Kerala economy: The NRI money pile

This post is inspired by an article on NRI remittances to Kerala in the Malayala Manorama of December 27. The thought provoking piece is written by C Sarathchandran who is Advisor to the World Bank – Indian Operations. You could possibly access it on Manorama Online.

The writer points out that 1.8 million Keralite NRIs (Non-Resident Indians) who work in other countries without the pressures of the political ideologies that plague their home state remitted Rs.64,400 crores in 2006. How much is that in US money? $16.1 billion? The estimated income in the current Kerala budget is only Rs.21,000 crores!

What happens to this colossal amount? Only a fraction of it is used in the state and the rest goes to other parts of India. The explanation for this is the dearth of bankable projects in Kerala. Why is it so? One reason is that Keralites generally lack entrepreneurship. They are still oriented towards land and in building fabulous houses with their hard earned money.

The second reason is that most Keralites do not feel secure about investing in industrial ventures in their State. The major contributing factor for this apprehension seems to be the State’s history of industrial unrest. Since Apollo Tyres in the late 1970s, has another private sector project of that magnitude come up in Kerala?

The successful implementation of the Apollo Tyres project was made possible, apart from other factors, because of the total cooperation by the State Government led by C Achutha Menon and the people of the State. In the equity base of Rs7.5 crores, the State Government invested Rs.50 lacs and individuals Rs.50 lacs more, under the Promoters’ Quota.

The approximately 100 acres of land identified for the project at Perambra, Trichur District belonged to forty-two people. A Special Thahasildar was appointed for land acquisition. The owners were magnanimous in giving us advance possession of their properties. Construction started even before the land acquisition process was completed.

In an era when ‘Single Window Clearance’ was unheard of, TV Thomas, the then Industries Minister convened a meeting of all Department heads, with the full support of the Cabinet. He instructed that Apollo Tyres files should be given top priority. Not a single hitch came up during the project implementation.

There was a time like that in Kerala – just three decades back, when so much money was not floating around.

What about today?

Ends.

Also see:

Quo Vadis, Kerala?