Statsguru: Kerala outshines others in literacy and poverty reduction

Kerala marks a social milestone with zero extreme poverty and world-class human development metrics - but weak job creation and industry remain its Achilles' heel

Kerala achieved a historic milestone by becoming India’s first ‘extreme poverty-free’ state on November 1. While it continues to succeed in welfare-oriented initiatives, its job opportunities and industrial base remain weak. 

Kerala tops all major development indicators in India. The state achieved 100 per cent digital literacy in 2025 compared to India’s 38 per cent and maintains an infant mortality rate of just 5 per 1,000 live births, lower than even the United States, which recorded 5.6. 

 

The state’s social sector spending as a share of the total Budget declined from 39.9 per cent in the financial year 2001 (FY01) to 31.6 per cent in FY25, while India’s share rose from 36.8 per cent to 41.8 per cent during the same period. This reflected a lower need in the state to spend on the social sector than in others. 

 

Kerala matches India's labour force participation rate at around 45 per cent in 2023-24, but faces much higher unemployment, especially among women. 

 

Its per capita income has remained consistently higher than the national average. The state’s rank improved from 12th position in 2020-21 to seventh in 2024-25. 

 

The state’s economy is driven by the tertiary sector, which dominates both output value added and employment. In contrast, India’s primary sector employs 46.31 per cent of workers but contributes only 19.74 per cent to total gross added value in 2023-24. 

 

Its manufacturing sector contributes below the national average of 14.3 per cent to its economy, placing it fourth among southern states in 2023-24.