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

A paper which looked at six decades of the ‘Kerala Model of Development’ has termed the results a mixed bag: of success stories in human development and ”spectacular failure” of the State in critical areas like employment creation, management of public finance and delivery of economic services.

The paper ”Kerala ‘Model’ of Development Revisited: A Sixty-Year Assessment of Successes and Failures” by the economist K. P. Kannan has been published by the Centre for Development Studies (CDS), Thiruvananthapuram.

Prof. Kannan, a former CDS director and currently honorary fellow, lists four unresolved challenges as ”spectacular failures” of the Kerala Model: unemployment among the educated – especially women, declining efficiency in tax collection, the public sector as a drain on public resources, and, loss of public resources due to costly time and cost overruns on infrastructure projects, notably in the power sector and irrigation.

This scenario, together with the ”external shocks” rendered by the 2018 floods and the COVID-19 pandemic makes it imperative for Kerala to ”re-examine” its governance system, the paper notes. A re-examination, Prof. Kannan argues, is especially pertinent in an environment where high human development has spawned high aspirations in the younger generation.  

‘’Despite the impressive increase in per capita income along with a high human development record, Kerala continues to face the problem of unemployment with a significant underutilisation of labour of both educated and less educated working age population. The main burden of the educated unemployment has fallen on women adding to the problem of gender unfreedom,’‘ the paper, which looks at the  period from 1960 to 2020, observes.

While adult educated men partly overcame the problem of unemployment through large-scale migration to Gulf nations, this option was not available to the women on a similar scale. ”Given the continuing and increasing aspiration for higher education, this problem has now become one of high unemployment and underutilization of labour among educated women,” the paper notes.

Remittances from abroad spurred the higher growth performance of the Kerala economy during the latter part of the 60-year period (1987-88 to 2019-20). At the same time, lop-sided sectoral growth saw contributions from the production and agriculture and allied sectors diminishing.

On another front, the State’s inability to tackle inefficiencies in revenue collection has led to borrowings to meet revenue and capital account deficits. Failure to generate profits from public sector enterprises has left the State burdened with their losses. Again, Kerala’s record in project implementation leaves much to be desired, the paper notes with specific references to power and irrigation infrastructure projects that have cost the State heavily in terms of time and money.

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

Speaking to The Hindu, Prof. Kannan said it is high time Kerala had a vision of growth whose framework is environmentally sustainable. Further, the State cannot compromise on its ability to mobilise resources. With an educated labour force at its disposal, Kerala has been gifted 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.