Kerala model of development- An analysis
- Part 2 -

Thangkhokai Haokip *

at Cochin, Kerala :: Picture - Dayanidhi Huidrom

The question of sustainability: the Gulf boom

About one-third of the Non-resident Indians (NRIs) accounts to Keralites that numbered more than 2.5 Million mostly living in the Arab states of the Persian Gulf. The mass migration started way back in the early 1970s in search of a better economic opportunity. This wave of migration is referred to as the Gulf boom.

A year before, a series of restlessness and panic have struck Kerala when Saudi Arabia introduced Nitaqat law providing mandatory recruitments of locals in private sector with the reservation of 10 percent private jobs for the locals.This has been followed suits by the captivity issue where 46 nurses from Kerala were held hostage by the ISIS militants in Iraq and later, after a hard effort, were allowed to return safely (but after a series of mental agony).

What then does this episode have to do with our topic? It surely does. It really matters to the economy of the state and to the country's economy as well. Here is the disturbing scenario. In its latest issue of 'Migration and Development Brief', the World Bank on October revealed that India will top global remittances with $71 Billion this year.

According to S.Irudaya Rajan, a Professor at Centre for Development Studies, Thiruvananthapuram, at least one-fifth of the total remittances to India would come from the Keralites mostly working in the Gulf. This estimate shows the Keralite's remittance to roughly Rs. 75,000 Crore! It was Rs. 50,000 Crores and Rs. 62,000 Crores for the previous two years.

Let's go further, in 2008 the total remittance by Keralites accounts to 30.7% of the state GDP which is more than 15.13 % of the total remittances to India. Again in 2003, the remittances were 1.74 times the revenue receipt of the states, 7 times the grants of the central to the state.

Nowcomes a big question mark. Is the Kerala development a sustainable model? What impact would the state economy face in the event of a strain relation between the Gulf countries and India or say a war(I guess not!)? I'm here not to deliver a judgement but let me offer to you what has been told to me while throwing that big question mark!

One of my Professors at Kerala State Civil Service Academy explicitly told me that the state economy will cripple down and face economic stagnation accompanied with very high unemployment. That would means adding salt to the injury, in being Kerala as the highest unemployment state in the country at present.

Another Professor, with an optimistic stand, told me that since the state have had a good social development indicator, the remittance cut off will not pose a big threats as the government will rationalize its spending with the help of the central government, justifiable to some extent and I say that's politics. Thus, it's undeniable facts that the stability of the state economy is at the mercy of the 2.5 Million NRKs who constitute over 8% of the state population.

In addition, the Gulf remittance assumes a national importance due to the role it plays in the country's Balance of Payment (BoP). For instance, the Current Account Deficit (CAD) of our country at present is pegged at 7.8 Billion and FDI making only about a third of remittances from abroad.

Another aspect of concern is the high unemployment as mentioned above, the state registered among the working age group of 19-59 years. As per the ministry of Labour and Employment, Employment and unemployment survey 2011-12, Kerala was found to be the highest state in terms of unemployment with 9.9 % while its counterpart Gujarat was the best performer with just 1.0 %.

To this, unemployment by choice and not by chance is the response that is justifiable to some extend but with unsustain state. With the state loaded with high proportion of literate persons, it produced large skilled workers and this skilled population can't be accommodated to the much less skilled job the state has generated. Thus a large chunk of the skilled worker is left out, who in turn refused to take up a manual and hard labour job that pave the way and create a safe haven for outsiders and migrant workers to this unskilled labour sector.

Yet another question remained in the queue with regards to the state inability to create enough employment opportunity to tackle the demand-supply state of affairs. This can be linked to thelow rank the state has registered in terms of industrial and economic development. The violent unionisation, the unfriendly trade organisation that often led to producers and manufacturers fleeing the state in search of a better pasture to graze upon is one factor.

The high density of population (860 per sq. km) alongside the ever going debate of environment versus development also counts high as land acquisition becomes the cause of headache for the industrialists as well as the state government. For instance, one would find the roads of the state in sorry states over its ever congested condition with the high speed of vehicles movement that prompted one to take extra care if he happens to be a passer-by. I'm, casually, one!

Manipur and her HDI: The way forward

The updated version of HDI 2011 shows the overall HDI for Manipur at 0.65 on the scale of one. With regards to the 'progressive' states, the reports suggest that during the 12 years (1999-00 to 2011-12) while India's HDI rose by 46 per cent, Manipur figure stands at 42 per cent and thus failed to raise its HDI equal to the national average. The percentage change in education was 62 for national average which is the same for Manipur. In case of income index, Manipur achieved a mere 41 % raise against the national average of 68 %. No reasons to cheer.

Coming to literacy rate, Manipur recorded 79.8 % against all-states of 74.0 %. Our state Per Capita income for the year 2012-13 was a meagre amount of Rs. 36,478 much lower in compare to our neighbouring states of Mizoram, Nagaland, Tripura and Meghalaya with Rs. 60836, Rs. 65908, Rs. 60903 and Rs. 59513 respectively. All the above figures are self-explanatory and the meaning it conveys is explicit.

Manipur have a good distance to go. A holistic approach in formulating development policy and programs accounting the state's geographical entity is our due. Gujarat's model is related to physical infrastructure while Kerala's experience is with the social infrastructure. Now what can Manipur best incorporate from these two? None is superior or inferior to other. Development is incomplete with the absence of either one. The two makes the two sides of the same coin. What is needed first is what one is at ease with.

Gujarat's model is a 'top-down' approach while its counterpart Kerala's is of a 'bottom-up' approach. Manipur lies outside the ambits of the Diamond Quadrilateral corridor project. In addition, the difficult terrain and connectivity issue makes it harder for the state to access a proper physical infrastructure. What we need now is to adopta policy to consume the 'bottom-up' approach to invest in social infrastructure. More importance should be given to social infrastructure. Social equity is a pre-requisite for an efficient growth and development with prosperity. Social infrastructure is a better start point. But this is not absolute. It's relative and thus applies to our state.

While our low income and less employment can be attributes to the absence of large scale industries and manufacturing company, (not a justification) the state government should adopt a comprehensive measure, the ways and means to harness and exploit the ongoing railway project that is due to makes it ends in a year or two. The recent announcement of the World Bank to provide a major share of Rs. 8150 Crore for improving power transmission system in the six state of Northeast is good news.

The power grid corporation of India are set to execute the work once the order has been handed. With regard to tourism, we sure had a reason to cheer about. Our state registered about 154 % increases in the flow of tourists in 2012-13, the highest among the northeast states. Tourism, if properly promoted, will be a game changer for the state and the whole northeast with the central government proposed to invest Rs. 3000 Crore in the region for the development of highways and state roads.

The Mekong-India economic corridor project, a four-lane motor ways to connect Northeast with Bangkok is round the corner with its completion due in 2017. Will it happen? Well, until then, I crossed my finger!

Concluded...