Kerala has historically been considered to be the best State in the country. And for good reason… a high human development index with the highest literacy rate and a relatively stable tourism economy. It’s a State where the average individual has been literate enough to converse both in English and Malayalam.
God’s own country was, in fact, the subject of wonder for many young students studying the CBSE and the ICSE books. Interestingly, the high literacy rate was also a subject of wonder from the Nehruvian times.
The model, however, wasn’t that closely scrutinized. A strict analysis reveals a much different tale. It reflects a facade. Kerala’s high literacy rate and human development index have hardly powered the State’s economy.
Several economists and political leaders have labelled the Kerala model of growth as farcical and not worth following. A telling case in point is the unemployment rate in the state which stands at 12.5% (2017), the third highest rate in India. This raises questions pertaining to the State’s primary ‘well being’ in terms of citizen lifestyle and living parameters.
Where did the model go wrong? Why isn’t the most educated State in the country not proportionally developed, or even industrially dynamic?
The answer lies in the careful analysis of Kerala from the perspective of an outsider, which this blog will explore in depth.
Kerala, in the 1970s, was markedly different from the conventional economies where the basic thrust was and continues to be, GDP. While the Southern State emphasized on land reforms, poverty reduction, educational access and child welfare, income was an aspect that was left ignored.
Hardly a pioneering approach, it still earned international recognition and coated the egos of Kerala’s political masters with dollops of the unsubstantiated belief that led to an aversion to change.
Apart from that, the state also happens to be the highest receiver of overall remittances to India. Kerala received over Rs 1 Lakh Crores in remittances over the course of a single year (2015). Therefore the state’s economy is largely dependent on the economic conditions in the Gulf which should be concerning as the remittances support over 2.4 million families.
Kerala has also been a victim to three major damaging characteristics to its socio-economic status:
Embracing the Middle-East seeking greener pastures
Mass departures have been a bane for the State. Keralites have traditionally migrated to the Gulf region where their education and skills are most appreciated and rewarded. It’s not just better job opportunities and living standards. The pervasive nepotism and corruption rooted in the government make people leave the state in utter disgust. It’s a drain that has left Kerala with critical empty spaces most needed to ensure financial well-being.
Institutionalized Union militancy
In Kerala, there are several labour unions of various kinds, which terrorize regular people and anyone looking to bring innovative measures in the state. There have been many cases, where if you were to use machines to do a job traditionally done by labourers, you would have to pay the unions a fee called Nokkukooli – wages for being a spectator.
Kerala is also host to hundreds of strikes and bandhs of different scales and types. In a democratic state, people have the right to protest, but these protests are often illegal and damaging to the confidence of industries and regular people in the state (the beef ban protest recently is a fine example)
Communism and a continuous state of differing opinions in the State have created a nightmare for industries, organizations, and companies looking to create an employment base in Kerala. The State witnesses agitational politics with detrimental effects on the society.
And it is not like the communists don’t like investments in Kerala, but they would only allow it when they are in power. This change accompanied by the differences between the Left and the Centre have left Kerala without any reforms in governance. This has stalled several major infrastructure projects because industries are skeptical about the state’s ROI.
So, is education necessarily a marker for growth, financial well-being and peace?
Kerala can be studied as an example of the tussle between classic Keynesian-Smith economics and communism, HDI and GDP-based growth and the socio-political beliefs in the State vs. the ideation of globalized systems.
One thing is for certain. This pontification is not a fight between the philosophies of the North and the South but is a rather subtle reflection of the great State’s nominal manufacturing, declining agriculture, and a rather dismal economic performance.