The Economy Of Kerala State

India is a great country. One of the states in India is Kerala. Kerala was known as one of the poorest states in India during the 1950s. Today that is not the case. They are not only a major state but the poverty, and unemployment has reduced. There is also progress in healthcare, administration, the building of infrastructures, education, feeding, agriculture and so many more. Let’s see the economy of Kerala state, an overview

Classification Of Economy In India

The economy of Kerala state can be divided into three phases. Within these three phases, the economy of Kerala state grew from the poor and starving state to a developing state. Let’s look at them one after the other: 

The First Phase (1956 – 1975): 

During these 19 years, Kerala was stagnant. It was known for its poverty and hunger. In 1957, they were rated among the smallest and poorest states in India. In 1964, they were starving. The unemployment rate was up to 13% and the percentage of poor people was 90.8%.  Despite the abundance of resources, there were slums, poverty, and unemployment. All of this was because of the low levels of production. Agricultural and industrial products were produced in small quantities. The systems of production were old and backward. There was very little to sell. In terms of investments, very little was invested because of the low rate of production. This created a cycle: low production to low sales to low income to low investment. It was very difficult to break the cycle. However, during this period too, some economic policies were put in place. The government lent a hand. Most privatized public infrastructures were taken over and managed by the government. There was an increment in the public investment. Policies were put in place making most public utilities fall into the hands of the government.

The Second Phase (1976 – 1990):

Due to the policies made during the period of the first phase, the economy of Kerala state witnessed rapid growth. Most of the policies then were aimed at giving as many resources to the government to handle. It was called the anti-capitalism system. There was an improvement in the public infrastructures such as communication, power, water supply, and so on. There a lot of money went into education and healthcare. As for education, most private schools receive funding from the government. The teachers of private schools were paid very little. When the government stepped in, the schools were better equipped, the salaries of teachers were paid and the schools were called aided schools. As for healthcare, some changes led to important improvements in the quality of life. Things like birth rate, death rate, illnesses, child expectancy, and so on were worked on and solutions for problems emerged. During this period there was a lot of migration. This was a source of revenue to the government. More jobs were available and people were employed and well paid. That cuts down on the unemployment rate. There was also a large scale of remittances that made a great impact on the economy and the revenue of the state and the country as a whole. Most of the growth in this phase happened due to the migration to and from Gulf countries, the large flow of remittances,s and the policies that were implemented in the first phase. 

The Third Phase (1991 – 2016):

This is the last phase of the economy of Kerala state. Here there is more developed than the second stage. Public infrastructures are owned by the government. There is a higher flow of remittances. Production, both in the agricultural and industrial sectors has increased and is more modern. There has been a greater public investment. Aside from that, there is a private investment for individuals too. There is a boost in the GDP of Kerala state. They contribute to the total revenue and GDP of India as a country. Kerala also changed from a state of poverty and unemployment with slums. The state is being urbanized and there is an increase in the rate of employment. The major reason for the growth is the number of state and federal policies made concerning matters like globalization, economic reforms, private investments, and the likes.

Conclusion

Kerala is a state in India that underwent economic growth. From the stagnant economy of the 1950s to the buoyant economy of the present. Their growth is classified into three phases. Each of these phases has major reasons that spurred them to the next phase