- Economic Review is presented to the Kerala Legislative Assembly by the state government ahead of the Budget for the ensuing year. Economic Review reflects the present picture of Kerala economy. It is prepared by Kerala State Planning Board.
- Economic review 2018 has been tabled in the Kerala State Assembly on 31st January 2019 on the eve of the 2019-20 Budget presentation.
- According to the Economic review, Kerala’s Gross State Domestic Product (GSDP) has increased from 6.22% in 2016-17 to 7.18 % in 2017-18 (The national GDP growth rate was 6.68 % during 2017-18).
- The revenue deficit of Kerala has been reduced to 2.46% in 2017-18 from 2.51 in 2016-17.
- The fiscal deficit too came down to 3.91% in 2017-18 from 4.29% in 2016-17.
- The per capita GSDP in 2017-18 stands at Rs 1,48,927 as against Rs 1,39,645 in the previous financial year. This is very high comparing to national per capita income of Rs. 87,783.
- Ernakulam ranks first in per capita income (Rs.1,66,996), followed by Kollam (Rs.1,58,109) and Alappuzha (1,53,982). Malappuram has lowest per capita income (Rs. 97,836).
Courtesy: The Hindu
- The growth of Kerala’s manufacturing sector was 9.2% in 2017-18, according to the Economic Review 2018. The corresponding figure was 7.8% in 2016-17.
- 14 Public Sector Undertakings (PSUs) under the Industries Department reported profits in 2017-18 as against 13 in 2016-17. The total profits made by the profit-making PSUs increased from Rs 88.4 crore in 2016-17 to Rs 303.7 crore in 2017-18.
- Major profit making units were:
- Kerala Minerals and Metals Limited (Rs 195.8 crore)
- Kerala State Industrial Development Corporation (Rs 36.2 crore)
- Travancore Cochin Chemicals Ltd (Rs 33.2 crore) Travancore Titanium Products (Rs 18.8 crore)
- 15,468 new Micro Small and Medium Enterprises (MSME) units started operations in Kerala with a total investment of Rs.1,24,961 lakh, generating employment for 51,244 persons.
- The agricultural sector recorded the highest growth. It grew from 0.02% in 2016-17 to 3.64% in 2017-18. This too exceeded the national average of 3.37%.
- The rice production has been increased by 19% comparing to 2015-16.
- The production of pepper grew 11.4% to reach 37,995 tonnes.
- From 2007 onwards, the production cost of farmers is higher that the income generated by them.
- There was a decline of 2.8 percent in coconut production during 2017-18 over 2016-17.
- As per the Coconut Development Board statistics during 2016-17, among the four major coconut producing states in the country, Kerala stands first with respect to area and production. But in productivity it is fourth next to Tamil Nadu, Karnataka and Andhra Pradesh.
- The increased agricultural cost, transportation cost, wage raise, price fall of crops etc. are some of the causes of farmer distress.
- The rainfall during the winter period of January – February 2018 was deficient with a departure of -30 percent from the normal.
- The agriculture sector was hit by the extreme rainfall of July-August 2018. The crop loss subsequent to the floods is estimated at Rs 3,558 crore.
NON RESIDENT KERALITES
- While there was a decline in the flow of emigrants from the State in 2018, the number of return emigrants was on the rise.
- According to the Economic Review, 2018, the number of Non-Resident Keralites has been estimated at 34.17 lakh in 2018, as per the Kerala Migration Survey, 2018.
- The survey records a decrease from the 36.5 lakh in 2014. The number of emigrants declined from 24 lakh to 21.2 lakh, but that of the return emigrants grew from 11.5 lakh in 2008 to 12.94 lakh in 2018.
- The highest number of return emigrants is from Malappuram, followed by Thiruvananthapuram and Kottayam.
REVENUE GENERATED FROM VARIOUS SECTORS
- The total NRI deposit in Kerala is Rs 1,68,993 crore as on March 2018.
- The inflow of NRI deposits increased 11.5 per cent from Rs 1,52,349 crore in March 2017 to Rs 1,69,944 crore in March 2018.
- The NRI deposits in public sector banks is Rs 90,461 crore and in private sector banks Rs 78,532 crore
- Domestic deposits grew 7 per cent in March 2018 to Rs 2,75,457 crore from Rs 2,58,143 crore in March 2017.
- With 56.23 per cent share of NRI deposits, Federal Bank remains in the first position among the public and private sector banks.
- The percentage share of the NRI deposit in public sector banks is 35.6 per cent and 45.07 per cent is in private sector banks. Among public sector commercial banks, State Bank of India has the highest NRI deposit base of Rs 54,573 crore.
- The participation of woman in Kerala’s work force is only 30.81%. It is better than the national average of 23.7%, but behind other south Indian states such as Andhra Pradesh (46.6%), Tamil Nadu (39.2%) and Karnataka (32.75%)
- The average daily income for a man engaged in agricultural work in rural Kerala is Rs. 689.93, while that of a woman is only Rs. 477.5.
- The daily salary or stable income earned by a man in rural area is Rs. 368.44 while woman earns only Rs. 240.45.
- As a state having highest woman literacy, Kerala should immediately address this issue.
UNEMPLOYMENT IN KERALA
- The economic review report has pointed out that job creation has been a matter of serious concern in the state.
- The Survey conducted by Ministry of Labour in 2015-16 revealed that Kerala has largest unemployment in India. The unemployment rate of Kerala is 12.5%, which is two times larger than national average (5%).
- But the number of job-seekers registered in Employment exchanges has been reduced from 44.99 lakh in 2012 to 38.75 lakh in 2018. Women account for 62% of this.
- Fiscal Consolidation refers to the policies undertaken by Governments to reduce their deficits and debts. This is done either by generating more revenue or reducing the expenditure.
- The Central Government has recommended debt-GDP ratio of 20 per cent and fiscal deficit ratio of 1.7 per cent for states. But this would impede Kerala’s development and capital expenditure plans, especially after the floods in 2018.
- After the 2018 floods, rebuilding the State is the most important priority. The annual deficit targets need to be relaxed at least for a year.
- The debt liability of state is 30.68 % of State GDP, compared to 30.25% in 2016-17.
- Borrowings and liabilities as a proportion of revenue receipts, an indicator of debt stress, has been coming down steadily from 2011-12 to 2018-19. This indicates a trend towards sustainability.
- Kerala is moving towards fiscal consolidation without retreating from social and infrastructural spending that are essential for economic growth.
FOCUS ON REBUILDING KERALA
- Demonetisation, problems related to sharing of revenue under the GST regime, and changes in the GST rates had negatively impacted the economy of state.
- Natural calamities such as Cyclone Ockhi and the 2018 August floods have added to the burden of the State, both in terms of revenue mobilisation and expenditure.
- The full impact of floods and landslides on economic growth will be revealed only in coming months.
- The Economic Review 2018 presented in the State Assembly said the ‘theme chapter’ is about building a new Kerala in the aftermath of last year’s devastating floods.
- The government has taken this crisis as a challenge and laid out a vision for a more climate-resilient and progressive State on the basis of science and people’s participation.
- Modern science and technology should be employed in all stages of the process of dealing with natural disasters – from early warning systems, relief operations, design and construction of buildings and community infrastructure, individual care and livelihood enhancement measures.
(Courtesy: The New Indian Express, The Hindu, Hindu Business Line, Times of India and Deccan Chronicle)