The ‘Kerala Model’: a mix of spectacular successes and failures

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Professor KP Kannan’s paper lists four ‘spectacular failures’ of the Kerala model: unemployment among educated people – especially women, declining efficiency in tax collection, public sector as a drain on public resources, and the loss of public resources due to costly time and cost overruns on infrastructure projects

Professor KP Kannan’s paper lists four ‘spectacular failures’ of the Kerala model: unemployment among educated people – especially women, declining efficiency in tax collection, public sector as a drain on public resources, and the loss of public resources due to costly time and cost overruns on infrastructure projects

An article that looked at six decades of the “Kerala development model” called the results a mixed bag: successes in human development and “spectacular failure” of the state in critical areas like job creation, public financial management and the provision of economic services.

The article ”Kerala ‘Model’ of Development Revisited: A Sixty-Year Assessment of Successes and Failures” by Economist KP Kannan was published by the Center for Development Studies (CDS), Thiruvananthapuram.

Professor Kannan, former director of CDS and currently honorary member, lists four unresolved challenges as ‘spectacular failures’ of the Kerala model: unemployment among educated people – especially women, declining efficiency of tax collection, the public sector as a drain on public resources and the loss of public resources due to costly delays and cost overruns on infrastructure projects, especially in the electricity and water sector irrigation.

This scenario, along with the “external shocks” caused by the 2018 floods and the COVID-19 pandemic, are forcing Kerala to “re-examine” its governance system, the document notes. A re-examination, argues Professor Kannan, is particularly relevant in an environment where high human development has engendered high aspirations in the younger generation.

“Despite the impressive increase in per capita income as well as a high human development record, Kerala continues to face the problem of unemployment with severe underutilization of the labor force of the age population. working educated and less educated. The main burden of educated unemployment fell on women, adding to the problem of lack of gender freedom,’ observes the paper, which examines the period from 1960 to 2020.

While educated adult men partly overcame the problem of unemployment through large-scale migration to the Gulf countries, this option was not available to women on a similar scale. “Given the continued and growing yearning for higher education, this problem has now become one of high unemployment and underutilization of labor among educated women,” the document notes.

Remittances from abroad spurred the higher growth of Kerala’s economy during the later part of the 60-year period (1987-88 to 2019-20). At the same time, unbalanced sectoral growth has seen the contributions of production and agriculture and related sectors decline.

On another front, the inability of the state to address inefficiencies in revenue collection has led to borrowing to fill revenue and capital account shortfalls. The inability to generate profits from public sector enterprises has left the state burdened with their losses. Again, Kerala’s track record in implementing projects leaves much to be desired, the document notes with specific references to energy and irrigation infrastructure projects that have cost the state dearly in terms of time and silver.

To cite an example; “The worst performer is the Kallada (irrigation) project (in Kollam district) with the highest time overrun as well as cost overrun. It took 43 years to complete instead of the originally estimated six years, which meant a time overrun of 617% or 6.17 times. The cost overrun was truly breathtaking and involved 5359% or 53.6 times more expenditure than originally estimated.”

Talk to The Hindu, Prof. Kannan said it is high time Kerala had a growth vision with an environmentally sustainable framework. Moreover, the state cannot compromise on its ability to mobilize resources. With an educated workforce at its disposal, Kerala has been presented with a “historic opportunity”, he said. There is also, he added, a pressing need to make the management of public sector institutions both accountable and professional.

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