Kerala only state to record positive growth in receiving investment proposals b/w 2009-11 and 2012-14: ASSOCHAM study
Services sector accounts for lion’s share of investments attracted by Kerala
Kerala remained the only state to have recorded positive growth of about 315 per cent during 2012-14 as against 2009-11 in terms of receiving industrial entrepreneurs’ memorandum (IEM) proposals, more so as the same had seen a decline of over 65 per cent in India during the aforesaid period, according to a recent study by apex industry body ASSOCHAM.
“Kerala had received industrial entrepreneurs memorandum (IEM) proposals worth over Rs 17,600 crore during 2012-2014 i.e. just about one per cent of the total IEMs worth about Rs 15 lakh core received across India,” highlighted the study titled ‘Realising economic growth potential in Kerala,’ conducted by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“Kerala had attracted outstanding investments worth about Rs three lakh crore accounting for just about two per cent of the total outstanding investments worth Rs 157 lakh crore attracted by states across India as of 2014-15,” noted the study prepared by the ASSOCHAM Economic Research Bureau (AERB).
Services sector (other than financial) accounted for largest share of 54.5 per cent in total outstanding investment attracted by Kerala followed by manufacturing (27.5 per cent), real estate and construction (eight per cent) and electricity (7.5 per cent).
“Investments attracted by Kerala have grown at a compounded annual growth rate (CAGR) of over 13 per cent during the course of past decade i.e. between 2004-05 and 2014-15,” said Mr D.S. Rawat, secretary general of ASSOCHAM while releasing the findings of the chamber’s study.
Investments attracted by construction and real estate sector have recorded highest CAGR of about 44 per cent followed by mining (20 per cent), irrigation (18 per cent), manufacturing (15 per cent), services (13 per cent) and electricity (four per cent).
However, projects with about 54 per cent of total investments attracted by Kerala have remained non-starter as of 2014-15, highlighted the ASSOCHAM study, as such it is imperative for the state government to give a huge boost to growth and development plan of Kerala.
In its study, ASSOCHAM has suggested the state authorities to focus on improving physical infrastructure like access to roads and power supply to improve industrial productivity and competitiveness, especially in the marginal, small and medium enterprises (MSMEs) which employs over 33 lakh people in the state.
“Kerala should create new employment opportunities by partnering with private sector to realise the objective of robust economic growth and promote agriculture and food processing industry, tourism, textile, rubber, and other such sectors,” suggested the study.
Besides, it is also required to provide training to farmers and producers to improve quantity, quality and promote usage of new technologies in farming sector, it said.
The state government should facilitate modernisation and technological upgradation of different segments of industry to make them globally competitive and liberalise procedures and reforms to lure investors for setting up industrial units across the state.
Ensuring timely implementation of projects by providing license and clearance from concerned departments in a stipulated time frame and rehabilitation of sick industrial units are other significant suggestions for the Kerala government.