Study the article below and answer the questions included within it. This article has been sourced from The Economist magazine’s Essential India edition.
Kerala can teach India a thing or two about social welfare
But it also has plenty to learn about economic dynamism
KERALITES BELIEVE that their state, nestled in the lush south-western corner of India, stands apart from the rest of the country. Their cuisine and culture are distinctive, they boast, and their homeland is, after all, God’s own country, having been carved out from the sea by an axe-wielding avatar of Vishnu. That may be so. But there is a more worldly reason that the state of 36m people is distinctive—and worth paying attention to. On November 1st Kerala declared that it had eliminated extreme poverty, becoming the only state in India to manage the feat.
Some nitpicking goes on among economists and analysts about the precise definition of destitution. But there is no denying that Kerala is India’s development champion. According to the Indian government’s “multidimensional poverty index”, less than 1% of Keralites were defined as poor in 2019-21, by far the lowest rate in the country. (The all-India average was 15%.) The index is a composite measure of 12 indicators covering health, education and living standards. On every one of these, Kerala’s rank is among the country’s best. It is to Indian indices what Scandinavia is to the world. How does it do it?
Q1. Why do the people feel so proud about their state? In what way, their living habits differ from that of other Indians?
One answer lies in its unique politics, which have always been animated by contests over redistribution and welfare provision rather than caste and religion. The Hindu-nationalist Bharatiya Janata Party has only ever won a single parliamentary seat in Kerala’s history as a modern polity. Power at the state level alternates between the centre-left Congress and the further-left Communist Party of India (Marxist), which is currently in power. This is partly because of Kerala’s distinctive demography. Just over half its people are Hindu, compared with 80% nationally; large Muslim (27%) and Christian (18%) minorities mean that identitarian politics resonate less. Anti-incumbency helps too. The communists who ruled for 34 years in West Bengal, a backward state in the east, grew stagnant and corrupt. In Kerala they are routinely booted out, keeping them responsive.
Q2. In what way Kerala differs from the rest of India (a) politically, (b) demographically
Another answer has to do with the style of governance. Every Indian state promises development, but most exercise authority from the top down. Few give ground-level officials any autonomy. But Kerala worked with local councils and community organisations such as Kudumbashree, a women’s co-operative with over 4m members, to identify 64,000 households living in extreme poverty. Local officials then drafted and implemented “micro-plans” to lift each household out of poverty. Decentralisation helped in the pandemic, too, especially with matters like contact tracing and effective targeting of local lockdowns.
Q3. What is so unique about Kerala’s governance pattern? How it helps the poorest of the poor people?
Kerala is, of course, far from perfect. Leftist rule may have made its society more equal, but it has also stifled growth and investment. Thousands of trade unions emerged at the height of communist dogmatism in the 1960s and 70s and quickly became a nuisance for businesses and even ordinary citizens. Industry accounts for only a quarter of Kerala’s output, a share that has barely budged over the past two decades, even as it has risen among more dynamic neighbours. Next-door Tamil Nadu is at 33%. Overall growth—6.2% last year—slightly trailed the national average. Tamil Nadu grew by 11%.
Q.4 .. What are the shortcomings of the Kerala model with regard to industrialization? How has it affected Kerala’s growth rate?
This stagnation is suffocating the state’s potential. Kerala’s youngsters may be the most literate in India, but their youth-unemployment rate of around 24% is the second-highest in the country. The state’s income figures are flattered by vast remittances from the Gulf, which for generations has lured Keralite migrants with brighter prospects.
Q5. How have the youth of Kerala suffered despite being well-educated?
Q6. From where does the State get its incomes?
Watching their neighbours race ahead is forcing the Communist Party to adapt. It has sought to distance itself from unions, and now courts investors and hosts startup summits. Recent analysis by the Economist Intelligence Unit, our sister organisation, suggests that the state’s business environment has improved in recent years. But much more reform is needed, starting with cutting red tape for land acquisition and project approvals. Kerala ranks ninth among 15 states the EIU tracks, and well behind the leaders Tamil Nadu and Gujarat.
Q7. How and why has the communist government of Kerala modified its radical pro-labour policy?
Kerala’s status as a development superstar despite its sluggish growth is commendable. But its model would be even more impressive if it could also power growth. A state that can become prosperous through the politics of universal improvement would truly stand apart from the rest of India—and indeed much of the world.
Q8. How can Kerala be a development model for India and even in globally?