The Hindu Business Line : An investor-friendly Kerala?

IF the Chief Minister, Mr A.K. Antony, is to be believed, Kerala is at last becoming an investor-friendly State and has changed considerably in the recent past.

Addressing a gathering of industrialists, traders and foreign delegates at the "Business to Business Meet 2004" in Kochi last weekend, he said the mindset of most Keralites had already undergone a change for the better. "The Government is concentrating on policy changes that will put the State on a progressive path. We are trying to develop development politics," he is reported to have said.

If sweeping generalisations could have changed the mindset of the Malayalees, this would have been it. But a spot check of ground realities reveals that nothing seems to have changed.

A quick perusal of the myriad local dailies or a rapid surfing through the Malayalam television channels reveals that industries and industrialists continue to be treated shabbily by the State's political elite and the entrenched bureaucracy.

Familiar biases and positions only seem to have got more entrenched, with each community and interest group being served by one or more media outlets. And the incessant shenanigans of the State's politicians was further underlined when the Chief Minister he himself referred to attempts to thwart the State's development process - which have only pushed Keralites further into their petty little caves, seeking comfort in the familiar and conventional.

That, by definition, precludes the realm of entrepreneurship, which is the domain of the adventurous risk takers. Without a vibrant local entrepreneurial class, Kerala can hardly hope to label itself the haven for upcountry investors.

As proof, witness the recent uproar over moves by the State government to acquire land for the software development centre of a famous Bangalore-based IT major.

The only factually impeccable observation that the Chief Minister made at the Kochi B2B meet was that given Kerala's shortage of land, it was unrealistic to expect large industries to set up shop here. Yet, that did not prevent his Industries Ministry team from spending scarce resources in making presentations galore to upcountry and foreign automobile manufacturers - the latest to be wooed was Volvo - to come and start factories here.

Such inconsistencies could be forgiven if only the towns and cities of Kerala were abuzz with the newfound confidence of industrial resurgence. That, unfortunately, is not the material reality.

Little has changed since the 1980s when the State was seen to be grappling with exactly the same set of problems. The joke doing the rounds in places like Mumbai and Delhi then was that there was more Kerala business in the columns of newspapers and magazines than on the streets of the State.

Sadly, that could well be repeated today.

Even the business pages of local dailies are more conspicuous for their famished looks than for their exuberant coverage of Kerala's corporate and industrial sector.

The Kochi meet's focus on small and medium enterprises (SMEs) was, again, spot on, if rather trite, for it does not take a rocket scientist to deduce that the SME way is the apt one for Kerala.

Witness how the tourism industry in the State rode on the backs of SMEs as they ushered in the State's travel and leisure-related boom, which, of course, each successive State Government will now claim to have exclusively engineered.

Kerala is God's Own Country alright. Friendly? Certainly. Investor-friendly? Well...check out this column in two years or so for an answer - or a rephrased question.

The writer can be contacted at kg@tug.org.in

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