KERALA'S INVESTMENT SCENARIO

Latest Finance Ministry reports reveal that Kerala is right at the bottom, among all the states in India, in terms of Industrial Investment. In the 15 years’ period from 1991 April 1 to 2006 March 31, the investment that has flowed into Kerala via MoU’s with the Centre is only worth Rupees 1,017 crores. This constitutes just 0.44 % of the total of 2.28 lakhs crores at the National level. All the other South Indian states have attained investments worth 3 to 6%.

Chart I
MoU’s vs Investments – April 1, 1991 to March 31, 2006

Andhra Pradesh
MoU's - 491 nos
Investment - 14470 crores
Average - 6.30%
Karnataka
MoU's - 179 nos
Investment - 8891 crores
Average - 3.88%
Tamil Nadu
MoU's - 436 nos
Investment - 9574 crores
Average - 4.18%
Kerala
MoU's - 79 nos
Investment - 1017 crores
Average - 0.44%
National
MoU's - 6270 nos
Investment - 228906 crores
Average - 100.00%

Kerala’s performance in attracting FDI’s is still more pathetic. In the period from April 2001 to March 31st 2006, while 1.01 lakhs crores rupees reached India, Kerala’s share ws just 334 crores, just 0.32 %. The other southern states are streets ahead of Kerala in this category too.

Chart II
FDI – April 1, 2000 to March 31, 2006

Andhra Pradesh
Investment - 3633.60 crores
Average - 3.57%
Karnataka
Investment - 7575.71 crores
Average - 7.45%
Tamil Nadu
Investment - 7070.79 crores
Average - 6.95%
Kerala
Investment - 334.02 crores
Average - 0.32%
National
Investment - 228906 crores
Average - 100.00%

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Statistics indicate that the investment in Kerala, which accommodates 3% of India’s total population, is below 0.5 %.There is another side to this; God's own country also carries 11.12% of India’s total unemployed population, as per the report published by the Central Human Resources Ministry in November 2006. Economic experts underline that the main reason for this high percentage of unemployment is the backwardness in Industrial Investment. While our southern neighbours overtook Kerala in this area eight years back, today only backward states like Bihar, Nagaland and Jharkhand are behind Kerala. Experts insist that Bihar will overtake Kerala in the next four years. Kerala has not been able to achieve any significant progress in this regard since 1990, when it could boast of one significant index – the state with the maximum number of Public Sector companies(113 out of India’s total 1071). Later, some of them closed down; majority of those still working are running at a loss. The tragedy has been that while the public sector crumbled, no significant progress was achieved in the private sector as well. While the public sector employed1.15 lakhs workers in 1990, only 70% of these receive regular wages today. Even F.A.C.T., the largest public sector undertaking in the state, is facing the greatest crisis in its history.

Kerala, with its 100% literacy record, is way backward in creating job opportunities.This fact can be understood by observing the job opportunities created by public sector companies through Mou’ s signed with the State Govt. While, in the 15 yr period, 10 lakhs jobs were created through 6270 MoU’ s at the National level, Kerala’s share was just 11,689- just 1.16%. This, when Tamil Nadu created 58,540 jobs (5.82%) and Andhra Pradesh 55,286 jobs(5.50%).

Though a certain section of economics experts attribute the low investment in Kerala to its small area and proportionately low population, statistics do not back them up. This will be evident from a scrutiny of the population-investment ratio. Kerala, with 3.18 crores as population, has a per capita industrial investment of Rs. 17657.80 only.In Karnataka, with population of 5.28 crores, it is Rs. 21298.70 and in Tamil Nadu, with population 6.24 crores, it is Rs.21525.60. Even if the hapless Malayali consoles himself that the difference in Per Capita Investment is only about 3500/-, the stark truth remains that all these three states have an excess population of more than 2 crores than Kerala-and still maintains these healthy figures.

Chart III
Per Capita Investment

Andhra Pradesh
Investment - 144042 crores
Population - 7.62 crores
Per Capita Investment - Rs.18903.17
Karnataka
Investment - 112458 crores
Population - 5.28 crores
Per Capita Investment - Rs.21298.70
Tamil Nadu
Investment - 134320 crores
Population - 6.24 crores
Per Capita Investment - Rs.21525.60
Kerala
Investment - 56152 crores
Population - 3.18 crores
Per Capita Investment - Rs.17657.8


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