Its per capita income for 2009 stands at Rs 63,000 ? the highest in the country
Mahesh Vyas / New Delhi Jun 28, 2010, 00:12 IST
The state of Kerala is fascinating in many ways. This lush green coastal beauty is deservingly called God’s Own Country. A drive through the state almost never shows any distinction between urban and rural regions. The houses generally reflect a good standard of living and even the cities do not seem to have beggars on streets.
The good standard of living and the scenic beauty of the state do not seem to motivate Malayalis in general to work hard in their own state. They stopped cultivating labour-intensive rice paddy and shifted to coconut and rubber plantations long ago. Like Punjab, Kerala imports farm labour from Bihar.
Kerala has succeeded in keeping most industries out. It never joined the rat race that Maharashtra, Gujarat and Tamil Nadu indulged in to attract investments. Neighbouring Karnataka’s extraordinary vigour in wooing investments in recent months indicates that it has taken some serious lessons from Gujarat. But not Kerala. On the contrary, the state seems to be quite content with not attracting any new industrial investments. It ranks 14 out of 23 states in terms of outstanding investments.
States attract investments to ensure employment and growth for its citizens. Kerala solved this problem in a different way long before others even thought about it. If the Andhraites and the Kannadigas discovered the advantage of exporting software engineers in the 1990s, Kerala had discovered the advantage of exporting its labour to the Gulf in the 1970s.
Kerala has been ahead of the curve in globalisation. While the North battled with intruders, Kerala quietly incorporated first Christianity and then Islam and enhanced its trade with the rest of the world. There were no famous battles in Kerala. It is just a story of seamless and peaceful globalisation over time without much ado. Today, Kerala exports its labour to the world and also imports labour into the state. This is globalisation at its best.
When the time came, Kerala embraced communism too. But the Malayali communist does not bring the rest of the state to a halt when the government raises oil prices. Kerala has less of state bandhs compared to West Bengal and it has no Nandigrams.
It is interesting to note that today the country’s top administrative official, the cabinet secretary, is from Kerala; so is the home secretary, the principal secretary in the Prime Minister’s Office and the national security adviser. Yet, there is no chest-thumping about it. Kerala’s history has no wars and, therefore, the state does not believe in heroes. To put it simply, it has simply progressed to become the most literate state of the country.
The popular perception of Kerala outside of Kerala does not reflect this tranquillity and progress. Correspondingly, most Malayalis do not have a great opinion of the rest of the country.
Official statistics do little justice to Kerala’s prosperity. Kerala was ranked ninth in terms of net state domestic product (NSDP) among 22 states in 2008-09. This is a reflection of its small size. It ranks higher at the sixth position in terms of per capita NSDP. Goa, Delhi, Haryana, Maharashtra and Punjab (in that order) beat Kerala in terms of per capita NSDP. But, this does not do justice to the state.
Per capita NSDP is a poor estimate of the well-being of the people of a state because it is a measure of the income generated in a state and not the income accruing to the people. Thus, globalised Kerala, whose households receive a lot of remittances from Malayalis working in the Gulf and in other regions, suffers because NSDP does not reflect these remittances in the income of the people.
The official statistical machinery does not measure the income of households. It estimates the income of households along with that of the not-for-profit institutions that serve the households at the all-India level. Even this combined estimate is available only at the all-India level. There is no estimation of even this indicator at the state level. Therefore, commentators are forced to use only NSDP in their analysis.
The Consumer Pyramid put together by the Centre for Monitoring Indian Economy (CMIE) bridges this gap. And, in the process, it amends our (mis)understanding of Kerala. According to the Consumer Pyramid, Kerala ranks first, and not sixth, in terms of per capita household income.
Kerala’s per capita income in 2009 at Rs 63,000 was the highest among all states in the country. It is way ahead of Delhi (Rs 55,000). Punjab is a distant third with Rs 42,000. The official per capita NSDP understates the income of Kerala households by 22 per cent at Rs 49,000. It also overstates the income of Delhi households by a massive 65 per cent at Rs 90,500. Punjab is overstated by 22 per cent.
Delhi generates a lot more income than Kerala does. But the income of Delhi does not accrue to the people of Delhi. Therefore, the purchasing power of consumers is much lesser in Delhi. Kerala does not generate much income, but its households receive a lot of transfers in the form of remittances from its people working outside. These transfers raise the purchasing power of Kerala households substantially.
Kerala is correspondingly a big spender. As a result, its household savings rate is close to the all-India average. This is also the case with Delhi and Punjab. Ownership of assets such as household appliances and entertainment devices is high in Kerala, but the ownership of transport equipment is low. This explains the clean air in Kerala.
Given the excellent transfers, the Malayalis do not find it necessary to pollute their land by having scooters and industries. They do not even find it necessary to work hard in God’s Own Land. But it’s not that the Malayalis are lazy. Their excuse for taking it easy is that they have worked hard elsewhere. They work hard elsewhere and transfer part of the income back to Kerala where they build a nice home and spend a relaxed life.
Kerala is also the land of India’s best-known rationalist, Abraham Kovoor.
The author is managing director and CEO, CMIEmahesh@cmie.com
The portrayal of Kerala as a peaceful state is totally against reality. It is the state with highest- traffic accidents, road rage, suicides, and liquor consumption. Every day almost a dozen young malayalees are dying due to fever. And people have scant respect for rules and law.They do not respect either other malayalees or non-Malayalees! Now we have talibanism too. It is a state destroyed by corruption of politicians, stalinism and now jihad. Briefly, there is no rule of law in Kerala.
Mahesh
Shows that you tokk a ride around this no doubt beautiful place. You should have worked there to get a feel. Even if you want to carry your luggage, a group will come and object and demand that they be given that work for a pay. There are many myths in your mind.
the kerala farmer especialy those female christians) are one of the most hard working. As reagards chest thumping, you should look into the vernacular or local press. Not to say that Kerala has done exceptionally well on human development parameters and that doesn't call for mixing up issues.Your research need to go beyond statistics and casual tours.
Am sorry but this article seems more as an advert for CMIE... stating that their methodology to rank states is superior to GoI's methodology. But, as a resident in Kerala for 7 years - I'm not a born keralite - I believe the article doesnt reflect the realities!!! It is really amusing to see that the author chose to say "Kerala has less state bandhs than West Bengal". But sir, how much do we have when compared to the remaining 21 (Kerala and WB out of the 23 states)? I Work for a service industry, so I know how much it "HURTS"!!! Can you make an analysis with your pyramid as to ascertain what will be the gain in NSDP if Kerala were to have say only 10% of the current Hartals? - Kerala is a big spender - I Agree. But is it developmental/augmenting their lifestyle? I believe it is the opposite of it. Thanks
Posted by: Ontime Global Packer
July 01 , 2010, 16:55 IST
It does not matter whether Kerla is no 1 or not as long as people are happy over there..
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Posted by: Ron
June 29 , 2010, 16:43 IST
partly true, the comparison is with just Bengal (about hartal) as both has communism. The report cleary says Kerala is not keen about the industrial development. Actually Kerala has no much room for it , a small state with this population density.Quality of life in general is higher in Kerala than any other state.
The article does not capture the scenario in Kerala at all. For starters, 'God's own Country' changes its 'popular' face on those 'revered' state wide 'festivals', so lovingly remembered as Harthals! The state virtually is rendered useless. Waste of time, resources, productivity, revenue, image and such regulars apart, those who are on dire need to even go out of their homes are stones - a medieval custom for handling practitioners of black magic;so much for th peaceful and tranquil state. If people find time, after the squabbles over useless 'scandals', they indulge in liquor; the small "God's own country" being among the largest consumers of alcohol in the country !! Kerala is a region that has been blessed by talent, resources, natural beauty and all that any country/state would dream to have, yet not much good comes out of it. Three guesses why...
Posted by: Ron
June 29 , 2010, 17:31 IST
In Kerala nothing much is going to be affected by Hartal (no much industry), its just another holiday.
About alcohol consumption, yes it is higher, but the statistics coming from legal foreign liqour sale, as you know this is the only available liqour in Kerala where as in other state. Moreover we take the stats in terms of money spend on liquor, coslty foreign liquor with highest of sales tax will make the sum higher.
How can author explain this part:
Kerala quietly incorporated first Christianity and then Islam and enhanced its trade with the rest of the world.
Do you mean if Ambani wanted to trade in oil, he had to convert into Islam to be successful.Com'n, Give me a life.Globalization does not mean selling once own self and than by being like others and get globalized.
Moreover i have been in Dubai as a kid and have seen the life of an avg expat from Kerala. Most of them live without their family and kids in a small room sharing with many others. They miss the most important phase of their child's growth. With wife alone, one may also explain why Kerala is a porn capital of India too. (I am harsh but that is a fact).
Posted by: Ron
June 29 , 2010, 17:24 IST
from the article itslelf,
"The popular perception of Kerala outside of Kerala does not reflect this tranquillity and progress. Correspondingly, most Malayalis do not have a great opinion of the rest of the country."
I think it says all. Give and take. No offense meant.Cheers
Posted by: JJP
June 28 , 2010, 18:57 IST
Read carefully what the author is talking. Don't write rubbish.
Posted by: deep
June 28 , 2010, 11:50 IST
Totally agree with u! It's amazing that even the MD & CEO of CMIE has been bitten by the "secular bug"! I thought atleast he would have some common sense!
Regd wars in Kerala, the author seems to have forgot the Moplah riots, which was started by the Muslims against Hindus after the fall of the Caliph of Turkey! And currently, it's in the news for all the wrong reasons, i.e, jehadism.
The author also fails to mention that Kerala has the highest suicide rate in India.
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