The Hindu Business Line : Services sector a major contributor to Kerala economy: Survey

THE overall growth rate of the Kerala economy in 2002-03 was 6.1 per cent, with the services sector growing the fastest at 9.78 per cent, says the Kerala Economic Review 2003 released today by the State Planning Board.

Not surprisingly, the contribution of the services sector to the State's economy has grown from 61.7 per cent in 2001-02 to 63.8 per cent in 2002-03, the document adds.

In tune with these developments, the per capita income in the State grew from Rs 10,832 in 2001-02 to Rs 11,388 in 2002-03 keeping it marginally ahead of the national per capita income of Rs 11,010 in 2002-03.

The fortunes of Kerala's agricultural sector were mixed in 2002-03, as a result of poor rainfall and fluctuating prices. While the prices of products such as coconut, rubber and coffee moved upwards, those of products such as cardamom, pepper and tea dropped. Meanwhile, the State's farms are increasingly moving towards mixed crops, with many farmers opting to adopt organic cultivation techniques. In this context, an encouraging development was the growth in the export of marine products — 12 per cent in quantity terms and 10 per cent in value terms, the document adds.

Kerala's industrial sector showed a marginal improvement, recording a growth rate of 1.5 per cent, but traditional industries such as coir and cashew are still in bad shape, says the Economic Review 2003. However, new areas such as IT are showing tremendous promise, attracting an estimated investment of Rs 5,000 crore over the last four years, the document adds. The State's IT sector alone is estimated to employ over 80,000 people.

Similarly, tourism has proved to be a major driver of growth, with the State recording a 11.37 per cent growth in international tourist arrivals in 2002 while the country as a whole registered a drop of 6.92 per cent in international arrivals during this period. In 2003, the sector has registered a 30 per cent growth rate in international tourist arrivals.

Employment generation in the formal sector continues to be a cause for concern in Kerala, says the Economic Review 2003. The State's unemployment rate at 20.77 per cent continues to be among the highest in the country. This problem is aggravated by the widening gap between the skill-sets available in Kerala and those required by the market. Despite these drawbacks, the State has witnessed some encouraging trends in non-traditional employment avenues and also in areas such as self-employment.

The `Modernising Government Programme' is an important initiative aimed at improving the quality of service delivery, enhancing efficiency and reducing delays. This initiative is set to gain momentum over the course of this year, the document adds.