After the initial post-COVID surge, Kerala's economy has settled into a steady growth of 6.6% in 2022.23. Its debt has also shown signs of decline.
These positive signals were revealed in the Economic Review (ER) 2023, which was tabled in the Assembly on Friday as a precursor to the presentation of the Kerala Budget on February 5.
During the pandemic of 2020-21, Kerala had suffered a massive lockdown-induced slowdown of negative 8.49%. Next fiscal, during 2021-22 when the economy reopened, Kerala bounced back quite dramatically with a GSDP (Gross State Domestic Product) growth of nearly 13%. Now, in 2022-23, the growth has steadied to 6.6%, which is higher than the national average of 5.9%.
Value addition
The Gross State Value Added (GSVA) has also taken a similar trajectory. In 2020-21, it fell more than even the GSDP to negative 9.91%. And from there it soared to 12.74% (2021-22) and then settled at 6.19% (2022-23).
The GSVA is the value added in various growth sectors. It is the value of the output minus the value of its inputs. The GSDP is GSVA plus the difference between the taxes earned and the subsidies provided by the state government. In other words, GSDP is the total value of goods and services produced during any financial year within the geographical boundaries of a state.
Easing debt burden
Kerala's outstanding public debt at the end of 2022-23 was Rs 2.38 lakh crore. The annual growth rate of public debt decreased to 8.19% in 2022-23 from 10.16% in 2021-22. The Public Debt-GSDP ratio also decreased from 23.54% in 2021-22 to 22.75% in 2022-23. The total outstanding liabilities of the State, which was 35.92% of the GSDP in 2021-22, fell to 34.62% in 2022-23.
Sectoral changes
The ER, after taking stock of the Kerala economy, states that agriculture and allied activities constituted 8.98% of GSVA
during 2022-23, lower than last fiscal's 9.39%. There has been a large-scale withdrawal of workers from agriculture over the years and its share in total workforce participation is 27.27% in Kerala.
Secondary sector accounted for 28.40% of the GSVA in 2022-23, marginally higher than last fiscal’s 28%. In this, construction was the biggest component (13.79%) and manufacturing came close behind at 13%. The manufacturing sector absorbs 10.91% of Kerala's workforce.
Tertiary sector accounted for 62.62% of Kerala's GSVA, same as last fiscal. The biggest contributors to value addition in this sector were: real estate, ownership of dwelling and professional services (16.96%) and trade and repair services (15.67%).
Inflation in Kerala
In Kerala, inflation based on CPI (Consumer Price Index)-Combined stood at 4.59%, lower than the national average of 5.02%. In Kerala, inflation was higher in urban areas (4.93%) than in rural areas (4.59%).
Wages and gender parity
According to the ER, the average daily wage rate of skilled workers in the agriculture sector in Kerala has increased consistently over the years. Daily wages of carpenters, for instance, have increased from Rs 973.03 in 2021-22 to Rs 1,015.73 in 2022-23, a 4.39% increase. Similarly, the daily wage rates of masons increased from Rs 978.45 in 2021-22 to Rs 1,018.46 in 2022-23., a 4.09% increase.
The average daily wage rate of male unskilled workers (paddy field workers) in the agricultural sector in 2021-22 was Rs 781.75 and that of female unskilled workers was Rs 577.73. By 2022-23, the wage rate of male workers had increased by 1.34%, touching Rs 792.20.
However, female wages increased at a much higher rate, at over 6%, and reached Rs 612.58 in 2022-23. The gap between average wage rates of male and female paddy field workers decreased to Rs 179.62 in 2022-23 from Rs 204.02 in 2021-22.
Poverty eradication
Kerala has identified 64,006 extremely poor households (1,03,099 individuals). The ER observed that out of these 64,006, 75% belonged to the general category, 20% to Scheduled Caste, and 5% to Scheduled Tribe categories.
The survey conducted by Kerala revealed that a greater proportion of the extremely poor were concentrated in rural regions, with 81% of them living in Grama Panchayats, 15% in Municipalities, and 4% in Municipal Corporations. Malappuram district with 8,553 families had the highest number of extremely poor families, accounting for 13.4% of the extremely poor in the State. This was followed by Thiruvananthapuram with 11.4% of the extremely poor households. Kottayam had the least number, 1071 families.
As per the latest status report released by LSGD, 47.89 per cent of the extremely poor households identified have come out of extreme poverty.
