The Model at the crossroads The role of planning and social oversight in the economic development of the State needs to expand further sector (which includes manufac- pay a portion of its revenue from workforce. turing, construction, etc.) also ex- the motor vehicle tax and the pe- perienced significant growth; the troleum cess to the KIIFB every Competing visions proportion of the workforce en- year. The idea is that higher capi- The Left Democratic Front’s ambi- gaged in the secondary sector, tal investments would help stimu- tious vision of the future of the which was 20% in 1987-88, grew to late economic growth, which Kerala economy is reflected in its Subin Dennis 32% in 2018-19. would in turn lead to higher tax re- manifesto. It lays much emphasis While Kerala’s per capita in- venues as well. on substantially raising enrolment come was almost 10% lower than in higher education along with im- ill the CPI(M)-led Left De- the all- figure in 1989-90, it The real risks proving its quality, and on foster- mocratic Front (LDF) be was 65% higher than the all-India Concerns have been raised wheth- ing the systematic application of Wre-elected in the upcom- figure in 2019-20. er Kerala is taking on unsustaina- science and technology in a range ing polls in Kerala, or will the Con- During this period, Kerala’s VIBHU H. ble levels of debt. The KIIFB loans of sectors. How the benefits of the gress-led United Democratic Front education and health indicators possible. Apart from schools and are not part of public debt, and growth that will occur would be (UDF) return to lead the govern- continued to improve, and its so- hospitals, KIIFB funding is being even if they are included, they distributed across different sec- ment? The election results will cial security programmes conti- used to build economic infrastruc- would make only a marginal diffe- tions of society will depend, have a major bearing on the path nued to expand. But public ture such as roads, bridges, indus- rence to the stock of outstanding among others, on the intervention of development that the State schools and public hospitals often trial parks, the massive public sec- debt. Data show that there have of various organised sections of would take in the coming years. fell into disrepair, with inadequate tor Internet project K-FON, or the been several years during the past the working people, particularly While Kerala’s achievements in facilities forcing many people to Kerala Fibre Optic Network, and three decades when the ratio of to support and expand the role of human development are well- turn towards private service pro- TransGrid 2.0 — a project to im- Kerala’s outstanding debt to gross the public sector and known, there is a widespread mis- viders. The number of students prove the power transmission net- State domestic product (GSDP) cooperatives. conception that Kerala has not had enrolled in public schools fell work in the State was higher than it is today (36%). The United Democratic Front much economic growth. steeply. Those years followed a period in has also come up with its manifes- The ‘Kerala Model’ showed that New funding arm the late 1990s when there were se- to, and it has not fallen behind in a country or a region need not Investments in infrastructure All these constitute a major rious setbacks to the commodity- promising a number of welfare wait till it becomes rich to bring However, the last five years have change from the earlier scenario producing sectors of the economy measures. But a coherent strategy about significant improvements in seen major investments to build when Kerala found it difficult to (prices of major cash crops had regarding the path that Kerala people’s material conditions of liv- up infrastructure in public schools fund capital expenditure that is crashed). should take is yet to be articulated ing, and that people’s movements and public hospitals. More than necessary to upgrade its infras- The current period is also simi- by the UDF. If past experience is can be the driving force of such 45,000 classrooms in 4,752 public tructure. Continuous assaults on lar, with the State having had to any indication, the UDF at the changes by forcing governments schools have been turned ‘hi- fiscal federalism, and the Centre endure severe floods in 2018 and helm would mean less planned in- to adopt redistributive measures tech’, while new, bigger and better putting harsh limits on States’ bor- 2019, and the pandemic-induced tervention by the government in and other programmes. buildings have been constructed rowing have made things very dif- worldwide recession. These led to the sphere of the economy and for public schools. These efforts ficult for State governments. The huge unforeseen expenses, even less attention to the public sector. When growth picked up have had a major impact: the num- Goods and Services Tax has dealt a as economic growth and tax reve- That approach, however, is likely Economic stagnation in the 1970s ber of students in public schools terrible blow to the ability of the nue growth suffered. to be inadequate to meet the chal- and 1980s led many observers to began to increase from 2018-19 on- States to tax commodities accord- Rather than debt, therefore, the lenges that lie ahead. Apart from predict the collapse of the Kerala wards. This was taking place for ing to their own specific condi- real risks are likely to be associated considerations of equity, the ad- model. They argued that the slow- the first time in more than 25 tions and development priorities. with shocks to the economy — ded risk of climate change which growing State would not have the years. Similar infrastructural up- It is in this context that the KIIFB such as natural disasters, job loss- brings with it phenomena such as money to continue financing its grades have been made in the case was brought in as a major funding es in the West Asian countries more frequent extreme weather welfare programmes. of public hospitals too, which was arm of the Kerala government. where a lot of Keralites work, or events point to the need for an But a fundamental change oc- an important factor that allowed The KIIFB raised funds from the contractionary fiscal policy by the even greater, not lesser, role for curred by the late 1980s — Kerala’s Kerala to fight the novel coronavi- financial market and made them central government — which could planning and social oversight over economic growth picked up. rus pandemic relatively well. available to the government to fi- adversely impact economic the process of economic develop- Growth in agricultural incomes Investments that came in nance infrastructure projects growth. Even then, Kerala will be ment in the State. and in remittances provided the through the Kerala Infrastructure which otherwise would have taken better prepared to face the even- spur for a ‘long boom’ in the sub- Investment Fund Board (KIIFB) decades to materialise. Repay- tualities if it has better infrastruc- Subin Dennis is an economist at sequent decades. While services provided the most crucial element ment of the loans is ensured by the ture, and a better-educated, more Tricontinental Research. The views grew the fastest, the secondary which made these investments government legally committing to highly skilled and healthier expressed are personal