Kerala set to emerge as investment hot spot

The survey, targeted at both foreign and domestic delegates at GIM, revealed an overwhelming percentage considering Kerala as an emerging investment destination.

What more, a lion’s share of the respondents said a resounding ‘Yes’ when asked whether they would invest in Kerala. The reasons for the paradigm shift in the investors’ perception range from reforms (including labour), good administration, improved industrial relationship through political will to a relatively transparent administration.

As Kerala Chief Minister A. K. Antony put it: “Kerala is no longer closed to outside world and private capital. I have, therefore, no hesitation, in stating that what you see today is a resurgent Kerala. I welcome you to this resurgent Kerala.”

The survey findings tally unambiguously with the Chief Minister’s optimism. Eighty-six per cent of the delegates polled in the survey said they perceived Kerala as a ‘good investment destination’, while four per cent considered it as ‘bad’. Another 10 per cent said they could not form an opinion yet.

More importantly, around 82 per cent of the respondents said they would bet on Kerala with their hard-earned money while the remaining 18 said they would not invest in Kerala. Further, 84 per cent of the respondents rated the current Kerala administration as good. Two per cent considered it as excellent while a similar percentage of them dubbed it as poor and balance remained non-committal.

The most favoured sectors for investment in Kerala, according to the survey, was in predictable lines and turned out to be tourism and information technology. This is very much in tune with Kerala’s perceived resource endowments as it has been traditionally one of the favoured tourist destinations in the world.

National Geographic, it should be recalled, had identified Kerala as one among the 50 global tourist hot spots. Similarly, Nasscom has identified Kerala as the second best destination for IT-enabled services in the country for its educated workforce, bandwidth availability, quality of English and low real estate prices vis-a-vis other states such as Tamil Nadu or Karnataka.

And now the agenda ahead for the state government. The findings of the survey put the blame for Kerala’s industrial backwardness squarely on the lack of administrative efforts as well as lack of good infrastructure.

Ironically, only a handful of the respondents suggested ‘labour militancy’ as the major reason for Kerala’s industrial backwardness. To sum up, the world acclaimed Kerala model, the high level of social achievement on a poor economic base, may still have a chance of survival if investments are attracted in a big way. But for this to happen, the political forces should bury the hatchet and take the torch of economic reforms further ahead.