The News

The News
Kerala, the first state in southern India, to be visited by 15th Finance Commission from 28th to 31st May 2018.

News Summary
• Kerala is the first state in the southern India that will be visited by the Fifteenth Finance Commission.
• The Commission along with other officials will assess the state of the finances of Kerala and the progress made in socio-economic field.
• The Finance Commission needs to make an in-depth study of the recent developments and future possibilities of economic growth and development of Kerala.

Details
• Kerala has been one of the most developed and progressive states in terms of development indicators like poverty ratio, health parameters, education parameters as well as per capita income.
• Kerala scores better in almost all aspects vis-à-vis national averages.
• Kerala’s literacy level is the highest amongst all the states at 94% of the population. However, learning outcome is not commensurate.

Other details
• Kerala is the 10th largest economy in India and contributes around 4.2% of India’s GDP.
• Its GSDP growth rate was around 7.4% at constant price in 2016-17. State has one of the highest per capita GSDP and per capita income.
• In the absence of a substantive pick up in agriculture and manufacturing, the Kerala economy is largely supported by a booming service sector.
• The high wages (above national average) (both male and female field labour) has a bearing on cultivation and other economic activities.
• NRI remittances have a major role to play in Kerala’s economy. Emigration and emigrant’s remittances continue to sustain much of the Kerala economy.
• Other activities in the State, particularly, in the fields of trade, real estate, and construction are also weakened by any decline in foreign remittances.
• Population in the working age group 15-59 years have been growing at lower rate. Hence, due to increased life expectancy and better healthcare, population above 60 years of age will be larger in near future. Therefore, social security spending of the State government will be a matter of concern.
• Kerala is somewhat different from the other South Indian states in that the mainstay of the public transport system in the state is the private stage carriages (PSC). Whereas PSC is a very small percentage of the total number of stage carriages in Andhra Pradesh, Karnataka and Tamil Nadu, it accounts for about three fourths of the total number in Kerala.