Economy of Kerala

Kerala Economy not only covers the statistical part of economy but also the human development , Economy of Kerala has got a major shift in the recent decade with a great focus on secondary and tertiary sector. We have Bifurcated the Economy of Kerala into following topics for the systematic study for KeralaPSC Exam by our students.
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Faqs on Economy of Kerala

What is the overall economic condition of Kerala?

Kerala has the 9th largest state economy in India, with an annual Gross State Domestic Product (GSDP) of ₹9.78 lakh crore (US$131.98 billion) in 2020–2021. Per-capita GSP during the same period is ₹257,711 (US$3,100), the sixth largest in India. The state has achieved significant progress in human development indicators like literacy, healthcare, and life expectancy. However, it faces challenges like high unemployment, fiscal deficit, and dependence on remittances.

What are the main sectors of the Kerala economy?

The main sectors of the Kerala economy are:

• Services Sector: This is the largest contributor to the state’s GSDP, accounting for around 63%. It includes tourism, healthcare, education, IT, banking, and financial services.
• Industry: This sector contributes around 28% to the GSDP. Major industries include food processing, chemical manufacturing, coir, cashew, textiles, and rubber.
• Agriculture: While agriculture’s share in the GSDP has declined to around 8%, it remains a significant sector, particularly for employment. Kerala is a major producer of spices, coconut, rubber, tea, coffee, and cashew.

What are the key strengths of the Kerala economy?

Kerala’s key strengths include:

• High Human Development Index (HDI): Kerala boasts a high HDI, reflecting its achievements in education, healthcare, and overall well-being.
• Thriving Tourism Industry: The state’s natural beauty, backwaters, beaches, and cultural heritage attract a large number of tourists.
• Skilled Workforce: Kerala has a well-educated and skilled workforce, contributing to the growth of the services sector.
• Strong Social Infrastructure: The state has a robust social infrastructure with good healthcare, education, and social welfare facilities.

What are the challenges faced by the Kerala economy?

Some of the challenges include:

• High Unemployment Rate: Despite a skilled workforce, Kerala faces a high unemployment rate, especially among educated youth.
• Fiscal Deficit: The state government has been facing a persistent fiscal deficit, limiting its spending on development projects.
• Dependence on Remittances: Kerala’s economy is heavily reliant on remittances from non-resident Keralites, making it vulnerable to external shocks.
• Agricultural Stagnation: The agricultural sector has been facing stagnation due to factors like fragmented land holdings, declining productivity, and climate change.

What are the government’s initiatives to boost the Kerala economy?

The government has launched several initiatives, such as:

• Kerala Infrastructure Investment Fund Board (KIIFB): To mobilize funds for infrastructure development.
• Industrial corridors: To promote industrial growth and create employment opportunities.
• Start-up Village: To encourage entrepreneurship and innovation.
• Reviving traditional industries: Focusing on reviving traditional industries like coir and handloom.