19 Jan, 2012

Kerala: From Wage-Earning To Entrepreneurial Society

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Excerpts from speech by Mr Oommen Chandy, Chief Minister of Kerala, at the Pravasi Bharatiya Divas 2012, Jaipur, on 9 January 2012.

As all of us know, globalization is an irreversible phenomenon. It has increased the mutual dependence of countries. While this has led to a greater sharing of economic growth, it has also resulted in a similar sharing of the negative effects of deceleration of growth. We are currently facing a double dip in the global economic growth. There is wide-spread crisis of economic confidence. The NRis, unfortunately, have to face the brunt of any such global crisis. These are times when our toughness gets tested. Such crises also provide us the opportunities to look for new and innovative ways to stay fit and competitive.

The Economy in India is also facing a slowdown. This is a challenge before the policymakers of the nation. We are very fortunate to have Dr. Manmohan Singh at the helm of affairs. While many seasoned economists are clueless in the face of the current crisis, the whole world looks at Dr. Manmohan Singh for advice.

India is number one globally in terms of receiving remittances from abroad. India received US dollars 55 billion as remittances in 2010, which represents 4.2% of India’s Gross Domestic Product. It is worthwhile to point out that the major proportion of the expatriate population is from Kerala. In 2011, the remittance by NRI population in Kerala was to the tune of Rs. 49,965 crore. This constitutes more than 22% of the GOP of the State. This huge remittance by NRis of Kerala origin is the backbone of Kerala economy, and has remained so for the last three to four decades.

Considering the fact that the majority of the non-resident Keralites are in the unskilled and semiskilled workers category, Government of Kerala have initiated a large number of welfare measures for the benefit of the expatriate population from the State. A separate department namely the Non Resident Keralite Affairs Department (NORKA) was constituted in 1996 for the first time in the country. Following this, a field implementation agency, the NORKA ROOTS, was also created in 1998, for taking up various welfare measures for the Non resident Keralites of the State.

Even though the State Government is implementing many welfare schemes for the Non Resident Keralites, there are many issues of concern still existing in their countries of destination, which need to be addressed by the Union Government. The issues of lack of job security, reasonable living conditions and legal protection for the unskilled and semi-skilled workers are a major area of concern, which need to be addressed. In this context, it is worthwhile to point out that the State of Kerala have already initiated major welfare and social security schemes for the Non Resident Keralites like the Pravasi Kshema Nidhi and Pravasi Pension and Insurance coverage up to Rupees Two lakh for a contribution of Rs. 300/-. In addition many other welfare schemes like Santhwana and Chairman’s Fund are also being implemented for the benefit of the poorer sections of Non Resident Keralites.

The recently concluded Global NRK Meet, the meeting of Non Resident Keralites from all over the world at Thiruvananthapuram, have recommended that the Union Government should take necessary steps for augmenting the staff strength of embassies in the middle east countries for taking care of the community and labour welfare issues of the NRK population in these countries. Further, the meet requested for the assistance of the Union Government for institutionalizing legal aid cells in embassies of the gulf sector, which will benefit the expatriate population. It is heartening to note the Ministry of Overseas Indian Affairs have formulated various welfare schemes like Pension and Insurance Schemes for the poorer sections of the Non Resident Indian Workers. This will go a long way in addressing the various issues faced by Non Resident Indian Workers, especially of the unskilled and semi-skilled categories which constitutes the bulk of the expatriate population of the country.

Kerala, with its early advances in social sector, occupies a unique position in the country. Our Human Development Indicators are the highest. The State has high literacy, high life expectancy, low infant mortality and has been at the forefront of making quality education and healthcare available to the masses. The State has always emphasized equitable growth and sustainable resource utilization for its economic progress. We have placed special emphasis on being green and environment friendly. A natural spin-off of Kerala’s advanced social infrastructure has been its much-acclaimed human resource potential. We have the highest density of science and technology personnel in India. High quality of living at affordable cost has also ensured that Kerala has one of the lowest employee attrition rates.

The Government in Kerala has a development agenda, which is tailor-made to spur growth. We acknowledge the importance of Public-Private Partnerships across every sector in the economy. We want to position our State as an attractive-investment destination.

We have targeted certain sectors for development in the State. IT and IT Enabled Services, Tourism, Healthcare, Knowledge/Education, Trade and Retailing, Food and Agro Processing, Energy including Green Energy, Biotechnology/ Nanotechnology, Water & Inland Waterways, Ports, Shipbuilding and related industries & Infrastructure development are some among them. We want to convert Kerala from a wage-earning society to an entrepreneurial society. Nurturing Micro, Small & Medium Enterprises would be the path for such conversion.

In this context, let me highlight some of the big projects already at an advanced stage, to illustrate the various investment opportunities available in Kerala:

• Smart City is a major IT Park promoted by DIC, Dubai, in Kochi. It is expected to create employment opportunity to around 90000 IT professionals.

• Project for Expansion of Kochi Refinery and promotion of a Petro Chemical down stream complex will lead to investment of Rs.18000 crore.

• DP World, Dubai is investing Rs.2000 crore for the ICTI at Vallarpadam, Kochi which is the first ICTI established in the Country.

• DM Medi City, Dubai is setting up a super specialty hospital complex at Kochi with an investment of Rs.5OO crore in the first phase. Another Rs.5OO crore super Specialty Hospital is being set up by Medical Trust Hospital Group at Kochi. These mega health care projects along with the existing Super Specialty Hospitals will transform Kerala into a preferred destination for advanced medical treatments.

• TCS is now establishing an integrated IT Training centre at Thiruvananthapuram, which is the biggest of its kind in Asia. lnfosys is establishing its own campus for a large IT development centre in the State.

• A Grand Kerala Shopping Festival, the largest of its kind in the country is being organized for the last 5 years to promote retail trade & commerce.

• Besides these, there are other Mega projects also in the pipeline which have major investment potential.

With an open and positive outlook, and a new agenda in place, Government of Kerala is organizing ‘Emerging Kerala-2012’ — a Global Investor Connect in the State. The first ‘Emerging Kerala 2012’ is proposed to be held from 12th – 14th September 2012 at Kochi. It will be held every alternate year thereafter. ‘Emerging Kerala’ will showcase those sectors which have the highest potential for investment in the State. The Government assures all necessary support to investors for setting up suitable projects in these sectors. I take this opportunity to invite you to this Grand Event and to be a part of Kerala’s Economic Growth Story.

I am extremely positive about the potential and prospects of our rapidly emerging State, in the world’s second-fastest emerging economy — India.