SOCIO-ECONOMIC CLIMATE



The tiny state in the south west corner of the Indian Peninsula Kerala received world wide acclamation due to its unique settlement pattern and the achievements in the socio-economic sectors without economic growth. For Richard Franke and Barbara Chasin (1990) Kerala's experience is an example for 'development without growth'. Kerala state attained highest physical quality of life while enjoying the lowest per capita income of the states of India. (Tewari and Joshi,1988). The physical quality of life index (PQLI), is a composite index formed by Overseas Development Council of United States in their report "United States and World Development, Agenda for 1977", to measure the economic and social welfare of the people by taking three components namely life expectancy, infant mortality and literacy.. Following this methodology Tewari and Joshi have worked out PQLI for Indian States and India. The PQLI trend of Kerala and India from 1961 onwards are as per the chart below (Pillai P.P,1994). The per capita income is not taken in the PQLI calculations.

Physical Quality of life Kerala and India

PHYSICAL QUALITY OF LIFE INDEX (PQLI)

 

1951

1961

1971

1981

1991

 

Kerala

29.64

50.47

68.14

79.2

90.52

 

India

NA 

30

40

45

55.45



Later United Nations Development Program (UNDP) formulated the concept of Human Development Index (HDI) as a measure of socio-economic welfare of the people. In HDI calculations health and educational attainment along with per capita income is considered. Human Development Index of Kerala is found to be low compared to developed countries which enjoy the same physical quality life. This is due to the low per capita income of Keralite. However HDI is found to be greater than all India average due to the health and educational attainments by Kerala. HDI of India is estimated as 0.41 in 1990, while Kerala's HDI is estimated as 0.651 in 1987(Siva Kumar, 1991).Without having per capita income, urbanisation and industrialisation the state has reached the third stage of demographic transition with good medical care and education (Jeromi 2002).

The highly impressive performance of Kerala among the states of India is due to the welfare oriented strategy of developments adopted by the 'Native Kings' of Kerala and followed by the successive state governments. During the past five decades, Kerala gave great emphasis to education, health and infrastructure coupled with several radical redistributive policies like distribution of land holdings. Some critics have considered Kerala's development experience as naive romanticism16 (Parayil) and some other have underlined 'limits to Kerala Model' (George). They have argued that the deteriorating finance of the State Government, due to stagnancy in economic growth, limit the government expenditure on social welfare measures and thus the sustenance of achievements already made.

Kerala has started tasting the bitterness of 'Kerala Model". Now it has been facing a serious crisis due to low growth, high cost, low productivity, low investment and low employment in the state's economy (Jeromi P.D, 2002). 2Kerala stood to suffer in the growth and development of primary and secondary segments of the economy. 16Agriculture is badly affected due to the high cost of cultivation, poor productivity, unviable smaller holdings, and un-remunerative price of products. Families depended on agricultural activities borrowed funds to launch agriculture, fall victims to debt traps, leading to suicides. The state has invested lions share of the economy for human resource development not resulting in activities contributing to the states primary and secondary sectors of economy. The salaries and pensions in Kerala constitute a very high percentage of the state's revenue. A vicious circle of deficit, debt, debt service charges prevails in Kerala. As per the Economic Review 2008 the debt to GSDP ratio of Kerala is found to be the highest among the states of South India (42%) while our neighboring state of Tamil Nadu is having only 27%.Per capita debt is also highest among the states of South India (Rs 12681/-) while Tamil Nadu and Karnataka is having only Rs 7782/- and Rs 7446/- respectively.

The high standard of living enjoyed by Keralite is often supported by external remittances from Non-Resident Keralites (NRKs) who work outside Kerala and outside India. The result is the aging of the resident population of Kerala as educated and energetic working class, work outside Kerala, leaving alone their old parents in palatial bungalows constructed with their remittances. The extreme consumerism converted Kerala a destination for marketing consumer goods and luxury items.

The development trajectory of Kerala has come to a halt as the state is not finding enough means to maintain the educational and health achievements it has acquired. High consumption standards of people without long term thinking make the situation further worse. To tide over the crisis of Kerala model, prudent diagnosis coupled with strategic intervention and awareness campaign is required. In this situation it is very much apt to examine whether the scattered settlement habit prevalent in Kerala has any cause-effect relationship to the socio-economic scenario of the state.