Assignment 1

Kerala development model: Features and comparison

-Reshma Mariam Georgi
M2 UD

This paper will be looking at the Kerala development model in India, its features and
how they comparison to other state models. Today, there is a virtual battle between
competing “models” of growth in India, with states such as Gujarat and Bihar vying
to capture national imagination. But what should a ‘model’ state value?

Kerala’s Development model

Kerala continues to rank at the top among Indian States in the human development
index. Kerala’s Development model has been praised for its ability to reach
development targets as compared to countries with better economies at a fraction of
the investment. KMD is unique because it contrasts the traditional standpoint that
views development as a sequel to growth and that economies should give the highest
priority to growth of per capita output. KMD shows that conditions of life can be
improved without waiting for economic growth.
So, what were the factors that created this unique model?
The first government (C.P.I) had initiated several welfare measures immediately after
the formation of the state, which were primarily focussed on health and education
supporting both private and public initiatives. These initiatives finally became the
cornerstone of the KMD. Even when the leftist government was not in power, there
was strong mass mobilisation that fought for health care, educational opportunities
and reform for all social classes and held governments accountable.
Other factors include
● the strong foundation laid by socio- religious groups, (example: the Nair
practice of giving women a high position in property ownership on the part of
a substantial, prominent, and powerful group was clearly influential on the
appreciation of women’s rights and positions in the society in general.)
● strong presence of Communist party,
● shift from agrarian economy
● development of progressive land reforms such as the Land Reforms ordinance,
which prohibited the eviction of people from their tenancy land, the land
occupied by them for dwelling and homestead.
● migration and its benefits drastically affected the consumption pattern and
standard of living in a tradition bound society
● public distribution systems (success of ration shops)
● Strength of local self-government (success of decentralisation)
● women’s participation at the grassroots (Kudumbashree)
● women’s political empowerment in the state- 50 percent reservation in local
self- government institutions has substantially complemented.

All these are resulted in positives features of the model such as

● high HDI, high gender equality,
● high literacy rate- especially female literacy which directly or indirectly rapid
decline in Infant Mortality Rate (IMR) and fertility, as also improvements in
general health, nutrition and well-being,
 ● good reading habit- most newspaper consumption despite Malayalam being
only the 9​th​ major language of the country, also village libraries established in
the 1930s as well as theatre aided informal education,
● education -achieved ‘Universal Elementary Education’ without a gender
● gap or social disparity and has the lowest school dropout rate.
● health services and infrastructure - Kerala scores 1 in all major health
indicators, high life expectancy, low infant mortality rate
● high standard of sanitation;
● housing coverage; proportion of homeless less than 1 percent
● family planning and population stabilization;
● most developed social welfare system in India- public distribution system, free
basic education and health care and free mid-day meal scheme up to class VII
● high food and nutrition security and progress of poverty alleviation; provision
of free mid-day meals to primary school children, introduction of
supplementary nutrition programmes for pregnant mothers and pre-school
children from poor households, the granting of old age pension to rural
workers and implementation of national poverty alleviation programmes such
as Integrated Rural Development Programme (IRDP), Development of
Women and Children in Rural Areas (DWCRA) and Training of Rural Youth
for Self-employment, role of Kudumbashree in microfinancing
● democratic public action; structural transformation of the society through the
implementation of land reforms positively re-designed the material and social
power of landless classes. This has provided a new civic consciousness among
the people that constantly kept the governments more accountable in terms of
governance.
● cultural harmony, communally the least sensitive state,
● Growth of GSDP showed that tertiary sector recorded the highest rate of
growth of 11.8% in 2011–12, followed by secondary (7.03%) and primary
sector (-0.73%).

As many achievements as it has in the social sector, the state still lags behind in
agriculture, industry and creation of employment. Some of its negative aspects
include:
● Kerala considered a soft state, vulnerable to pressures from various interest’s
groups, any new development is questioned.
● ‘Investor unfriendly”- political climate has tended ‘to encourage economic
policies that are extremely hostile to the market mechanism, even in areas
where this hostility and the excessive reliance on government regulation that
goes with it- is quite counterproductive’, perception of labour militancy,
especially shortage and irregularity of power supply, lack of entrepreneurs and
investment, weak infrastructure facilities, reluctance to increase the production
potential of existing industries have all severely inhibited industrial
development in the state.
● Chronic unemployment- rate of unemployment double that of all India, also
more unemployed women than men (partially due to the displacement of rice
cultivation by more profitable crops), also there is a rise in unemployment
among the educated, this is accompanied by inability of the state to generate
any sizeable employment during the last few decades
 ● Virtually unregulated growth of technical institutions has led to the extreme
shortage of quality teachers at various levels, the degree of availability of
higher education institutions has always been less than the national average in
Kerala.
● Despite high health status indicators, it is a paradox that Kerala has been
identified as the state with highest prevalence of morbidity in India
● Due to the poorly managed irrigation system, the Green Revolution approach
was not as successful in Kerala as it was in Punjab or Gujarat where the grain
production responded better to irrigation.
● major problem facing power projects in Kerala has been delays and cost
overruns, major area of weakness in the hydel power use in the state is
ineffective transmission systems.
● Public sector inefficiency stemming largely from the state’s decision to plunge
into several modern sectors, ignoring the linkages that could have arisen from
common interests if investments had not been thus diffused.
● Divisive politics has undermined Kerala’s economy, hartal has become a
mode of protest for political parties and continues to paralyse everything,
roads, offices, schools and shops. All these obstructions militate against the
growth and development of the state.
● Exposure to international setting- NRI’s, could have accelerated the shift to a
consumerist culture.
● Land reforms may have defragmented land and is often cited as making
agriculture low profit, it also did not consider fisherfolk and Adivasi
communities
● Poor allocation of central funds, funds insufficient to maintain the quality of
life and HDI

Gujarat’s Development model

Gujarat’s Miracle in growth is a well-known success story since the beginning of 21st
century evidently when Narendra Modi took over as chief Minister in 2001. The
devastated earthquake, drought and flood completely ruined the state in the end of
nineties but Modi brought back the state on the path of recovery and development in a
record time of less than three years. This ‘development miracle ‘of the state is the
result of business friendly policies and proactive administration which has led the
state being a preferred investment destination.
Gujarat grew at an average rate of 10.08%. This is better than the national rate of
8.28%. Gujarat lagged behind Tamil Nadu and Maharashtra which also started on a
high base. Maharashtra, despite being more affected by the recession (growth slipping
to 3.38% in 2008-10) also managed to do better than Gujarat over the period.
However, the benefits of industrial development have not really reached the small and
medium units, which were once the standard-bearers of Gujarati entrepreneurship and
growth. Today, 22-25 per cent of such units in the state are sick, much the same as
across the country, “as nothing much is being done for them in Gujarat”. In Gujarat,
the share of service is 46% of GDP, 13% less than the national average.

What was missing from Gujarat was the new economy money, billions of dollars the
rest of urban India is taking from the West. Why is information technology (IT) and
IT-enabled services (ITeS), which is bread and butter for Indian cities, which is absent
from “Gujarat offering relatively lower cost of operations, due to lower cost of real
estate and lower compensation level” KPMG cites two reasons: “a lack of engineering
institutes” and “lack of proficiency in English”. As a mercantile culture, Gujarat has
not needed English because its elite did business and employment was not for the
upper classes, which explains Gujarat’s “lower compensation level”. The lack of
English means Gujarat still doesn’t have a proper middle class as Mumbai, Delhi,
Bangalore do. No white-collar, anglicized, urban Indians. It is why there is little social
mobility for the lower middle class.

Gujarat is the No. 1 state in India when it comes to economic freedom index. This has
meant, inevitably, that the government has abdicated all decision-making powers, as
well as functional and financial control over such projects. Nowhere else in the
country has this abdication of responsibility been so total, nowhere else has the state
given over the economy so entirely to the corporates and private investors.

Gujarat state has an abundance of (so-called) non- productive land, a boon for
companies and a highly urbanised Gujarat is also home to India’s largest business and
trading community

While in large parts of India agriculture is in deep crisis and growing at 2% per
annum, the rate of growth in Gujarat has been over 10%. A major factor for this
consistent growth is the efficiency and speed with which Gujarat government has
worked to spread irrigation. The check dam movement started by a religious leader in
Gujarat has been carried forward in a determined manner by the government.

The biggest reason to question this brand of growth, is the state’s dismal showing in
the sphere of human development.
The per-capita income of the state has more than tripled since the turn of the century.
All the other states have shown nearly similar increments but none could touch
Gujarat. Starting from a per-capita income of Rs 17,227 in 2000-01, Gujarat has than
more than good to reach Rs 52,708 in 2010-11.
Rising per-capita incomes signals people-oriented development only to the extent that
poverty is declining. Growing incomes with rising inequality would imply that the
poor are being left behind. This brings us to a somewhat natural corollary - Gujarat’s
performance in poverty reduction. The states have been ranked from best to worst in
poverty reduction, among the big states with similar (below 40% BPL population)
levels of poverty as Gujarat in 2004-05. Among the 7 states which had a BPL
population of less than 40% in 2004-05), Gujarat ranked 5th when it came to poverty
reduction. In 2004-05, 31.6% of people of Gujarat lived below poverty line. This
came down to 23.0% in 2009-10; a reduction of 8.6%. The performance however lags
Maharashtra and Tamil Nadu who managed to reduce their BPL population by 13.7%
and 12.3% respectively. Even Rajasthan beat Gujarat by reducing its poverty rate by
9.6%.

Consider this state in India: As much as 44.6 per cent of its children are malnourished.
While Infant mortality rates have gone down, its decline has been slower than the
national average. More than 65 percent of its rural households and 40 per cent of its
urban ones do not have access to latrines and they use open spaces for defecation. The
state has 918 women for every 1,000 men, well below the national average. Poverty
amongst urban Muslims is eight times School enrolment is up to 95 per cent in rural
Gujarat, but learning levels remain shockingly low. Fifty-five per cent of rural
students in the fifth standard cannot read a second standard level text, and 65 per cent
of these students cannot do simple subtraction.
The state is Gujarat, but you would have perhaps never imagined these dismal
statistics, considering the state’s high growth trajectory

Tamil Nadu’s Development model

The importance of Tamil Nadu stems not just from its large contribution to the
national economy, but also from its unique growth trajectory. Unlike Kerala, which
has superior human development outcomes but has struggled to industrialize or
Gujarat, which industrialized fast but has struggled to improve social outcomes, Tamil
Nadu managed to have the best of both worlds over the past decades. the exceptional
long-run performance of Tamil Nadu in combining industrial dynamism with
egalitarian welfare policies needs to be acknowledged.

Since the early 1990s, when India undertook economic liberalisation and Jayalalithaa
first came to power in Tamil Nadu, both Gujarat and Tamil Nadu have maintained
consistently high economic growth rates. Even though Gujarat has grown slightly
faster, the gap between the two has been consistently growing narrow.

Tamil Nadu’s success was owing to two key factors.

● First, the early rise of Dravidian parties, which represented a coalition of lower
castes and classes, enabled the state to shun the patronage-based politics
typically associated with the Congress party. This allowed public spending to
be more widely directed than in other states, focusing largely on public goods.
o The state’s PDS system, with timely distribution and lower corruption,
also became a model for the country while significantly impacting
rural poverty in the state. The universalism of all public amenities and
schemes has played a significant role in reducing leakages and
enhancing impact. As a result, very few have been deprived of the
basic amenities of life in the state
o On the healthcare front, the state has a clear commitment to free and
universal healthcare covering a wide range of facilities and services.
The state has also set up a computerised supply chain to ensure timely
supply of free medicines in all government-run clinics.
The political focus on healthcare and education in Tamil Nadu is also evident
from the state’s per capita expenditure in these areas, which is one of
the highest in the country. It is also interesting to note that these issues
feature in election campaigns in the state, in contrast with the rest of
the country.
o Tamil Nadu was also the first state to introduce free and universal
midday meals in primary schools, which became a model scheme for
the entire country.
● Second, despite frequent regime changes, the state’s policy towards investors
and investments remained stable and predictable.
Other characteristics
● Dealing with social inequality has also been an important part. In Kerala and
Tamil Nadu, principles of equal citizenship and universal entitlements were
forged through sustained social reform movements as well as fierce struggles
for equality on the part of underprivileged groups – especially Dalits, who
used to receive abominable treatment and have to continue their battle to
reverse the old handicaps altogether.
● These experiences of rapid social progress are not just a reflection of
constructive state policies but also of people’s active involvement in
democratic politics. The social movements that fought traditional inequalities
(particularly caste inequalities) are part of this larger pattern. These social
advances, the spread of education, and the operation of democratic institutions
(with all their imperfections) enabled people – men and women – to have a say
in public policy and social arrangements, in a way that has yet to happen in
many other states.

Over the past few years, things have changed though. As Dravidian parties gained
greater leverage over national policies and allocation of federal resources, the
incentive to follow a self-sustaining public expenditure model has waned, with
populism witnessing a sharp ascendancy.

Like its East Asian counterparts, the state’s deep links with the global economy has
contributed to the downturn. Yet, its economic woes are largely home grown. The
state’s inability to raise power tariffs over the past seven years has bled both the state
exchequer and the state-owned power firms dry even as growing power outages are
turning export hubs such as Coimbatore into industrial wastelands. Ballooning power
subsidies, a growing wage bill and a rising tendency to blow away public resources on
various freebies ranging from laptops to grinders have constrained state investments
on infrastructure.

Analysis and Conclusion

Although Kerala Model and Gujarat Model are contradictory to each other, both have
their strengths. Gujarat, a high-income state in the country is a step ahead to Kerala in
income per capita. It's policies for encouraging industrial growth and foreign
investment put Gujarat in a better position, but at what cost is yet to be understood.
Kerala has superior statistics with respect to human development factors like health
and education, poverty alleviation, while Tamil Nadu seems to balance economic
growth with human development indices.
Although women have better equality in Kerala, crime rate against women and
children and suicide rate in Gujarat are lower.
Kerala and Tamil Nadu struggle in generating efficient power supply which can
handicap growth in the secondary sector.
Gujarat's political climate is such that the BJP win by appealing to the middle class
and neo- middle and seems atypical of increasingly capitalist economy. This is seen in
lowering of workers wages

Can economic growth be called development if its not for the masses? The success of
Kerala and Tamil Nadu in the social factors could be due to the type of political
parties and the type of
References

Even though the ‘Gujarat model’ cultivates social polarisation, Narendra Modi was
able to win elections three times in the state for two major reasons. First, the main
casualties of this political economy have been Muslims, Dalits and Adivasis, who do
not represent more than 30 percent of society. Second, the beneficiaries of this
‘model’ were not only the middle class, but also a ‘neo-middle class’ made up of
those who have begun to be part of the urban economy or who hope to benefit from
it—the ‘neo-middle class’ is primarily aspirational. These groups were numerous
enough to allow Modi's BJP to win successive elections in Gujarat. The BJP got more
than 50 percent of the votes only once, in 2002, but the main party can get an absolute
majority with less in a first-past-the-post system. While the BJP is known for its
expertise in religious polarisation, this is clearly a case of social polarisation in which
the ethno-religious identity quest of the middle and neo-middle classes continues to
play a role.