The year 2019 was a year of subdued growth all around – global, national, and State. The world output grew by 2.9 per cent in 2019 as compared to 3.5 per cent in 2018. World economy moved into recession, worse than the one faced during the financial crisis in 2008-09. The national growth rates also plummeted to 4.2 per cent in 2019-20 from 6.1 per cent in 2018-19. Kerala’s GSDP growth, which exceeded national rates in 2018-19 and grew at 6.49 per cent declined in 2019-20.

According to the quick estimates, Kerala’s Gross State Domestic Product (GSDP) at constant (2011-12) prices is ₹5.68 lakh crore in 2019-20 as against the provisional estimate of ₹5.49 lakh crore in 2018-19. At current prices, the GSDP is estimated at ₹8.54 lakh crore (quick estimate) in 2019-20 as against the provisional estimate of ₹7.90 lakh crore in 2018-19, showing a growth rate of 8.15 per cent.

In terms of Gross State Value Added (GSVA), the quick estimate at constant (2011-12) prices is ₹5.01 lakh crore in 2019-20 as against the provisional estimate of ₹4.89 lakh crore in 2018-19. The growth rate of GSVA is only 2.58 per cent in 2019-20 compared to 6.2 per cent in 2018-19. However, it may be noted that the average rate of growth for the years 2016-17 to 2019-20 (5.4 per cent) was higher than the average rate of growth for the previous four years, 2012-13 to 2015-16 (4.8 per cent).

Kerala’s growth rates that were higher than national rates of growth saw a downward trend in 2019-20. The reasons for this decline in growth rate are the consequence of the setbacks that the State economy has faced over the last three years. The State was hit by Cyclone Ockhi in 2017, and by severe floods resulting from extreme rainfall events in 2018 and 2019. The natural disasters ravaged the State economy affecting the lives and livelihoods of many and adversely affecting productive sectors of the economy.

The downward pressure on growth rates has been aggravated with the crisis caused by Covid-19 pandemic and consequent lockdown. World economy is projected to shrink by 3.2 per cent in 2020. The first quarter (April to June 2020) estimates of all India GDP growth show a contraction of 22.8 per cent. The State Planning Board conducted an assessment of losses to Kerala’s economy because of Covid-19 pandemic and it was estimated that in the first quarter of 2020-21, the GSVA will shrink by 26 per cent.

Adding to the economic woes of low growth rates are the rising prices. Inflation remained benign during the first half of 2019-20 but exceeded the upper tolerance band around the target during December 2019-February 2020 on the back of rising food price pressures. Inflation as measured by Consumer Price Index numbers hovered around 6 per cent to 7 per cent in 2020. The State Government took proactive measures to provide commodities to consumers at fair prices with the help of co-operative institutions like Supplyco and Consumerfed.

The growth of value added in agriculture and allied sectors in Kerala continued to remain slow or negative for most of the period between 2011-12 and 2018-19. The rates of growth were (-)2.38 per cent and (-)6.62 per cent in 2018-19 and 2019-20 respectively.

As per the land use data of 2019-20, out of a total geographical area of 38.86 lakh hectare (ha), total cultivated area is 25.89 lakh ha (66.64 per cent) and the net area sown is 20.26 lakh ha (52.13 per cent). Land put to non-agricultural use stands at 11.73 per cent and forest area is 27.83 per cent. The cultivable waste and current fallow constituted 2.57 and 1.48 per cent respectively. The total cropped area and area sown more than once increased by 0.73 per cent and 4.92 per cent respectively as compared to 2018-19. Similarly, the cropping intensity has also increased from 126 per cent to 128 per cent.

In 2019-20, the production and productivity of paddy increased by 1.52 per cent and 5.24 per cent respectively compared to 2018-19. In fact, the highest productivity of 3073 kg per ha over the last ten years was recorded in 2019-20. The area under upland rice also increased by 46 per cent. Vegetable production in the State in 2019-20 was 14.9 lakh tonnes recording an increase of 23 per cent as compared to 2018-19. The increase in area and production of vegetables in the State can be attributed to the support provided through the vegetable development programmes implemented by the State Department of Agriculture Development and Farmers Welfare, Vegetable and Fruit Promotion Council, Kerala, State Horticulture Mission, Local Self Government Department and Kudumbashree.

As in all sectors, the Covid-19 pandemic affected agriculture in multiple ways – global trade came to a halt during lockdown, domestic prices of most agricultural crops fell sharply, and there was shortage of human power affecting the functioning of a number of processing units. The Government intervention was quick to ease the bottlenecks. To address issues related to food security, the Government announced the Subhiksha Keralam programme with focus on increased food production by enhancing the area under cultivation and adopting innovative technologies.

The role of financial institutions becomes all the more crucial when an economy is in a recession as credit is needed to sustain viability of agents and facilitate economic recovery. As constraints on fiscal space of Governments increase, interventions through financial institutions are part of steps to support the economy. There has been an increase in agriculture credit flow from ₹54,270 crore in 2016-17 to ₹73, 034 crore in 2019-20.

The co-operative movement in the State has got a fillip with the formation of Kerala Bank. The Bank operates through a network of 769 branches with head office at Thiruvananthapuram, Corporate Business and Liaison Office at Ernakulam, seven regional Offices, Credit Processing Centres (CPC) at each District headquarters and Branch Offices across the State. Co-operatives have been at the forefront in providing various forms of support to the people in the form of housing, health care, social security pension and financial assistance.

Compared to the last two censuses (showing a trend of declining population), 20th Livestock Census shows one per cent increase in cattle population, 9 per cent increase in goat population, and 25 per cent increase in poultry population. A significant development in this sector is the introduction of Emergency Veterinary Service during night hours at block level. This service is currently provided in 125 blocks of the State, with 20 blocks added in 2019-20. The services will be extended to all blocks in 2021-22.

The total fish production of Kerala in 2019-20 is 6.8 lakh metric tonnes with a contribution of 4.75 lakh metric tonne from marine sector and 2.05 lakh metric tonne from inland sector. But the growth momentum seen in 2018-19 did not continue in 2019-20. In 2018-19, the total fish production was 8.02 lakh metric tonnes. However, efforts are being made to improve the quality of fish seeds and as a consequence in 2019-20 the area utilised for fish farming in ponds has increased from 5325 ha to 5700 ha, number of cage culture units have increased from 80 to 1800, mussel farming units have increased from 2000 to 3500, recirculatory aquaculture system/aquaponics units have increased from 100 to 500, one paddy one fish farming area has increased from 1620 ha to 2500 ha and zero water exchange shrimp farming was carried out in 200 ha area.

The net irrigated area has increased from 4.04 lakh ha in 2018-19 to 4.09 lakh ha 2019-20. A significant milestone with regard to water resources has been the commissioning of Muvattupuzha Valley Irrigation Project in 2020.

Forest Conservation and afforestation campaign in the State has shown results. The forest cover of the State has increased during the second consecutive assessment period also, thereby enabling the State to occupy third position in terms of increase in forest cover, as per India State of Forest Report 2019. As per the report, the total area under forests, including plantations is 21,144 square km which is 54.42 per cent of the geographical area of the State. There has been an increase in forest cover in Kerala by 823 square km, an increase of 2.12 per cent, as compared to previous assessment in 2017.

Conservation and preservation of environment have been central to all developmental efforts in the State. Haritha Keralam Mission has made focused efforts for water conservation and waste management. A novel project was started in 2019 by Haritha Keralam Mission with the objective of creating 1000 green islets (Pachathuruth) to preserve local biodiversity. The Mission has already completed 1261 green shoots at various places in the State.

The Government took special efforts in ensuring food security through the extensive network of its public distribution system, particularly in the current pandemic crisis period. In pursuance of the National Food Security Act 2013, the entire ration card data in the State are digitalised and Aadhaar seeding of beneficiaries in the State is nearing completion. Inter State portability of ration card is in force in the State as a part of the implementation of ‘One Nation One Ration Card Programme.’ The number of ration cardholders in the State increased from 87.1 lakh in 2019-20 to 87.9 lakh in 2020-21 (as on August 2020). The Government incurred ₹200 crore on various card holders as subsidy in 2019-20. In the wake of the Covid-19 pandemic, the Government distributed essential articles as a kit named ‘Athijeevana Kit’ which included 17 items. The items costing ₹972 per kit was distributed to 87.9 lakh families in the State free of cost. In addition to the above, free ration to the tune of ₹300 crore was distributed to all categories of families. A quantity of 5 kg rice or 4 kg atta per person was distributed to migrant workers free of cost.

There has been a steady increase in the size of Kerala’s manufacturing sector, in value terms, especially so over the last four years. The share of manufacturing in Kerala’s GSVA increased from 9.8 per cent in 2014-15 to 12.5 per cent in 2019-20. As per quick estimates of Kerala’s Gross State Value Added (GSVA), the manufacturing sector of Kerala grew at 1.5 per cent at constant prices (2011-12) in 2019-20. The shares of manufacturing sector to GSVA in Kerala at constant and current prices in 2019-20 were 12.5 per cent and 10.1 per cent respectively.

Kerala Micro Small Medium Enterprises Facilitation Act 2019 and the rules made therein under section 14 of the Act is one of the key initiatives under the Ease of Doing Business Reforms of Industries Department for establishing and operating MSME units. In 2019-20, 13,695 MSMEs started with an investment of ₹1,338.65 crore and created 46081 employment opportunities. One of the significant developments is the launching of Kerala e-market portal to help and facilitate micro, small and medium enterprises, and public sector undertakings to expand their business in the national and international markets.

The pandemic and the consequent lockdown affected MSMEs adversely. MSMEs were plagued by both demand and supply side issues. The number of units started, investment and employment has drastically declined as per the estimates taken for the first eight months of 2020 as compared to the corresponding months of 2019. To mitigate the impact of the pandemic, the Government introduced
Vyavasaya Bhadratha scheme to revive MSMEs in the State.

A sector which has seen a tremendous change is the coir sector. Exports from Kerala State Coir Corporation and Foam Mattings (India) Limited along with Coirfed has been increasing continuously since 2015-16. In terms of value of exports, it has increased to ₹1425.86 lakh in 2019-20 from ₹1072.55 lakh in 2016-17. Through the operation of new defibering units, the husk utilisation in the State has risen from
12.5 per cent to 14.8 per cent. In 2019-20, the coir yarn production in co-operative sector has increased to more than 20,000 MT from about 7,800 MT in 2015-16.

Kerala has been successful in creating and encouraging a startup ecosystem in the State. Currently among startups, Kerala is ninth in the country with 1292 active startups. As per the Nasscom report on startups, Gujarat took the Best Performer ranking, while Karnataka and Kerala are top performers. Under the banner of Kerala Startup Mission and several of its sector-specific partner organisations, there are presently more than 2,500 registered start-ups with more than 4 lakh square feet of incubation space, ₹1,500 crore investment, value creation of ₹1,00,000 crore and providing employment to 25,000 persons.

With a view to identify and implement programmes to achieve excellence in science and technology within the State and to provide service to the society at large, the Kerala State Council for Science, Technology and Environment has been implementing various schemes and programmes focusing on science popularisation and promotion, research and development, ecology and environment, technology development and transfer, biotechnology development, school level promotional activities and science programmes for women. The Institute of Advanced Virology, inaugurated in October 2020, is affiliated to the Global Virus Network, which has 45 centres of excellence in over 29 countries.

Tourism sector rebounded strongly in 2019 after the 2018 floods and witnessed 8.52 per cent growth in foreign tourist arrivals and 17.81 per cent growth in domestic tourist arrivals as compared to 2018 figures. The foreign exchange earnings from tourism in the year 2019 was ₹10,271.06 crore and domestic tourist earnings was ₹24,785.62 crore. Total earnings including direct and indirect means in 2019 was
₹45,010.69 crore showing an increase of 24.13 per cent over 2018. One of the sectors that is the hardest hit by the Covid-19 pandemic is the tourism sector. The loss in earnings in tourism is in the range of ₹20,000 crore to ₹25,000 crore over the nine months of 2020. The Government has announced Covid loss assistance scheme to support the stakeholders in the tourism industry for the revival of the tourism sector.

Niti Aayog, Government of India has developed the first-ever Export Preparedness Index (EPI) for Indian states. The Index ranks States and Union territories on critical parameters required for promoting the country’s exports. Export Preparedness Index 2020 examines the export ecosystem of Indian States and Union Territories. The Index includes four pillars and eleven sub-pillars. The four pillars are (i) Policy, (ii) Business Ecosystem, (iii) Export Ecosystem and (iv) Export Performance. Kerala is ranked 10th in the overall ranking with a score of 54.11. Kerala is the only State that has performed exceedingly well in export diversification. However, as per the index, export ecosystem is weak in the State.

Education and Health sector in the State has seen a tremendous change in the last four years. School infrastructure has been upgraded. 141 higher secondary schools have been made ‘centres of excellence’ using the KIIFB fund of ₹5 crore each. Infrastructural facilities in 395 schools have been upgraded with the allocation of KIIFB fund of ₹3 crore each. KITE has converted 45,000 classrooms as Hi-Tech (standard 8 to 12) in 4,752 Government and Aided schools in the State. The initiative of KITE in ensuring smooth conduct of classes on digital mode during the Covid-19 pandemic has been exemplary.

Kerala’s health sector has been a model for other States of India not only in terms of gains in the sector but also in dealing with public health exigencies. The health system rose to the occasion in dealing with the Nipah virus in 2018 and 2019 and the present Covid-19 pandemic. It is well known that the State has made significant gains in health indices such as high life expectancy, infant mortality rate, birth rate, and death rate. In fact, it is the strong public health system in the State that made it possible to deal with the Covid-19 pandemic so effectively. The Aardram Mission has transformed the health infrastructure in the State. A significant step taken by Government in the health insurance sphere is the formation of the State Health Agency in July 2020. From July 1, 2020, the Karunya Arogya Suraksha Padhathi scheme is implemented under assurance mode for the entire ₹5 lakh coverage. KASP converges all the Government sponsored health insurance schemes namely, Rashtriya Swastha Bima Yojana (RSBY), Comprehensive Health Insurance Scheme (CHIS), and Senior Citizen Health Insurance Scheme (SCHIS). The scheme covers 41.41 lakhs families.

Kerala is known for the investment that it makes in its people to improve their wellbeing. In this regard, one of the major interventions has been in the field of pensions. The number of social security pensioners in the State is 49.14 lakh. The old age pension has increased from ₹600 in 2015 to ₹1400 in 2020. The Government is taking special efforts for the elderly, persons with disabilities and the transgenders.

Gender budgeting continues to be a core feature of Kerala’s Budget. In 2020-21, an amount of ₹1509.33 Crore (7.3 per cent) has been provided for women specific schemes (Part A) and an amount of ₹2300.54 (11.1 per cent) for composite schemes in Part B has been made available for women. A total amount of ₹3809.87 crore constitutes the Gender Budget for 2020-21 (of which ₹5 crore is earmarked for Transgender persons) which is 18.4 per cent of the total State Plan outlay. The Government’s policies are oriented towards gender equality and empowerment. To support women affected by violence, in private and public spaces, within the family, community and at the workplace, One Stop Centres (OSCs) are functioning in the State. Kerala is one of the first states in India to have One Stop Centres in all the districts.

Kerala is known for its labour friendly policies. The support extended to guest workers at the time of pandemic is noteworthy. The Department provided food and shelter to the guest workers. Steps were taken to address their grievances.

As per the Periodic Labour Force Survey Report 2018-19, Labour Force Participation Rate in Kerala has improved as compared to figures reported in the survey results of 2017-18. The Labour Force Participation Rate has increased from 36.6 per cent in 2017-18 to 39.5 in 2018-19. A striking feature of the latest survey is a considerable increase in female workforce participation rate in Kerala from 16.4 per cent in 2017-18 to 20.4 per cent in 2018-19.

The unemployment rate in the State has declined from 11.4 per cent in 2017-18 to 9 per cent in 2018-19 as per the Periodic Labour Force Survey Report (PLFS) 2018-19. The Unemployment rate is much higher among females (17.1 per cent) as compared to males (5 per cent). The unemployment rate was 4.7 per cent among males and 15.6 per cent among females in rural areas, while the rates were 5.2 per cent among males and 18.8 per cent among females in urban areas.

Skill development has been one of the foremost objectives of the Government. Upgradation of Industrial Training Institutes (ITIs) has been a core area of emphasis. Ten ITIs are being upgraded using KIIFB funds. The Government runs technical exchange programme for ITI trainees. Naipunya Karmasena, which was started as a temporary measure after the floods of 2018 has now become a permanent part of the Government.

Efforts are being made to promote sports in the State. Sports Life Fitness Centres have become operational at nine locations in the State. G.V. Raja Senior Secondary Sports School in Thiruvananthapuram has been selected by the Ministry of Youth Affairs and Sports, Government of India for upgradation to Khelo India State Centre of Excellence (KISCE) under the Khelo India Scheme. The KISCE are being established to strengthen India’s pursuit for excellence in Olympics.

Non-resident Keralites play an important role in the development of the State. However, the trend of return migration is increasing over the last few years. The number of return emigrants estimated by Kerala Migration Survey 2018 is 12.95 lakh, about 60 per cent of the number of emigrants. This has increased further by the crisis caused by the Covid-19 pandemic. The Government has initiated new programmes to reintegrate NRKs and provide assistance to those who have been adversely affected by the pandemic.

Infrastructure development has been a priority for the State. Substantial progress has been made in the construction of roads. Kollam bypass has been completed and inaugurated. Alappuzha bypass work is expected to be completed soon. Construction of Hill Highway and Coastal Highway is progressing. Kerala Highway Research Institute is being upgraded as Centre of Excellence to focus on areas such as innovation in design and construction practices, road asset management, road safety management, quality assurance and contract management and promoting indigenous research and development. Kerala is poised to become the first State in the country to deploy electric vehicles (EVs) for enforcement activities. The Motor Vehicles Department (MVD) has placed orders for ‘plug-in electric vehicles’ for 65 Enforcement Squads of the Safe Kerala project for enforcing motor vehicles rules and to ensure road discipline. Kerala Automobiles Limited (KAL) is the only Public Sector Undertaaking (PSU) having got the Central Motor Vehicle Rules (CMVR) certification for electric autos. KAL has enhanced its production capacity from 7,200 units to 15,000 units per year.

The Rebuild Kerala Initiative has started gaining ground. Sectors taken up under RKI include roads and bridges, sanitation, water supply, livelihoods, forest, agriculture, fisheries, and animal husbandry. As on October 2020, projects amounting to ₹7,000 crore have been sanctioned. A significant push to infrastructure projects is provided by Kerala Infrastructure Investment Fund Board. The total outlay of projects approved by KIIFB as on March 31, 2020 is ₹54,391 crore. Out of the total 679 projects approved, 675 projects pertain to infrastructure and 4 projects relate to industrial infrastructure. In 2019-20, ₹3,502 crore was disbursed to various projects. The total disbursement till March 31, 2020 is ₹5,014 crore.

Provision of housing to all has been the objective of the Government. With this objective, the Government started the LIFE Mission, a focussed initiative to address the issue of housing in the State. As on December 1, 2020, 2,43,522 houses has been completed under the Mission.

Local Governments have become important and strong institutions of governance in the State. Significant improvements have been made in overall planning and implementation process. To mitigate the impact of frequent natural disaster and climatic variation and to improve the disaster preparedness, for the first time in the country, the Local Governments in Kerala have prepared the Disaster Management Plan during January to March 2020. Local Governments conducted a Decentralisation Round Survey, which is a data collection and dissemination system for supporting the local level planning in Kerala. To ensure greater transparency, accountability, accuracy, punctuality and technical supervision in providing various services to the citizens given by Local Government, Integrated Local Governance Management System (ILGMS) has been deployed across 150 Grama Panchayats in October 2020. Local Governments played a key role in containing as well as tackling Covid-19 pandemic.

Livelihood schemes have been the core feature of the State Plan and embedded in the Plan programmes. In 2019-20, 8.02 crore person days was generated under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). The urban counterpart in the State, Ayyankali Urban Employment Creation Scheme generated 26 lakh person days of employment in 2019-20. The role played by Kudumbashree in the socio-economic development of the State deserves a special mention. Kudumbashree has become a major provider and supporter of livelihoods in the State, in particular, livelihoods for women. Kudumbashree is spearheading the Resurgent Kerala Loan Scheme providing support to more than 2 lakh people through 30,000 NHGs. Several initiatives have been promoted by Kudumbashree under the Special Livelihood Development Package.

Welfare of Scheduled Caste and Scheduled Tribes has been paramount for the State. The Government has made significant interventions in the sphere of housing, health, education, livelihoods, and infrastructure development. 4,225 landless SC families were assisted under the land to landless scheme in 2019-20. Assistance was provided to students for studying abroad. 4,556 Padanamuris were constructed for SC students. Since 2016-17, 4698 tribals were provided 3799.67 acre of land. In addition to the existing 150 community study centres, 100 centres were started for providing tuition and e-learning facilities among the tribals. Under Millet Village scheme, 1,256 farmers were benefitted by harvesting in 400 ha. In addition to this, 1211 farmers cultivated 1671 acre under the project Nutrition-Sufficiency in Food through Agroecology in Attappady.

The Government’s policies in 2019-20 were a continuation of its efforts to promote growth along with social protection. However, all the activities received a big jolt with the Covid-19 pandemic. The Covid-19 pandemic affected economies all over the world, including Kerala. The first case of Covid-19 in India was reported in Kerala on January 30, 2020. The States’s health machinery responded to the crisis swiftly and all wings of Government swung into action to ensure that people at large are not deprived of basic necessities of life. Kerala has again shown the world the power of public action in delivery of services. The State’s handling of Covid-19 pandemic has received worldwide acclaim. Kerala’s unique strengths of a well-established public health care system and decentralised governance have significantly contributed to the effective handling of the pandemic. Kerala was also the first State in India to announce an economic package of ₹20,000 crore. The Government has taken steps to ensure food security, extended support to guest workers, announced revival measures to support livelihoods, and prioritised expenditure so as to channelise scarce resources to the most productive use.

To sum up, the Government has successfully implemented policies and programmes to promote productive forces in the economy, promote gender justice, and ensure wellbeing of the people.