Gulf countries—in search of better-paying jobs. Around 3,000,000 Keralites are working abroad, mainly in Persian Gulf; to where migration started with the Gulf Boom. The Kerala Economy is therefore largely dependent on trade in services and resulted remittances.[12][13][14] In 2012, the state was the highest receiver of overall remittances to India which stood at Rs. 49,965 Crore (31.2% of the State's GDP), followed by Punjab and Uttar Pradesh.[15] The Migrant labourers in Kerala are a significant workforce in industrial and agricultural sectors of state. Kerala's economy was gradually shifting from an agrarian economy into a service-based one during the period between 1960 and 2020.

With 12.5% of the labour force unemployed in 2016, Kerala sank from being the 11th in unemployment in India in the year before to being 3rd in the country.[16] The 'Report on Fifth Annual Employment - Unemployment Survey for 2015-16' prepared by the Labour Bureau of the Union ministry of Labour and Employment indicates that Tripura had the highest unemployment rate of 19.7% in India, followed by Sikkim (18.1%) and Kerala (12.5%). In 2020 with unemployment rate around 5%, Kerala has managed to turn its fate around despite the COVID-19 pandemic affecting all sectors of the economy.[4] The state's poverty rate is exceptionally lowest in the country at 0.71%; and it houses the Kottayam district which is the only one in the country with zero poor residents.[17]

  1. ^ a b c d e f "Kerala Budget Analysis 2023-24" (PDF). PRS Legislative Research. 7 February 2023. Retrieved 7 February 2023.
  2. ^ a b c d "Kerala Budget Analysis 2022-23". PRS Legislative Research. 11 March 2022. Retrieved 18 March 2022.
  3. ^ "Multidimensional Poverty Index, India". The Hindu. 26 November 2021.
  4. ^ a b "Unemployment Rate in India". Centre for Monitoring Indian Economy. p. 1. Retrieved 3 November 2020.
  5. ^ Economic Review 2020 - Volume I (PDF). Thiruvananthapuram: Kerala State Planning Board. 2021.
  6. ^ . 2 November 2013 https://web.archive.org/web/20131102151358/http://www.sas.upenn.edu/polisci/sites/www.sas.upenn.edu.polisci/files/Singh.Kerala.World%20Development.pdf. Archived from the original (PDF) on 2 November 2013. Retrieved 7 August 2020. {{cite web}}: Missing or empty |title= (help)
  7. ^ Heller, Patrick (18 April 2020). "A virus, social democracy, and dividends for Kerala". The Hindu. Retrieved 2 February 2021.
  8. ^ "Cashing out of the money order economy". 23 November 2007.
  9. ^ "Level of Urbanisation in Indian States". mohua.gov.in. Ministry of Housing and Urban Affairs, Government of India.
  10. ^ "Table 162, Number and Population Below Poverty Line". Reserve Bank of India, Government of India. 2013. Archived from the original on 2 June 2017.
  11. ^ "SDGs India Index". 31 December 2019.
  12. ^ Deparle, Jason (7 September 2007). "Jobs Abroad Support 'Model' State in India". The New York Times. Retrieved 1 May 2010.
  13. ^ K.P. Kannan, K.S. Hari (2002). "Kerala's Gulf connection: Emigration, remittances and their macroeconomic impact 1972-2000". Centre for Development Studies, Trivendrum Working Papers.
  14. ^ S Irudaya Rajan, K.C. Zachariah (2007). "Remittances and its impact on the Kerala Economy and Society" (PDF). Archived from the original (PDF) on 25 February 2009. Retrieved 2 January 2009.
  15. ^ "NRIs beat FDI, keep the money coming". Hindustan Times. 8 October 2012. Archived from the original on 13 March 2014. Retrieved 9 July 2014.
  16. ^ "Indian Economy at a Glance [Infographic] - Quickonomics". Quickonomics. 12 September 2015. Retrieved 19 November 2016.
  17. ^ "Kottayam Only District With Zero Poverty: NITI Aayog's Poverty Index Report". news.abplive.com. 27 November 2021. Retrieved 8 February 2022. In the overall index, Kerala recorded the least 0.71% of poverty followed by Goa (3.76%), Sikkim (3.82%) and Tamil Nadu (4.89%).