Nation Other News 11 Nov 2016 60 years of Kerala m ...

60 years of Kerala model: Boon and bane of remittances

Published Nov 11, 2016, 2:11 am IST
Updated Nov 11, 2016, 7:15 am IST
Kerala must think of how sustainable it’s so–called success story is.
Then chief minister C. Achutha Menon, who had pioneered several of Kerala's modern institutions, walks to the lounge, accompanied by cabinet colleagues, including home minister K. Karunakaran, at Thiruvananthapuram airport.  —Courtesy PRD archives 1970s
 Then chief minister C. Achutha Menon, who had pioneered several of Kerala's modern institutions, walks to the lounge, accompanied by cabinet colleagues, including home minister K. Karunakaran, at Thiruvananthapuram airport. —Courtesy PRD archives 1970s

Kerala’s achievements in social development indicators in the 1970s and 1980s struck the attention of the world. These indicators matched the levels attained by some of the most economically advanced nations of the world. This brought a new lease of life to global scholarship on development theory. The so-called Kerala model was invoked to highlight the importance of placing social development indicators at the root of development policy, instead of viewing them merely as outcomes or consequences of economic development as conventionally understood. It was further argued that a targeted approach towards creating a more inclusive and egalitarian society will not only lead to better development outcomes but also pave the way for faster economic growth and prosperity.

Kerala’s history of social reforms and collective action facilitated this process of human development achievements, in its various dimensions – health, education, social inclusion and gender equality (as conventionally measured). It is therefore of little surprise that Kerala derived its economic prosperity through service-led growth (commerce, real estate among others) and through its integration with the world economy in the form of labour flows and trade. Growth of industry and agriculture in the state remained suboptimum. Now, the question is whether the Kerala Model was indeed a true reflection of inclusive social development. This is debatable. While we cannot deny the early achievements of Kerala in education, health and gender, way ahead of the rest of India, there are pitfalls and problems underlying various achievements.

Newer layers have been brought into the discourse especially with regard to health and gender empowerment that raises doubts about putting a blanket appreciation for Kerala’s social development. There are issues that are hidden behind the so-called impressive numbers reflecting these achievements. For instance, impressive mortality rates and high life expectancy hide the fact that Kerala is among the highest in terms of morbidity (people falling sick). Also there appears to be excessive dependence on medical technologies, often pushing up costs of health care, met primarily from out-of-pocket expenses. Being an outsider, I expected Kerala society to be much more progressive with respect to social inclusion in terms of religion caste and gender, given my understanding of the Kerala model.  Although there are clear signs of equality and progressiveness with respect to labour rights for local labour, the same level of sensitivity and progressiveness would have been appreciated when it comes to migrant labour from other states.


Similarly, in a state with a history of social reforms, I was aghast when I was requested by the personnel department to disclose my caste, which I have never been asked anywhere since my childhood. Finally, we must think of how sustainable Kerala’s so–called success story is. This is a serious concern. Service-led growth can be highly inequitable. Remittances cannot be a sustainable form of transfers to steam up the economy. Apart from the issue of volatility of remittances depending on geopolitical developments, remittances lead to consumption rather than investments in productive channels. Also a large part of the remittances gets locked in unproductive assets (real estate and gold). Hence the financial flows contribute little to economic growth of the state. Remittances might also have accentuated inequality. There is an urgent need to think of innovative models to utilize remittance flows for the economic development of the state that will lead to a prosperous and inclusive society in the true spirit of the Kerala model of development.


Prof Amit Shovon Ray (The writer is director of Centre for Development Studies)

Whether one calls it a ‘development model’ or a ‘development experience,’ the fact remains that the strategy pursued in the early years did put Kerala on par with the First World economies in the matter of social indicators of growth such as infant mortality, literacy, life expectancy, population growth and so on. There is no denying either that this had been made possible because of a judicious combination of state interventions and private initiatives. If in subsequent years the tempo was either lost or ran out of steam, it could be largely because these two crucial factors got either distorted or snapped. Indeed, the strategy had a heavy dose of welfarism, much of which funded, directly or indirectly, by the state exchequer. In some ways, this was a legacy inherited from the royal dispensation, particularly the erstwhile Travancore and Cochin states.

The royal concern for education and public health and primary health care in particular had been proverbial and matched by very few other princely states in the country. It is to the credit of popular governments that came to power subsequently that they did not dilute, much less dispense with, these welfare measures. In fact, in many cases they enlarged their scope and sweep, though arguably, not so much for ensuring social equity as for enhancing their political fortunes. How much of these schemes really reached the target groups and how beneficial they turned out to be in terms of social empowerment have all been issues of intense debate. The ‘model’ had its critics too who had been quite vocal in warning of its ‘limits to growth.’ Their main complaint had been that while the strategy did help the state develop “socially,” it failed to “grow economically.” The obvious mismatch, according to them, adversely impacted the state’s finances and capacity to fund growth.

In fact, some even concluded that the socio-political and cultural attributes of the “model” were a recipe for failure. There was also the criticism that too much of ‘welfarism’ seemed to have created, over a period of time, a society of entitlement that made the people more aware of their rights than duties with attendant consequences. Some of these fears might have been overly exaggerated but they are not totally flawed. What has come to pass in the two main showpieces of the ‘model’, education and public health, in recent times proves the point. Once the pride of the state, these two sectors are now in a shambles. Such policy changes as have been introduced ostensibly to redeem the situation have only worsened it. The current goings-on in these sectors are quite revealing. Indeed in sheer numbers there has been an exponential expansion with most of the newcomers offering state-of-the-art facilities. But in terms of the quality and cost of the services offered, they leave a lot to be desired.

In some way this has been the inevitable fallout of the competitive populism the two political fronts have been pursuing since long in total disregard of the interests of the state. Efforts to promote participatory development through panchayati raj, though looked promising at one stage, have of late been faltering. The ruling dispensation seems aware of it and is reportedly contemplating corrective action. This offers hope.

M.K. Das (The author is a former Editor)

Location: India, Kerala


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