The Hindu Business Line : Industrial growth remains tardy

Thiruvananthapuram March 25 Despite the continuing efforts to make the State investor-friendly, industrial growth in Kerala has remained tardy and much below the national average.

The industrial growth was even negative in 2001-02 at constant and current prices. Though there was a revival in the following two years, the growth turned negative yet again in 2004-05, but picked up in 2005-06.

According to the latest Economic Review by the State Planning Board, the average industrial growth rate for the period between 1999-2000 and 2005-06 was a meagre 1.54 per cent and from 2003-04 onwards 2.29 per cent. This was far below the national average of around 10 per cent.

Lagging in FDI

In respect of foreign direct investment also, Kerala has been lagging behind many other States in the country. From January 1999 to December 2005, the FDI approved for the State was Rs 1,217 crore in 184 projects, which constituted only 1.26 per cent of the total FDI approvals in the country.

There has been a positive growth on the export front except for coffee, cotton garments and piece goods. Export of tea increased by 12 per cent from Rs 370 crore in 2004-05 to Rs 415 crore in 2005-06 and software from Rs 650 crore to Rs 726 crore.

Some of the other items that recorded growth in exports in 2005-06 are: marine products (from Rs 1,158 crore to Rs 1,240 crore), spices (Rs 779 crore to Rs 862 crore), coir and coir products (Rs 405 crore to Rs 473 crore) and fruits and vegetables (Rs 395 crore to Rs 420 crore).

In 2005-06, out of the total Indian exports, Kerala's share in coir was 93 per cent, cashew kernels 65 per cent, spices 38 per cent, coffee 55 per cent, tea 26 per cent and marine products 17 per cent.

The number of industrial disputes pending slightly increased to 2,749 in 2005-06. While the number of disputes that led to strike during the year declined significantly, the number of workers affected by strike went up.

Mandays lost due to strike and lockout increased by 136 per cent in 2005-06 and this was because of seven days' strike in coir factories and nine days' strike in the plantation sector.

The central sector investment in the State stood at Rs 16,828 crore as on March 2005, representing 2.59 per cent of the total central investments in the country. This was 2.56 per cent in 2003-04.

Though the percentage increase in the total investments in the country was 8.79 per cent, it was a marginal increase of 0.03 per cent in the case of Kerala.

This increase was due to higher investments by Indian Oil Corporation, Hindustan Petroleum Corporation, BSNL, etc., which are not manufacturing companies.

More Stories on : Economy | Foreign Direct Investment | Kerala

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