Kerala has much to offer the world — banking to Public Private Partnership (PPP) and tourism to human capital.
The outstanding success of Kerala in social and human development indices is known across the world. But lesser known is the success of the State in the world of entrepreneurship and innovation.
For instance, Kerala was the pioneer in PPP for infrastructure development, long before the concept gained traction at the national level. The Cochin International Airport Ltd (CIAL) is one of the finest and most successful examples of PPP in the country. It holds the distinction of being the first-ever airport fully powered by solar energy, generating a remarkable 73 million units of clean and green energy on an annual basis. The airport stands as a testament to the boundless potential of innovation.
The State has also made some outstanding achievements in making the Ayurveda system of medicine a globally recognised brand. The success of gold retailers and gold loan companies is another good example of the innovative spirit of Keralites.
There is a growing trend of people from Kerala achieving remarkable heights in the global business arena and making significant investments in the State. The shopping mall culture is the most illustrative example of such investments. Similarly, Keralites at the forefront of cutting-edge knowledge economies in the U.S. and other advanced countries are looking seriously at setting up research and development facilities in their homeland. Going forward, this is likely to emerge as a major trend in Kerala.
When it comes to services-led growth, Kerala has shown the way to the rest of India. The much-acclaimed ‘Kerala Model’ of development stands to the test of time as the State economy has been growing at a faster clip than the national average.
State’s Finance Minister KN Balagopal said in the budget for FY24 that the Kerala economy “is projected to grow at a rate of 11.2 per cent in 2023-24 to ₹11.3 lakh crore over the previous fiscal”. This is compared to 6.5 per cent growth for the national economy by the RBI for FY24 fiscal.
A sizeable chunk of growth would come from the services sector, which covers a vast array of activities — education, health, key infrastructure, construction, financial services and the like.
According to official data, services or the tertiary sector accounts for around 63 per cent of the State’s Gross Value Added, while 28 per cent by the secondary or industrial sector and 8 per cent from the primary or agricultural sector. Of the services sector, a lion’s share is attributed to financial services which include commercial banks and non-banks.
Much before formal banking expanded its footprint in the rest of the country, Kerala was home to a dozen-odd banks. Their number shrank in the course of time as some bit the dust and some merged with others for varied reasons. The chief reason for the presence of dominant commercial lenders may be attributed to the very structure of the Kerala economy which has been dominated by two dominant segments; an over-sized State sector and a non-resident economy.
Both needed formal financial institutions to function smoothly while creating economic surplus for the State. In a way, both underscored the relevance of each other.
Kerala has also emerged as a much sought-after tourist destination, making it a global brand, thanks to its natural beauty, rich heritage, culture and culinary traditions. The State has been positioned as an all-weather destination for short duration as well as extended stays packed with excitement. Kerala’s trendsetting marketing campaigns have ensured top-of-the-mind brand recall as well.
Kerala has also been able to showcase itself by developing new products and highlighting its age-old traditions and organising eclectic and high-octane events, festivals and celebrations. The famed houseboats on the backwater and ayurvedic rejuvenation therapies during the monsoons have helped the tourism sector grow.
The success of Kerala Tourism is also largely due to the robust PPP of the ecosystem. The government has come out with many hand-holding schemes for entrepreneurs and service providers to revive their activities after the pandemic.
Kerala has successfully implemented a people’s participatory model in tourism which ensured the participation of the local populace, particularly women in tourism-related activities, ensuring empowerment and inclusiveness.
The State’s education sector has always had success stories, thanks to a literacy movement pioneered in 1989. Organisations such as the Kerala Sastra Sahitya Parishad have played a major role in making the literacy movement a success.
The educational reforms have achieved unparalleled success with Kerala being the first in the country to secure 100 per cent primary education for its people. Kerala’s focus on education has facilitated schools to start modernising their infrastructure and systems.
The State has the advantage of pioneering a retail revolution thanks to its tourism potential, increased per capita income and high literacy. The inclusion of retail setups right from grocery to food and the presence of a large women workforce has offered a conducive atmosphere for the success of the retail industry.
In the real estate sector, the State has witnessed a boom, posting growth last year in terms of the number of projects than that the previous year. The figures indirevealed by the Kerala Real Estate Regulatory Authority indicated that 159 new projects were registered last year compared to 114 in 2021. Of these, 148 were residential projects. The total built-up area of the projects posted a 97 per cent growth in 2022.
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