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Kerala, renowned for its exceptional social indicators like world-class education and health, faces a persistent paradox of low per capita income despite high human capital, prompting a critical examination of its economic model. While the state has excelled in investing in its people, leading to high literacy and life expectancy, it struggles to translate this educational dividend into sustained domestic economic growth, with capital generation largely occurring elsewhere and only partially returning through remittances, a situation exacerbated by significant challenges in the ease of doing business. Despite impressive official Ease of Doing Business rankings, the article highlights that actual ground realities for businesses are hampered by arbitrary inspections, unpredictable enforcement, delayed approvals, and weak contract enforcement, suggesting the current "reforms" are input-focused rather than outcome-driven. To foster genuine prosperity, the article proposes three key market infrastructure interventions: implementing high-frequency public perception surveys to accurately gauge business sentiment, creating a payment registry to promote timely payments to MSMEs through transparency, and fixing land records to unlock credit and facilitate investment, arguing that strengthening basic market infrastructure for small businesses is crucial for realizing the state's economic potential.
On average, Indians buy 0.6 g of gold per person annually—three times the global average of 0.2 g
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