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| Last Updated:: 24/09/2016

Economics

 

           The per capita debt of Kerala which was Rs.7414 in 2001 increased to Rs.12681 in 2005 as against all state level of Rs. 8343. The per capita debt of neighbouring states in 2005 next to Kerala was Andhra Pradesh (Rs.8427) followed by Tamil Nadu (Rs.7782) and Karnataka (Rs.7446). When the debt/GSDP ratio of Kerala in 2005 was 42 per cent, that of neighbouring states and of all states ranged between 27 per cent and 38 per cent. The revenue deficit of the state came down from Rs.3668.30 crore (3.66 percent of GSDP) in 2004-05 to Rs. 2637.94 crore (1.99 percent of GSDP) in 2006-07.

         

          Kerala economy has bettered its growth rate nominally, but at the cost of having its government fiscals debt-squeezed. The Economic Review-2007, admits that the state's public debt has crossed Rs. 57,138.71 crore from Rs. 45,929.05 crore in the previous year. Growth rate of GSDP (Gross State Domestic Product) is up by 0.1% to 8.1% in 2006-2007. In 2005-2006, this was barely 8%. Per capita income in the state has slightly improved from Rs. 31,438 to Rs. 31,642 in 2006-2007. As much as 61% of Kerala's GSDP is contributed by tertiary sector. Secondary sector accounts for 22% and primary sector just 17% of GSDP. Meanwhile the public debt is growing at double-digit rates. The rate of growth of debt had actually fallen in 2006-2007 to 8.59% from 9.67% in the previous year before soaring to 14.56%. At constant (1999-2000) prices, the primary sector recorded a growth of 6 per cent, the secondary sector 8.3 per cent, tertiary sector 8.7 per cent in 2006-07. 

          Corresponding to the debt growth, fiscal deficit (FD) has bloated to Rs 7,425.21 crore in 2007-2009. Last year this was only Rs 3,921.87 crore. With salaries, pensions and interests eating over 77% of revenue income, revenue deficit (RD) was a whopping Rs 5,251.16 crore in 2007-2009. In the previous year, this was only Rs 2637.9 crore. Worst is that less than half of the revenue expenditure is devoted to developmental expenditure. Although the fiscals are not shipshape, the state had, in the last fiscal, set aside over Rs 1000 crore for farm sector. Economic Review-2007 also claims that in the second half of 2007, the state has not seen any farmer suicide. At the same time, the rate of increase in agricultural income has fallen compared to that of 2005. From 6.72% in 2005-2006, the growth in farm income has fallen to 6.17%. Increased foreign tourist arrivals are the prime drivers of the state economy.

 

National Income

 

         The Gross National Income (GNI) of India at 2011-12 prices is estimated at ₹10513163 crore during 2014-15, as against the previous year’s estimate of ₹9800813 crore (Table 1.1). The gross national income is estimated to have risen by 7.27 pecent during 2014-15, in comparison to the growth rate of 6.85 percent in 2013-14. GNI at current prices is estimated at ₹12383908 crore during 2014-15, as compared to ₹11205169 crore during 2013-14 showing a rise of 10.5 percent. The Net National Income (NNI) at current prices is estimated at ₹11117615 crore during 2014-15, as compared to ₹10056523 crore during 2013-14, showing a rise of 10.6 percent. Details are given below.

 

National Income, Domestic Product & Per Capita Income at 2011-12 Prices and Current prices (All India) (₹ crore)

 

Note: The figures in Parenthesis show the percentage change over previous year. NS- New Series Estimate, PE- Provisional Estimate

 

            GDP at constant (2011-12) prices in the year 2014-15 is estimated at ₹10643983 crore showing a growth rate of 7.3 percent over the estimates of GDP for the year 2013-14 of ₹9921106 crore. GDP at current prices in the year 2014-15 is estimated at ₹12541208 crore showing a growth rate of 10.5 percent over the estimates of GDP for the year 2013-14 of ₹11345056 crore. The per capita GDP in real terms (at 2011-12 prices) during 2014-15 is estimated at ₹84009 as against ₹79305 in 2013-14, registering an increase of 5.9 percent during the year. The per capita GDP at current prices is estimated at ₹98983 in 2014-15 as against ₹90688 for the previous year depicting a growth of 9.1 percent.

 

             State Income

            According to the reports published by the Department of Economics and Statistics, the quick estimate of Gross State Domestic Product (GSDP) at factor cost at constant (2004-05) prices is Rs. 21010717 lakhs during 2011-12 as against the provisional estimate of Rs.  19186676 lakhs during 2010-11,  registering a growth rate of 9.5 percent in 2011-12 compared to just over 8 percent in 2010-11. The graphical representation is shown below.  At current prices the Gross State Domestic Product is estimated at Rs.  31520567 lakhs (quick estimate) during 2011-12 as against the provisional estimate of Rs.  26947379 lakhs during 2010-11 showing a growth rate of nearly 17 percent.  

               The quick estimate of Net State Domestic Product (State Income) at factor cost at constant prices (2004-05) is Rs. 18699759 lakhs during 2011-12 compared to the provisional estimate of Rs. 17023691 lakhs during 2010-11, recording a growth rate of 9.9 percent in 2011-12. At current prices the State Income is estimated at Rs.  28087084 lakhs (quick estimate) in 2011-12 compared to the provisional estimate of Rs. 23942585 lakhs during 2010-11. The growth rate of State Income at current prices is 17.3 percent in 2011-12 compared to 16.2 per cent in 2010-11. The details are shown in the table here.

 

 

The quick estimate of Gross State Domestic Product (GSDP) at constant (2011-12) prices is ₹43236140 lakh during 2014-15 as against the provisional estimate of ₹40530850 lakh during 2013-14, registering a growth rate of 6.67 percent in 2014-15 compared to 4.54 percent in 2013-14. At current prices the Gross State Domestic Product is estimated at ₹51989585 lakh (quick estimate) during 2014-15 as against the provisional estimate of ₹46291606 lakh during 2013-14.

                              The quick estimate of Net State Domestic Product (NSDP) at constant prices (2011-12) is ₹39176307 lakh during 2014-15 compared to the provisional estimate of ₹36588661 lakh during 2013-14, recording a growth rate of slightly above 7.0 percent in 2014-15. At current prices the NSDP is estimated at ₹47052306 lakh (quick estimate) in 2014-15 compared to the provisional estimate of ₹41804353 lakh during 2013-14. The growth rate of NSDP at current prices is 12.55 percent in 2014-15 compared to 12.56 percent in 2013-14. The details are given below.

 

Per Capita State Income:  As per the quick estimates in 2013-14, the per capita Gross State Domestic Product at constant (2004-05) prices was Rs. 66862 as against provisional estimate of Rs. 63227 in 2012-13, recording a growth rate of 5.7 percent in 2013-14. At current prices, the per capita GSDP in 2013-14 was Rs. 117132 registering a growth rate of 13.36 percent over the previous year’s estimate of Rs. 103321. The best indicator of per capita state income is NSDP (which indicates value added within the state) divided by the population. At constant (2004-05) prices, the quick estimates of per capita Net State Domestic Product in 2013-14 was Rs. 58961 as against provisional estimate of Rs. 55643 in 2012-13, recording a growth rate of 5.9 percent in 2013-14. The below figure  shows that during the period 2007-08 to 2013-14, the per capita state income at constant prices was higher than the per capita national income.

                        As per the quick estimates, the per capita Gross State Domestic Product at constant (2011-12) prices in 2014-15 was ₹127166 as against provisional estimate of ₹119799 in 2013-14, recording a growth rate of 6.15 percent in 2014-15. At current prices, the per capita GSDP in 2014-15 was ₹152912 compared to ₹136827 in 2013-14. The best indicator of per capita state income is NSDP divided by the population. At constant (2011-12) prices, the quick estimates of per capita Net State Domestic Product in 2014-15 was ₹115225 as against provisional estimate of ₹108147 in 2013-14, recording a growth rate of 6.54 percent in 2014-15. The figure below shows that during the period 2012-13 to 2014-15, the per capita state income at constant prices was higher than the per capita national income by over 50 percent.

 

 

 

State Domestic product and per capita Income of Kerala

Sectoral Distribution of Gross State Domestic Product: The contribution from primary, secondary and tertiary sectors to the GSDP in 2010-11 at constant prices (2004-05) was 11.06%, 20.13% and 68.80%, respectively. At current prices, the same was 14.94 %, 21.08% and 63.98%, respectively. During 2012-13, the contribution from primary, secondary and tertiary sectors to the GSDP at constant prices (2004-05) was 9.3%, 23.9% and 66.7% respectively. At current prices, the primary, secondary and tertiary sectors contributed 15.1%, 25% and 59.9% respectively to the GSDP during 2012-13. This difference in sectoral share between constant and current prices shows that inflationary trends in the primary sectors are much higher than in the secondary and tertiary sector. The details are shown below: 

 

                          During 2013-14, the contribution from primary, secondary and tertiary sectors to the GSDP at constant prices (2004-05) was 9.2 percent, 19.9 percent and 70.9 percent respectively. At current prices, the primary, secondary and tertiary sectors contributed 14.2 percent, 19.7 percent and 66.1 percent respectively to the GSDP during 2013-14 (Figure below). This difference in sectoral share between constant and current prices shows that inflationary trends in the primary sectors are much higher than in the secondary and tertiary sector.

            During 2014-15, the contribution from primary, secondary and tertiary sectors to the GSVA at constant prices (2011-12) was 12.15 percent, 25.11 percent and 62.74 percent respectively. At current prices, the primary, secondary and tertiary sectors contributed 12.91 per cent, 24.81 percent and 62.28 percent respectively to the GSVA during 2014-15. This difference in sectoral share between constant and current prices shows that inflationary trends in the primary sectors are much higher than in the secondary and tertiary sector.

 

 

            While analysing the sectoral distribution of state income for the year 2013-14, it is seen that the contribution from primary sector and secondary sector are decreasing. But tertiary sector is showing an increase of 70.9 percent from 69.1 percent. The analysis of annual sectoral growth rate of Gross State Domestic Product shows that tertiary sector recorded the highest rate of growth 8.95 percent in 2013-14 at constant (2004-05) prices followed by secondary sector (1.34 percent) and primary sector showed a negative growth rate of -1.36 percent. The driving factor for the growth of the tertiary sector is mainly the growth in the transport, storage and communication sector which is showing an increase to 16.78 percent in 2013-14 from 12.69 percent in 2012-13. Negative growth in agriculture is generally because of the decrease of production in some of the cash crops like pepper, turmeric, cashew, tea and coffee. At current prices, the tertiary sector recorded a growth rate of 17.68 percent, secondary sector 17.68 percent and primary sector with 7.5 percent in 2013-14. The details of sectoral distribution of GSDP with percentage during the last three years is given in [pdf-1, 2, and 3] and the details of GSDP, NSDP at constant and current prices during 2004-05 to 2012-13 are given at [Pdf  4,5,6 and 7].    

While analysing the sectoral distribution of state income for the year 2014-15, it is seen that the contribution from primary sector and secondary sector are decreasing. But tertiary sector is showing an increase to 62.75 percent from 60.89 percent. The analysis of annual sectoral growth rate of Gross State Valued Added shows that tertiary sector recorded the highest rate of growth 9.42 percent in 2014-15 at constant (2011-12) prices followed by secondary sector (3.74 percent) and primary sector showed a negative growth rate of -3.86 percent. The driving factor for the growth of the tertiary sector is mainly the growth in storage, trade, hotels and restaurant which is showing an increase of 14.72 percent in 2014-15 compared to 7.10 percent in 2013-14. Negative growth in agriculture is generally because of the decrease in production of some of the cash crops like pepper, turmeric, cashew, tea, coffee and rubber. At current prices, the tertiary sector recorded a growth rate of 14.43 percent, secondary sector 9.22 percent and primary sector with 6.13 percent in 2014-15.

The share of primary and secondary sector has decreased during the period 2012-13 to 2014-15 and tertiary sector has increased from 59.06% to 62.75%. The details of sectoral distribution of GSVA with percentage share during the last three years is given in 1, 2 and 3  and the details of GSDP, NSDP at constant and current prices during 2011-12 to 2014-15 are given 4, 5, 6, and 7. 

 

Sectoral Distribution of GSDP - Kerala 1960, 2011District wise distribution of Gross State Domestic Product 2012-2013 ,Sector wise Annual Growth Rate of GSDP -Kerala2008-2011

 

District wise distribution of Gross State Domestic Product :  District wise distribution of Gross State Domestic Product at factor cost at current prices shows that Ernakulam District continues to have the highest income of Rs. 5409716 lakhs in 2013-14 as against Rs. 4800385 lakhs in 2012-13 registering a growth rate of 12.7 percent. At constant (2004-05) prices, this amounts to Rs. 3264509 lakhs during 2013-14 compared to Rs. 3076050 lakhs during 2012-13. The details are given here.

   

          District wise distribution of Gross State Value Added at basic prices at current prices shows that Ernakulam District continues to have the highest income of ₹7308907 lakhs in 2014-15 as against ₹ 6494347 lakhs in 2013-14 registering a growth rate of 12.54 percent. At constant (2011-12) prices, this amounts to ₹6081130 lakhs during 2014-15 compared to ₹5680292 lakhs during 2013-14. The district wise details are given below.

 

District-wise Per Capita Income: The analysis of district wise per capita income shows that Ernakulam district stands first with the per capita income of   Rs. 85070 at constant (2004-05) prices in 2010-11 as against Rs. 78351 in 2009-10 Kottayam District has the second largest per capita income of Rs. 64648 in 2010-11 at constant prices followed by Thiruvananthapuram ( Rs.60945), Pathanamthitta ( Rs. 60370), Thrissur ( Rs. 59127), and Alappuzha ( Rs. 57298). The lowest per capita income was recorded in Malappuram District ( Rs. 36740) in 2010-11 at constant prices preceded by Wayanad ( Rs. 39051), Kasargod ( Rs. 44572) and Kozhikode ( Rs. 53298). The highest rate of growth of per capita income of 9.31% was recorded in Pathanamthitta District in 2010-11 followed by Thiruvananthapuram (8.98 %), Thrissur (8.84%), Ernakulam (8.57%), and Allappuzha (8.37%). The lowest growth rate was recorded in Idukki District (6.84%) preceded by Wayanad District (7.74%) , Malappuram (7.75%), and Kasargod (7.97 %). The district wise per capita income with growth rate is given  here:

The analysis of district wise per capita income shows that Ernakulam district stands first with the per capita income of  Rs.86267 at constant (2004-05) prices in 2013-14 as against Rs. 81557 in 2012-13. The district wise per capita income with corresponding rank and growth rate is given here.  [Tables showing state income(2007 -2010)     District wise per capita Income at constant (2004-2005)]

           Growth rate at current prices does not eliminate the inflationary impact. When district level growth rate at constant prices, we compared the “real” GSDP growth rate may be observed as the inflationary impact has been eliminated. Ernakulam, Thrissur,Kozhikode and Kannur had higher real growth in GSDP than the State Average. Wayanad had a lower growth than other districts. According to Department of Economics & Statistics, t analysis of district wise per capita income shows that Ernakulam district stands first with the per capita income of Rs 94392 at constant (2004-05) prices in 2012-13.  The details are shown here:

 

                     The table reveals that the districts Ernakulam, Thrissur, Kozhikode and Kannurhad a much higher growth rate than the average growth in per capita income in 2012-13. However, the districts of Wayanad, Kollam, Palakkadand Idukki showed much lower growth in per capita income than the state average. District wise and sector wise analysis of GSDP reveals that Ernakulam district contributions in all these sectors are highest. District-wise sectoral distribution of Gross State Domestic Product from 2010-11 to 2012-13 at current and constant (2004-2005) prices are given in 7,8, 9, 10, 11 and 12.

 

District wise and sectorwise analysis of GSDP reveals that Kollam district showed highest contributions in primary sector and Ernakulam district contributions in secondary and tertiary sectors are highest. District-wise sectoral distribution of Gross State Domestic Product from 2011-12 to 2013-14 at current and constant (2004-2005) prices are given in  1, 2, 3, 4,5  and 6.

 

 

         The analysis of district per capita income shows that Ernakulam stands at the top with the per capita income of ₹161472 at constant (2011-12) prices in 2014-15 as against ₹151210 in 2013-14. The district wise per capita income with corresponding rank and growth rate is given below.

The data reveals that the districts Alappuzha, Idukki, Ernakulam, Thiruvananthapuram, Kollam, Malappuram, had much higher growth rates than the average growth in per capita income in 2014-15. However, the districts of Pathanamthitta, Kottayam, Kasaragod and Kannur showed lower growth in per capita income than the state average.

 

District wise and sector-wise analysis of GSVA reveals that contribution of Ernakulam in primary, secondary and tertiary sectors is the highest. District-wise sectoral distribution of Gross State Value Added from 2012-13 to 2014-15 at current and constant (2011-12) prices are given in[1.Gross District Value Added (At Basic Price) - Current Price2012-13, 2. Gross District Value Added (At Basic Price) - Constant Price2012-13, 3.Gross District Value Added (At Basic Price) - Current Price2013-14, 4. Gross District Value Added (At Basic Price) - Constant Price2013-14, 5. Gross District Value Added (At Basic Price) - Current Price2014-15, 6. Gross District Value Added (At Basic Price) - Constant Price2014-15]

 

 

Expenditure Pattern:The major items of expenditure under revenue account are, pension, interest payments, salaries and devolutions to local bodies. The combined expenditure of social and economic services under revenue account constitutes the developmental expenditure. The collective expenditure of maintenance, expansion and development funds given to LSGD also needs to be reckoned as developmental expenditure. Expenditure on interest charges, pension charges, administrative services, police, etc. are the main components of non-developmental revenue expenditure. The ratio of revenue expenditure with relative to GSDP declined slightly to 13.07% in 2010-11 from 13.50% in 2009-10. The decline has been consistent since 2008-09. The share of developmental expenditure in total revenue expenditure marginally improved to 54.58% in 2010-11 from 53.43% in 2009-10. The developmental expenditure estimated in BE 2011-12 accounts for 59.37% of the total revenue expenditure. Trend in revenue expenditure is below: 

                       

Capital Expenditure: The consistent efforts to provide adequate funds for creation of capital assets have been apparent since 2007-08. The capital outlay of ` 902.58 crore in 2006-07 rose to ` 1474.58 crore in 2007-08. The trend of enhanced level of capital outlay continued in subsequent years also. The capital outlay increased to ` 3363.69 crore in 2010-11 from ` 2059.38 crore in 2009-10. The ratio of capital outlay to GSDP that stood below 1% in some of the preceeding years advanced to 1.27% in 2010-11. The capital expenditure estimated for 2011-12 is ` 5063.82 crore, its ratio to GSDP being 1.55%. Public works continued to remain the major segment of capital outlay. Details of capital expenditure and total expenditure from 2005-06 to 2011-12 (BE) is shown below: 

                             

             During 2010-11, the commitments on three major items coming under non-plan/non-developmental expenditure, viz, interest, pension and salary accounted for about 72.68% of the total revenue receipt of the state whereas it was 75.83% in 2009-10. The rate of growth in interest payment during 2010-11 over the previous year was 7.50%. Expenditure as salary during the period went up by 12.94%. As against 2009-10, Expenditure on pension during 2010-11 went up by ` 1061.99 crore. The total Expenditure on interest, pension and salary which was 80.19% of the revenue receipts and 66.57% of revenue expenditure in 2005-06 reached at a level of 72.68% of revenue receipts and 64.98% of revenue expenditure in 2010-11.

Tables showing expenditure pattern

 

 

Source: Central Statistical Organization and Department of Economics and Statistics,  E.R.2008-2014