Thiruvananthapuram: Economic crisis seems to be infecting multiple sectors in the state like an epidemic. The plantation sector has been decimated, and now a new Planning Board study reveals that the state’s two wellsprings of growth, tourism and remittance, have been ruined virtually to a point of no return. The study, ‘Report on the Kerala Economy: Challenging Times and the Way Forward’, states that the current Gulf crisis has been lolling in the making.
“Remittance (in US Dollars) into India has been stagnating since 2012 and in the face of precipitous fall in oil prices it has declined in 2015 (after 2009),” the study notes. If at all the remittance is seen to increase, it is only because of the large depreciation of the rupee. The study noted that the high growth of tourism till 2010 attracted large investments into the sector raising the number of hotels, tour operators and service providers and the growth deceleration has led to a crisis in the sector.
The deceleration in these two sectors, the study said, has led to a slowdown in sectors such as construction, financial services, communications, real estate and trade. Fall in remittances, the study warns, will hurt the state hardest. “Any fall in remittances will lead to an abysmal growth rate of 3.3 percent,” said Dr D Narayana, the convenor of the study.
As regards tourism, foreign tourist arrivals have been growing at close to 20 per cent a year till 2010, with a dip in 2009. “The growth of tourism has considerably decelerated since then. It has fallen below 10 per cent since 2012 and has fallen below the national average in 2014 for the first time in recent history. The deceleration has continued into 2015,” the study notes.
Global slowdown is only part of the problem. “The close to 20 per cent growth in foreign tourist arrivals in the neighbouring Sri Lanka suggests that Kerala is losing the competitive battle,” the study notes. The financial services sector shows the sharpest reduction in growth, suggesting that the falling remittance is already having its impact.
