INDIAN STATE : KERALA

General Information

The state of Kerala is situated at the southwestern tip of India bordered by TamilNadu and Karnataka. Kerala is enchantingly a beautiful state and is often coated as "Gods Own Country".Kerala lies beautiful and benign, along a sun drenched coastline, to the extreme south west of the Indian peninsula, flanked by the Arabian sea on the west and the mountains of the Western Ghats on the east, this land of Parasurama stretch north-south along a coast line of 580 kms with a varying width of 35 to 120 kms. Cascading delicately down the hills to the golden coasts covered by verdant coconut groves, the topography and physical characteristics change distinctly from east to west.The state of Kerala is located between north latitudes 8 degree 18' and 12 degree 48' and east longitudes 74 degree 52' and 72 degree 22.

Fact File

Geographical Area	0.39 (Lakh Sq Km)
Capital	Thiruvananthapuram
Population (2001 Census)	In lakhs 318.41
Percentage of State Population to All India Population	3.10
Gross state domestic product at current prices (2004-2005)	US$ 21.7915 bn
Gross state domestic product at constant prices (1993-1994) for 2004-2005	US$ 11.0402 bn
Net state domestic product at current prices for 2004-2005	US$ 19.3877 bn
Net state domestic product at constant prices (1993-94) prices for 2004-2005	US$ 9.54883 bn
Per capita income at current prices (2004-2005)	US$ 586.26
Literacy rate · Male· Female	90.8694.2487.72

Source: CSO
Economic Survey of Maharashtra (2005-06)

Advantage Kerala

• Bounty of natural resources
  • Rich fertile soil
  • Temperate climate
  • Rich marine life
  • Large reserves of mineral deposits and beach sands containing the riches concentration of zircon, monazite, sillinmanite
    
    
• Most advance state in terms of literacy, education and health
  
  
• Strategically located state on the trans- National trade corridor
  
  
• Well connected infrastructure in terms of:
  • Three international airports at Thiruvananthaturam, Kozhikode, and Cochin
    
  • International sea port with container cargo handling facility at Cochin
    
  • Well integrated road and rail network
    
    
• Human resource advantage
  • Highest density of science and technology personnel in India
    
  • Lowest employee attrition rate in the country - <5%
    
  • Ongoing training for ITES HR pool
    
    
• The cost advantage
  • A fully burdened cost of just $8 per hour when compared to the global average of $15
    
  • Salaries - 1/5th of the international average
    
  • Operational costs less than 50% when compared to the other major IT Parks
    
  • Rentals lower by more than 60%
    
  • Power and water tariff among the lowest in the country
    
    
• Communication advantage
  • 100 per cent of 988 telephone exchanges are digital
    
  • 98 per cent of telephone exchanges connected by OFC to the National Internet Backbone (NIB).
    
  • Malappuram - First wifi district in the country
    
  • VSNL's primary international gateway in India is in Kochi and this gateway handles around two third of the country's data traffic
    
    
• Proactive government policies and pro enterprise incentives
  
  
• Simple and transparent procedures for investment
  
  
• Services sector accounts to close to two thirds of the Kerala economy

Thrust Areas

Mineral and Clay based products

• Presence of substantial quantities of silica, quartz, china clay, graphite, granite
  Agriculture and Horticulture Produce
  
• Coconut
  
• Rubber
  
• Herbals
  
• Black pepper
  
• Cardamom
  
• Cashew nut

Traditional Industries

• Coir
  
• Cashew
  
• Handicrafts
  
• Tobacco
  
• Spices and Spice extracts
  

Tourism

• Ayurvedic Centres
  
• Eco-tourism
  
• Adventure-tourism
  
• Boat houses
  
• Amusement and water parks
  
• Handicrafts emporia
  
• Food courts and restaurants
  
• Beach resorts

Auto Components

• Emergence of a number of auto giants such as Ford and Hyundai at Chennai
  
• Good scope for the establishment of ancillary units.
  Marine Products
  
• Modern fishing harbour at Thengaithittu, Pondicherry. and also at Karukalacheri, Karaikal in the pipeline.
  
• Large untapped potential for processing units.
  
• Good scope in shrimp culture and crab farming
  

Agro Processing

• Sought after destination for Agro Food processing
  
• Scope for floriculture ventures like cut flowers and for cultivating medicinal and aromatic plants.
  
• Good potential for Guava pulp and processing units.

Economic Infrastructure

Power

Generation

Kerala power system consists of 30 power-generating stations, which include 24 hydel, five thermal and one wind station. Among these, Kerala State Electricity Board (KSEB) owns 22 hydel, one wind and two thermal stations. The total installed capacity in Kerala as on 31st March 2005 was estimated at 2617.22 MW.

Due to good monsoon during 2005-06, the reservoirs received an inflow of 7974MU and generation from hydel stations was 4949.15 MU (up to 30-11-05). Further, another landmark in the power sector came along with the Malankara Hydro Electric Project, which was commissioned on 23rd October 2005. As a result installed capacity has been increased by 10.5 MW.

On going projects and projects in the pipeline:

Name of the project	Installed capacity (MW)	Energy Potential (MU)
On going schemes:
Kuttiadi Additional Extention	100	240
Kuttiadi Tailrace	3.75	15
Neriamangalum Extension	25	58.27
Lower Meenmutti	3.5	7.63
On going diversion schemes:
Kuttiar		37
Projects in Pipeline:
Athirapalli	163	386
Pallivasal Extension	60	164.87
Shengulam Augmentation		85
Maniyar Tailrace	4	16
Chanttankottungala II	6	14.76
Poozhithodu	4.80	11.779
Vilangad	7.5	22.63

Source: KSEB

Renovation, modernisation and Up rating (RMU) of old generating stations

The renovation and modernization of Pallivasal, Panniyar & Shengulam projects have been completed. The capacity of Unit 6 of Sabarigiri increased from 300 MW to 335 MW and unit 1 of Neriamangalam increased from 45MW to 54 MW and its works are in progress.

Transmission

Provision in the Electricity Act 2003 such as open access to the transmission and distribution net work, recognition of power trading as a distinct activity, the liberal definition of a captive generation plant and provision for supply in rural areas are expected to introduce and encourage competition in the power sector.

The load dispatch activities are carried out with the aid of state -of -art technology-Computerized Supervisory Control and Data Acquisition system (SCADA). The real time data from 30 Remote Terminal Units (RTU) including generating stations and major sub stations are acquired at the Load dispatch station. One more RTU is being installed. The State LD station is connected to the Regional Load Dispatch centre, Bangalore through F.O link for real time data transfer.

In addition to the above, two 110 kv sub stations, three 66 kv sub stations three 33 kv sub stations, 25.18 ckm of 110 kv lines, 11.35 ckm of 66 kv lines and 16.6 ckm of 33 kv lines were also commissioned during 2005-06. Power Grid Corporation of India Limited (PGCIL) has completed the construction of a new 400 kv sub station at Pallipuram in Trivandrum in 2005.

Power Highway

In Kerala, demand for electricity has considerably increased in the recent past. In order to meet the growing demand, the Government of Kerala has taken various measures. With assistance from the Central Power Grid Corporation 400 KV power highway is being built which extends from Kozhikode to Thiruvananthapuram. It has been designed to draw electricity from the power stations at Koodankulam of Tamil Nadu and Kayamkulam and to transmit to different parts of the state.

Power Sector Reforms

The status of Power Sector reforms implemented in Kerala are given below:

• All the 15 lakhs households will be electrified by 2007 by effecting service connection to five lakhs per year. During 2004-05, 418814 and during 2005-06 (up to August 2005) 153784-service connections were made.
• Completed the energy audit to reduce system losses by metering all 11 KV and above feeders.
• Completed 100% metering of all consumers.
• MIS cell started functioning with head quarter at Trivandrum and two regional offices formed at Ernakulam & Kozhikode.
• Action for reducing expenditure and increasing revenue collection is expedited.
• Computerised billing & customers service centres at sections.
• In town schemes, completed all 54 sections.
• In Circle schemes completed all 88 sections.
• Anti Power Theft (APT) activities are intensified and APT wing has been reorganized. Anti power theft ordinance promulgated by Government of Kerala.
• Renovation and modernization (R&M) works of Pallivasal, Sengulam and Panniar were completed and the units were also commissioned.
• Renovation works of Neriamangalum hydel generating stations is nearing completion.
• Introduced Availability Based Tariff (ABT) in southern Region with effect from 1.1.2003 and Kerala is strictly following grid regulations.
• Government of Kerala has issued captive power policy on small hydro projects in January 2003.

Railways

In Thriuvananthapuram division, the total route length of railways is 494 km. Railway electrification work is in progress between Ernakulam Junction to Trivandrum Junction via Kottayam and Alleppey. The sub-sections have been commissioned recently are Ernakulam - Kottayam and Ernakulam - Alleppey - Kayamkulam.

The second highest earning division of southern railway is Thiruvananthapuram division. This division is basically passenger oriented with trains running from terminals at Trivandrum central, Ernakulam and Nagarcoil to all parts of the country. This division operates fifty-three numbers of express/mail trains and fifty-eight numbers of passenger trains and carry 2 lakh Passengers daily. The division for passenger amenities in 2004-05 has spent an amount of Rs. 2.94 crores.

Aviation

Kannur Airport

With private contribution, government is planning to set up an airport at Kannur. The implementation of this scheme has already taken speed and is in the preliminary stages of implementation.

Budget Airline (Kerala Airlines)

Government has proposed to set up a private airline, based on the suggestions made during the Pravasi Bharatiya Divas, to cater to the needs of the Non-resident Keralites. This scheme has already been acknowledged for speedy implementation.

Cargo Traffic

Kerala State Industrial Enterprises Ltd runs two Air Cargo Complexes at Thiruvananthapuram and Kozhikode Airports. Government of India has recognized the company as the official export house for the promotion of exports. This company acts as the virtual office of Agricultural and processed Food Products Export Development Authority (APEDA), Ministry of Commerce, Govt. of India, for the State of Kerala. The cargo complexes achieved a turnover of Rs. 681.82 lakh in 2004-05,

Ports

Along its coastal line of 585 kms Kerala has one major port at Cochin and 17 minor/intermediate ports.

Cochin Port

It is the only major port in Kerala. It is an ISO 9001-2000 Port. A study shows that 97 per cent of the total volume of traffic from the Cochin Port is accounted by Kerala, though the hinter land of the port spreads to parts of Tamil Nadu and Karnataka States.

Telecommunication

Way back in 1990, all the telephone exchanges in Kerala were made automatic for the first time in the whole country. Kerala also boasts of becoming the first state to provide public telephone facilities in all Panchayat headquarters and to provide public telephone in every village in the year 1992 and 1995 respectively.

Upto the year 2005 Kerala had a telephone density of 114.3 per thousand population. In Kerala the rural telephone density is 100 per 1000 population and urban telephone density is 153 per 1000 population. It also has a modern telecom network spanning its length and breadth and comprises of state-of-art-Digital switches interconnected by reliable Optical Fibre/Microwave/Satellite media. The state is served by 1207 automatic exchanges, all of which are Digital electronic in the year 2005.

Special Economic Zone (SEZ)

Special Economic Zone (SEZ) is one of the major thrust area for export promotion. Special Economic Zones (SEZs) are been set up in the country in order to provide an internationally competitive and hassle free environment for exports.

Kochi is the only City in India having three Special Economic Zones

• Electronic Park at KINFRA in Kalamassery
  
• Cochin SEZ
  
• Port Based SEZ

Other SEZs

• Malappuram Food Park.
  
• Techno park.

Proposed SEZs

• Thiruvananthapuram Apparel Park.
  
• Film and Video Park Animation SEZ (The first Animation SEZ in India).

SEZ status for animation zone: Further, government of India has sanctioned Special Economic Zone status to the Animation Zone at KINFRA Film and Video Park, Thiruvananthapuram.This is the first time that the Central Government is granting SEZ status to an animation zone in the country. Ten hectares of land in the park has been earmarked for the animation zone. The SEZ status is expected to boost the growth and development of the capital city.

Finance

The government of Kerala assists Industrial units by providing them financial assistance, infrastructure and training/ consultancy services.Important agencies/ departments engaged in the industrial promotion in the State are:

Kerala Financial Corporation (KFC):

Kerala Financial Corporation (KFC) provides term loan assistance up to a maximum of Rs.500 lakhs per unit for corporate sector and Rs. 200 lakhs for others to develop and promote small and medium scale industrial units in the state. For the SSI segment, KFC sanctioned an amount of Rs. 3939.02 lakhs for 213 projects and the total sanction amounts to Rs. 10950.78 lakhs in 385 projects. During the year 2004-05, KFC disbursed an amount of Rs. 8547.82 lakhs; earmarking Rs. 4096.56 lakhs to SSI segment for 187 projects.

Kerala State Industrial Development Corporation (KSIDC):

KSIDC acts as a promotional agency involved in catalyzing the development of physical and social infrastructure required for the constant growth of the industry that will be further strengthened.

During 2004-05, KSIDC assisted in eleven projects with a total investment of Rs. 30 crores and generating employment to 401 persons. It approved financial assistance to 25 projects with an estimated investment of Rs. 192 crores for giving employment to 1487 persons. Twenty-eight projects with an estimated cost of Rs. 670 crores are under implementation that will provide employment to 1731 persons.

During the year 2004-05, KSIDC sanctioned Rs. 91 crores and disbursed Rs. 24 crores. The recovery of principal and interest on loans from assisted units amounted to Rs. 55 crores. The total overdue to the corporation as on 31st March 2005 stood at Rs. 415 crores. During 2004-05, KSIDC's operating profit was Rs. 13 crores as against Rs. 8.00 crores in 2003-04.

Mega projects by KSIDC:

KSIDC has facilitated investments in some mega projects that include

• Rs. 7000 crore Port-based SEZ Project
• Rs. 2500 crore LNG Terminal, Rs. 7000 crore Petro Chemical Complex
• Rs.7000 crore NTPC Expansion and Rs. 450 crore City Gas Distribution Project.

Other projects being promoted by the corporation are

• A permanent trade fair centre at Kalamassery, Kochi to facilitate Industrial
  Promotion and to identify markets for products from the state.
• The Gem and Jewellery Park in Kochi near Kochi International Airport.
  
  

Small Industries Development Bank of India (SIDBI):

During the financial year 2004-05 in Kochi city, SIDBI approved Rs. 221.47 crores and disbursed Rs. 142.17 crores under its various schemes of assistance to the small- scale sector in the state of Kerala.

The salient details of developmental activities for which assistance has been provided by SIDBI in 2004-05 are as follows:

a) Under its Micro Credit Scheme, SIDBI has sanctioned Rs. 120.00 lakhs and disbursed Rs. 228.56 lakhs (which includes sanctions made in the previous years) in the State of Kerala.

b) SIDBI has started implementing Rural Industries Programme (RIP), a comprehensive programme for promotion of micro enterprises in the rural areas of Kerala since 2003-2004. To begin with, Malappuram and Wayanad Districts were identified, and was extended to Thrissur and Palakkad Districts of Kerala during 2004-05. A grant support of Rs. four lakhs was sanctioned to APITCO Ltd., Hyderabad for implementing the programme in Thrissur and Palakkad districts, of which an amount of Rs. 1.90 lakhs has been disbursed so far.

c) During 2004-05 an assistance of Rs. 4.65 lakhs was sanctioned to various agencies in the State for conducting seminars/workshops on topics relevant to SSI sector, skill Upgradation programme for SSI managers & entrepreneurs, entrepreneurship development programme, trade fairs etc.

Kerala Industrial Infrastructure Development Corporation (KINFRA):

In a conscious effort of industrial development KINFRA, the industrial catalyst of the state is specifically aiming at the economic development of those regions of the state that are industrially backward in nature. In order to do so the corporation has been setting up industrial parks, townships, zones etc that provides all the facilities required by entrepreneurs in starting an industry in the thrust sectors identified by the Industrial policy of the government.

KINFRA has 17 industrial parks in various sectors wherein there are 150 operating units with an annual turnover of about Rs.1000 crore, creating an employment to 5000 persons.

Major activities of KINFRA during 2004-05 are

• KINFRA Film & Video Park, Kazhakootam - Development of Animation Centre
  
  
• IIDC, Koratty - Development of Ist phase of the Small Industries Park under IIDC Scheme of GOI is completed
  
  
• IIDC, Kunnamthanam - Development of Small Industries Park is in progress
  
  
• Herbal Village, Wayanad is being developed in 240 acres of land
  
  
• WSS for KINFRA Techno Industrial Park, Kakkancherry is under implementation and phase I work of the internal works have been completed
  
  
• Biotechnology Parks, Kochi & Thiruvananthapuram - Being developed in 50 acres at Kalamassery
  
  
• A Biotechnology Incubation Centre is being developed in the Biotechnology Park, Kochi
  
  
• IIDC for Food Processing and Biotech Industries, Adoor
  
  
• Developing Industrial Development Zones at Thiruvananthapuram, Kochi, Kozhikode and Palakkad through private sector participation and the project is in Progress
  
  
• KINFRA to set up a Textile Park at Kannur In order to facilitate infrastructure for the growth of textile industry in the area KINFRA is establishing a textile centre near Thaliparambu in Kannur district. The central government is extending a financial assistance of Rs. 20 crore for setting up of the centre, which is coming up on a 120-acre plot.

Directorate of Industries & Commerce

Directorate of Industries and Commerce provides infrastructure facilities for small-scale sector by acquiring land and developing it into development area / plots with facilities like developed land, road, water supply, electricity, necessary building etc.

Small Industries Development Corporation

The Small Industries Development Corporation also undertakes works on provision of infrastructure facilities for the small-scale sector through its major industrial estates and mini industrial estates.

Kerala Industrial and Technical Consultancy Organization (KITCO)

Kerala Industrial and Technical Consultancy Organization (KITCO) have gross earnings of Rs.438.67 lakhs as against Rs.362.98 lakhs during 2003-04. They achieved a growth rate of 20.85 per cent during 2004-05 as against 4.22 per cent during the previous year. KITCO is involved in various activities such as rendering consultancy services in different fields, but mainly in the fields of detailed engineering and human resources development. Other activities include special studies, valuation of assets and energy audit.

Major Assignments of KITCO

• Design, construction, supervision and project management of ROB at
  Meenchanda and Neeleswaram for RBDCK.
  
• Detailed investigation of 56 ROBs.
• Infrastructure projects of Cochin Special Economic Zone.
• Revamping of the HT and LT power distribution system at CSEZ.

Social Infrastructure

Education

The literacy rate of Kerala, which was 47.18% in 1951 almost, doubled in 2001 census. According to 2001 census, the literacy rate for Kerala is 90.92 percent as against the all India literacy rate of 65.38 percent. Kerala's male literacy rate at 94.20 percent and female literacy rate at 87.86 percent are unique compared to the corresponding national figures of 75.85 percent and 54.16 percent respectively. The highest literacy rate of 95.90 percent is in Kottayam district of Kerala. A taluk-wise analysis reveals that literacy rate is the highest in Mallappally taluk (97.03%) of Pathanamthitta district.

School education: In Kerala, there are 12650 schools in 2005 comprising 6827 Lower Primary Schools, 3042 Upper Primary Schools and 2781 High Schools. Moreover there are 483 CBSE schools, 78 ICSE schools, 26 Kendriya Vidyalaya and 13 Jawahar Navodaya Vidhyala.

Higher secondary education: Kerala government has introduced higher Secondary Course in the state with the aim of re-organise secondary level of education in accordance with the National Education Policy, As a first step, during 1990-91, 31 government schools were upgraded to the status of higher secondary schools. At present, higher secondary course has been conducted in 1656 schools; 702 in government sector, 523 in aided and 431 in unaided sector.

Also, grading system of evaluation has been introduced in the higher secondary level from 2005-06 academic year onwards.

University and Higher education: Kerala's higher education system has grown in many folds both in terms of the number of universities and in terms of the number of colleges in comparison to their number at the time of the formation of the state. The state's higher education system comprises of 7 universities and 2 deemed universities.

Technical education: In terms of Technical education system the state covers courses in engineering, technology, management, architecture etc. at diploma, degree, post graduate and research levels. Further, Industrial Training Institutes, technical high schools, fine arts colleges etc. also come under the technical education system.

Engineering colleges: There has been a remarkable increase in the number of engineering colleges in Kerala in the recent years, especially in the number of private self-financing colleges. By the end of the Ninth Plan, the number of engineering colleges was 44. At present there are 84 engineering colleges with a sanctioned intake of 23196 seats. Out of 84 engineering colleges, 9 are government colleges, 3 are private aided and 72 are self-financing engineering colleges.

Expenditure on education: During 2004-05 it is estimated that Kerala has expended Rs. 3569.19 crore (excluding Art & Culture and Sports & Youth services). This shows that, state's expenditure on education increased by 17.62 % in the year 2004-05 as compared to Rs. 3034.39 crores in the year 2003-04.

Health

Generally mortality indicators like death rate, infant mortality rate and expectation of life at birth measures the health status of a state. In Kerala Mortality indicators shows that health status is far advanced and higher than the all India average and is even comparable with developed countries. The state of Kerala has achieved this excellent progress of health status through widespread growth of medicine in public, private, co-operative sectors combined with People's health awareness. Health care system in Kerala's constitutes allopathy, ayurveda and homoeopathy.

The basic health indicators of Kerala and India in2004 are

 

Health Indicators	Kerala	India
Birth rate (per '000 population)	16.70	24.80
Death rate (")	6.30	8.00
Infant mortality rat (")	11.0	60.0
Maternal mortality rate (")	0.30	4.37
Total Fertility rate (per woman)	1.99	3.30
Couple Protection rate (%)	72.10	52
Life at birth Male Female Total	71.67 75.00 71.00	64.10 65.80 64.80

Source: Directorate of Health Services

Major Industries

Handloom Industry

The handloom industry stands second to the coir industry in providing employment among the traditional industries of the state This sector in Kerala is concentrated in Thiruvananthapuram and Kannur districts and in some parts of Kozhikode, Palakkad, Thrissur, Ernakulam, Kollam and Kasaragod districts and employs about 1.75 lakh people in Kerala. The co-operative sector (consists of factory type and cottage type societies.) dominates this industry with 94 per cent of looms. six per cent of the remaining handloom units is owned by Industrial entrepreneurs .

Of the total number of 50200 looms in the State, the share of Kannur District is around 11000. There are 73-registered co-operative weavers' societies and 79 private handloom units in Kannur and most part of these units are engaged in the production of export variety items. The handloom sector of the State is mainly in the production of various varieties such as dhotis, furnishing material, grey saree and lungi. Estimates show that of the total production the production of these items comes to 67%. There has been a significant increase in the overall production of cloth in Kerala of 1.82 million meters from 60.48 million meters in 2003-04 to 62.30 million meters in 2004-05. Of the total production, 96.15 % is contributed by the co-operative sector and the balance of 3.85% is by the units in the entrepreneurial sector.

Major initiatives in handloom industry

• A new strategy for development of handloom industry has been formulated by involving Self Help Groups of weavers and submitted three projects, THANIMA at a cost of Rs.14.64 crores for Thiruvananthapuram District, KRITHIKA at a cost of Rs.11.08 crores for Kannur district and PRATHIBHA at a cost of Rs.12.68 crores for Ernakulam and Palakkad districts.
• Another scheme is Deen Dayal Hathkargha Protsahan Yojana (DDHPY), under this scheme cluster development approach was taken as a component for the development of handloom industry. The scheme covers both co-operative and non-co-operative weavers under fold. Out of the 385 project proposals sent to Government of India, 295 were sanctioned. Also, Government of India released an amount of Rs.2644.98 lakhs so far. This along with the state share, amounting to Rs.5660.30 lakhs, has been released to the beneficiary societies as on 30-9-2005.
• The National Institute of Fashion Technology, New Delhi had identified Kozhikode Handloom Cluster for a project on Development of Craft/Textile cluster to be implemented as a special project under Swarna Jayanthi Gram Swarozgar Yojana. The Ministry of Rural Development, Government of India with 75% Central share and 25% State share, proposes the project.
• Government of India has also approved sanction for the establishment of Handloom Project Development Centre (HPDC) at Balaramapuram and an amount of Rs 39.38 lakh is released for setting up of weaving equipment, dyeing equipment, printing equipment, design development equipment etc.
• Procurement and marketing of handloom fabrics in the state are being undertaken by two state level organizations, namely,
  • Kerala State Handloom Weavers Co-operative Society (Hantex) is the apex organization of handloom co-operatives. Main activities of Hantex include distribution of required inputs to member societies and procurement and processing of goods produced by the member societies.
  • The Kerala State Handloom Development Corporation (Hanveev) that was set up in 1968 is another agency to accelerate the development of handloom Industry in the state. During the year 2004-05, the Corporation procured yarn worth Rs.424.16 lakhs compared to Rs.506.51 lakhs in the previous year.
    

Power loom Industry

In Kerala, the total number of power looms is 3800, out of which 1381 are in the co-operative sector. Mostly the looms are in Kannur, Thrissur and Palakkad districts. In Kerala the number of power loom co-operative societies at the end of March 2005 was 33 and the number of members 6600, out of which 1223 are women. Production of cloth increased from 60 lakh meters in 2003-04 to 62.15 lakh meters during 2004-05 and its value increased from Rs.735 lakhs to Rs.761.34 lakhs.

Coir Industry

Coir Industry has been a long-established industry in Kerala.It generates employment to more than 3.75 lakh workers, out of which 76 per cent are women. As part of the government effort to facilitate existing units in the co-operative sector and to open such units in the private sector, Coir department is offering 50 per cent subsidy on their capital investments limited to Rs. 10 lakhs per unit.

In coir sector the total expenditure made was of Rs. 30.52 crores for various plan schemes. Among the items of export handloom mat, tufted mat, coir pith, power loom mat, rubberised coir and coir fibre have showed an increase. During the year 2004-05 the export of coir and coir products from India was 122926.78 tones valued at Rs. 47340.27 lakhs. USA is the largest importer of coir products from India, followed by Germany, UK, France, Netherlands and Italy.

In Kerala COIRFED is the Apex Federation of Primary Co-operative Societies, which are engaged in the manufacture of coir fibre, coir yarn and coir products. The Coirfed markets their entire output, while the coir products are marketed by concerned societies themselves. The turnover of Coirfed during 2004-05 was Rs. 14.50 crores.

Major initiatives taken in coir industry

• A scheme called Common Facility Service Centre is being implemented to help small-scale producers in coir sector. During 2004-05, an amount Rs. 23.36 lakhs was expended for this scheme and for various welfare schemes of coir workers a sum of Rs 486 lakhs was spent. Also for Geo-textiles Development Programme an amount of Rs.50 lakhs was spent.
• Steps have been taken to initiate actions for setting up a National Coir Research and Management Institute in order to strengthen the R & D activities in the coir sector with a view to enable the coir industry to produce more value added and new design products, to sustain an upper hand in the domestic and international markets.

Coir Parks

1. Alapuzha

(i) Cherthala Taluk - Alapuzha District
Extent - 23.40 acres
Area allotted - 21.15 acres to 14 entrepreneurs
Investment expected - Rs. 95 million
by entrepreneurs

(ii) Cherthala Taluk - Alappuzha District
Extent - 17.06 acres
Area allotted - 17.06 acres
Alottee - 4 govt. undertakings
Investment expected - Rs. 150 million by entrepreneurs

2. High Tech Coir Park At Perumon - Kollam

This High Tech Coir Park is to be implemented by the Centre for Development of Coir Technology (DOCT) Trivandrum with the support of State, central and national financing institutions at an estimated cost of Rs. 170.8 million .It will offer a meeting ground for scientists, technologists and entrepreneurs with universities, research establishments, manufacturing units and is expected to open up possibilities to develop a wide range of eco-friendly products based on coconut fibre.

Khadi and Village Industries

Khadi and village industries board activities are carried out through co-operative societies, registered institutions and departmental units by availing financial assistance from the state government, khadi commission and nationalized banks.

During 2004-05, under Rural Employment Generation Programme of Government of India, khadi board has disbursed an amount of Rs. 437.23 lakhs to 436 units as margin money grant and generated employment opportunities to 7492 persons. Also during the same year 537 co-operative societies, 1196 registered institutions, 12805 individual units and 389 departmental units were financed under the pattern of Consortium Bank Credit Schemes through khadi board. With these units' khadi and village industries produced goods worth Rs. 181.69 crore and recorded a sale of Rs. 206.87 crores. Further it provided employment to 171586 persons.

Sericulture

Sericulture is an agro-based industry promoted as a secondary occupation in Kerala. State Sericulture Co-operative Federation (SERIFED) is the nodal agency for promoting sericulture activities. A cluster based development, active involvement of local body and member societies and emphasis on post cocoon technology sector are the three components of sericulture development strategy during the 10th plan.

Under cluster-based approach for development of sericulture, 125 Grama Panchayats covering 40 clusters were selected for the integrated development of the activity. The cocoon production was 77.61 MT in 2004-05 against 59.11 MT in 2003-04.A project, called "Community Silk Weaving" has been implemented in association with the Thiruvananthapuram as a part of commercial production Taluk Sericulture Co-operative Society.

Year	Production in acre(cum)	No.of farmers (cum)	DFL's distributed (Nos)	Cocoon production (Kg)	Raw Silk Production (Kg)
2004-05	2678	4308	100645	38066	2110

Source: Serifed

Cashew Industry

The total export of cashew kernels from India during 2004-05 was 126667 MT, valued at Rs. 2709.24 crores by showing an increase of 25.63 per cent in quantity and 50.14 per cent in value. The export of this item from Kerala during 2004-05 was 79950 MT worth Rs. 1715.94 crores. It shows that the share of Kerala is at 63 per cent in terms of quantity and value. More than one crore additional man-days of employment generation in rural area were made possible
during 2004-05 due to the creditable efforts of the cashew exporters.

The unit export price of cashew kernels went up during 2004-05 and the average unit export price realized was Rs. 213.89 per Kg compared to Rs.178.96 per Kg during the previous year, recording an increase of 19.52 per cent. The unit price of cashew nut shell was Rs.10.58 per kg during 2004-05.

Mining

Kerala is rich in deposits such as heavy mineral sand, china clay, iron ore, graphite etc. Heavy mineral sand and china clay contribute a higher share of the total value of mineral production in the State. Department of Mining & Geology has undertaken exploratory drilling for china clay at the following areas

1. Erikulam and Paivalike area in Kasaragod District
2. Kadayattu near Mulavana, Kollam District

Major incentives taken for mining industry

• Environmental appraisal at various tile clay mining sites in Thrissur to ascertain the availability of sand below the clay horizon
• Investigation to map the landslide prone areas in Nadapuram, Kozhikode district
• Field study to ascertain the environmental impacts due to sand mining at Kattikunnu area of Kottayam district, Neyyar in Thiruvananthapuram district and Chavara in Kollam District
• Geotechnical studies at the proposed site for Medical College in Vattiyoorkavu Panchayat
• Impact study due to dredging activities for limeshell in Vembanadu Lake

Tourism

Success of any tourism sector depends on its scenic grandeur, moderate weather, fresh environment, hospitable and peaceable people with high tolerance for cultural diversity and the potential for creating unique 'tourism products'. Kerala is one destination that holds all these qualities and is increasingly rated as one of the must-visited destinations by foreign tourists as well as domestic tourists. In 2004, 345546 foreign tourists visited Kerala as against 294621 in 2003, showing an increase of 17.28%, which constitute 10.26% of total foreign tourists, visited India. Kerala also boasts of becoming a tourism brand listed among the 101 strongest brands in India by super brands India Pvt. Ltd and has been accorded the highly popular "Super Brand Status"-internationally known as the 'Oscars in the world of branding'. Kerala Tourism enjoys the privilege of being the only tourism destination in the listing that is being done for the first time in the country.

Trends in the last few years show an increase in the arrival of foreign touristsin Kerala, in 2004, it recorded 17.28% growth over the last year. The total revenue generated from tourism to the State in the year 2004 is worked out at about Rs. 6829 crores.

According to World Travel and Tourism Council (WTTC)

• Tourism demand of Kerala to grow by 11.6% per annum over the next decade (This is the highest recorded growth in the world, surpassing Turkey's 10.2% as well as India's 9.7%)
• A record growth of 23.5% is also predicted in terms of external account earnings from travel and tourism over the next 10 years (India's estimates for this period are 14.3% while the world average is only 6.5%)
• Tourism employment to be 2 million by 2012.

Major Tourism Destinations some of the major tourist destinations of Kerala are

Triruvananthapuram City, Kovalam, Poovar, Ponmudi, Varkala, Palaruvi, Paravoor,Alappuzha, Kuttanadu, Erumeli, Thekkady, Munnar, Vagamon, Kumarakom, Kochi City, Aluva, Kalady, Cherai Beach, Maradu, Guruvayoor, Chalakudy, Athirappalli,Parambikulam, Nelliyampathi, Malampuzha, Nilambur, Kozhikode City, Kappad,Wayanad, Kadalundinagaram, Muzhupilangad and Bekal

Major initiatives

Department of Tourism has taken various innovative initiatives in tourism sector

• Overall Strategy for marketing
  
• Initiatives in Promotion
  
• Kerala Travel Mart (KTM)
  
• India International Boat Show (IIBS)
  
• Mystiques of Malabar - Exclusive Biennial Travel MART Unveiled North Kerala
  
• Nishagandhi Dance & Music Festival
  
• Kerala's Initiative in Promoting South India
  
• International Television Campaign Extended to New Channels
  
• New Advertisement Film for Kerala Tourism
  
• Kerala becomes theme State in Dubai Shopping Festival 2004
  
• Participation in International and National Tourism Marts

Projects under implementation

Tourism department has initiated various projects for the development of basic
infrastructure at tourist destinations, improvement of tourism attractions at the destinations, creation of new tourism products and creation of en-route facilities.
The projects that are under implementation are

• Constructions of houseboat terminals are being taken up at major backwater nodes such as Alappuzha, Kumarakom, Thanneermukkom, Chettuva, Vadikkal and Neeleswaram. The construction of the terminal at Kumarakom is completed and other are in progress.
• Tourism infrastructure and basic amenities are being developed along the Pamba-Kuttanad backwater cruise routes after detailed studies through NATPAC. Tourist resorts at Pallathuruthy, Nedumudi, Kotharathode and Vattakkayal are being developed.
• Houseboats have been deployed at Neeleswaram, Parassinikkadavu, Kozhikode and Chettuva as part of extending backwater based activities to the Malabar area.Valliyaparamba is already developed as a major backwater centre. At Iringal, Azhhkal,Kotti & Ayittikadavu boat jetty complexes are being developed.

Information Technology

Kerala has all the major infrastructural requirements that are required for the proliferation of growth in the IT sector. Also, no other major State in the country has such an extensive fibre optic network, as does Kerala. Kochi in Kerala is one of India's 2nd tier cosmopolitan cities and is fast emerging as a unique IT destination, It was ranked number two in a report by NASSCOM on the country's Super ITES destinations and number three in a study of cities ideal to do business. Kochi is directly connected by two submarine cables and satellite gateways, which in fact are used to support cities including Bangalore. This clear telecom infrastructural benefit leads to better consistency and reduced tariffs. The year 2004-05 has been a period where Kerala's position in the IT sector was promising and now this is on a steady growth path.

The Government of Kerala has already taken several bold and imaginative policy initiatives that are a pre-condition for exploiting the emerging possibilities

• Techno park - Thiruvananthapuram India's first world-class, world -scale IT campus
• IT Park of KINFRA at Cochin
• Akshaya programme of Kerala IT Mission
• E-governance initiatives of the State Government like Fast Reliable Instant Efficient Network for Disbursement Services (FRIENDS)

Key Considerations

Key considerations to promote IT sector in Kerala

• The ICT policy needs to distinguish between ICT as a production sector and ICT as an enabler of socio - economic development.
• The service sector and, within it, e-governance offers the immediate and largest growth opportunity. Stimulating this market should be the first action point in the State's IT strategy.
• For successful e-Governance implementation the preconditions to be fulfilled include creation of applications and content; availability of adequate access to Internet by the population; having minimal IT literacy; and, above all, ensuring Government's commitment to the success of the programme.
• The strategy for promoting ICT as a production sector- comprising ITS, ITES and Hardware sectors - involves creating infrastructure, human capacity and urban amenities, including life style options.
• The opportunity for training people for ITES businesses, especially call centres has attracted many training companies into the market. Schemes may be formalized for certification of personnel at agent - level as well as at the supervisory - level so that skilled manpower is available to the industry. These certification schemes need to be extended to other ITES areas also like GIS, HR, data entry/data conversion etc.
• The kinds of skills, mostly behavioural, to be developed are communication, team building, leadership, personality development etc. The Government has only to play the role of a facilitator for private initiatives to enter this field.

Achievements under IT

• Malappuram - India's first e-literate district
• Chamravattom India's first e-literate village
• Vellanad and Talikkulam: India's first and second fully computerized Grama Panchayaths
• Akshaya wireless network in Malappuram -World's biggest IP based network
• Palakkad - India's first fully computerized District Collectorate
• State with 99% of its high schools have modern Computer Labs
• First state to use 'Edusat' for on-line learning solutions
• Information Kerala Mission - Single largest computerisation programme for local Bodies and deployment of software developed in an Indian language in the country
• First state to have Citizen's Call Centre on Government related details
• First Technology Park in India to achieve CMMI level 4

Investment Incentives

The Industrial Policy focuses on capitalizing Kerala's unique strengths to accelerate economic development facilitating rapid industrial progress thereby improving the quality of human life.

Under this policy the prevailing rates for State Investment Subsidy would continue.

• Thrust Areas Units under the thrust areas and 100 per cent export oriented units shall be eligible for a State Investment subsidy of 15 per cent of the Fixed Capital investment subject to a maximum of Rs 15 Lakhs.
• Non Priority Sectors These sectors will avail a subsidy of 10 per cent.
• Units in Backward Areas
  • Priority Sectors / Thrust Areas: Units set up in the backward districts (Industrial Centres and parks) will enjoy an enhanced rate of 25 per cent subject to a maximum of US$ 54,201.03 for priority sectors.
  • Non-Priority Sectors: The Non priority sector units will enjoy a subsidy of 10 per cent to a maximum of US$ 21,708.40.
• Pollution Control Devices: Investment in these devices shall be eligible for a 15 per cent subsidy, subject to a separate ceiling of US$ 108,386.66 .
• Existing Units: Existing units undertaking expansion, diversification and modernisation shall also be eligible for subsidy at the above rates.
• Special Package of incentives: These incentives are offered to projects with a capital investment exceeding US$ 10.8330 million (on a case - case basis).
• Infrastructure Projects: Special package of incentives will be offered for large infrastructure projects.
• Units located in Large Industrial Parks: These units will enjoy
  • Exemption from Electricity Duty and Enhanced Tariff for a period of 5 years applicable to new units.
    
  • Waiver of Stamp Duty and Registration Fees.

Scheme / Incentives for the Revival of sick Small Scale Industrial Units

The following incentives are offered to small-scale units that can be revived owing to their viable potential.

• Waiver of penal interest of damages from accounting year of the unit in which it started incurring cash losses continuously.
• Reduction in Rate of interest: Existing rate of interest for term loan to be reduced by not more than 3% in case of tiny/decentralized sector and not more than 2% for other SSIs below documented rate.
• Cash Losses Funding: Cash losses likely to be incurred in the initial stages of rehabilitation programme till unit reaches, break-even point can be financed.
• Promoter's contribution towards rehabilitation package: Minimum 10% of additional long-term requirements in the case of tiny sector and 20% of other units.

Incentives in the Biotechnology Sector

• Approve Biotech interventions and regulatory requirements through an exclusive and effective single window system.
  
• Biotech units will be permitted to acquire agricultural land in excess ofcurrent ceiling limits.
  
• Government lands offered to biotech enterprises at concessional rates.
  
• Industrial power tariff is to be made applicable to Biotech industries.
  
• Key Biotech companies will be awarded power at agricultural rates.
  
• Exemption from statutory power cuts and electricity duty.

Incentives in the Information Technology Sector

The Information Technology Policy (2001-2005) was formulated with a view to ensure the growth the development of the IT growth. The policy also endeavours to delineate a strategy for harnessing the opportunities and resources for the overall economic and social development of the state.

The main incentives offered to IT firms are

• Standard Investment Subsidy of 20 per cent of the Fixed Capital Investment, subject to upper limits
  
• Incentives on slab basis for providing a pre-determined number of employment opportunities
  
• A single time payment of US$ 10852.54 for quality certifications like CMM Level 5, for units with registered office in Kerala.

Policy Framework

Industrial & Commercial Policy 2007

Vision

To convert Kerala into an investment friendly destination and to achieve consistently high economic growth with specific thrust to social objectives, without adversely affecting ecology and environment and to create employment opportunities for the people in Kerala and ensuring them fair wages.

Objectives

1. Convert Kerala into a favoured destination for Manufacturing, Agro Processing, Health Services, Knowledge based Industries and Services.
2. Enabling growth, revival and diversification of State Level Public Enterprises.
3. Strengthening and modernization of Traditional Industries.
4. Accelerating the fast growing Services and Commerce sector.
5. To develop Kerala as a global centre of excellence with state of the art education and skill sets and preparing a pool of multi skilled, technically competent individuals and organizations.
6. Creation of additional employment of 5 lakh persons in the manufacturing and service sectors.
7. To sustain industrial and economic growth by facilitating accelerated flow of investment.

Strategy

To meet the above objectives the strategy for industrialization of the State during the policy period will be as follows:

1. To develop Industrial infrastructure facilities in various locations of the State through KSIDC, KINFRA, DIC, SIDCO and Private Sector.
2. To encourage Industrial Corridors / Cluster Development in potential locations.
3. To restructure and retain potentially viable State Level Public Enterprises (SLPEs).
4. To focus on Agro Based Industries & products.
5. To promote / help facilitate establishment of specialized skill development institutions at key locations suitable for the manufacturing, knowledge based industries.
6. To promote local entrepreneurship through institutional mechanism and mass participation
7. To work in coordination with Chamber of Commerce / industry associations and other trade bodies to have continuous feed back on the state of industries and commerce and the support measures required.
8. To improve investment climate through investment protection, decentralization, facilitation and by creating more growth opportunities
9. To attract Foreign Direct Investment with specific criteria.
10. To ensure time bound clearances from all Departments / Agencies for speedy implementation of Projects.
11. Exploiting mineral wealth of Kerala in a scientific manner through Public Sector Enterprises.
12. To move towards a low tax, high growth regime.
    

Full text of the policy

IT policy

Objectives

In line with this broad strategy, the Government have set the following immediate objectives for the promotion of the IT industry in the State.

1. To establish Kerala as a leading IT destination in the country within the next five years.
2. To provide a nurturing and enabling environment conducive to the vigorous growth of the local IT industry in the State.
3. To significantly enhance direct and indirect employment creation in the IT sector.
4. To attain a minimum growth level of 100% every year in IT.
5. To significantly accelerate the levels of investment inflows including foreign capital into the hardware, software and ITES sectors.
6. To aggressively promote the State as the destination of choice for emerging IT business opportunities including IT Enabled Services, new media products and E-services. To establish ITES as the definitive core competence of the State.
7. To develop Kochi as an international media and ICT hub.
8. To consolidate and expand the Techno park, Trivandrum as a leading software and HR Centre in the region.
9. To provide the physical and institutional environment for the growth of SOHO and decentralized IT businesses.

Policy initiatives

• Creating an appropriate pro-business, pro-enterprise, legal, regulatory and commercial framework to facilitate the rapid growth of the IT industry in the state.
• Establishing Kerala as a global center for excellence in Human Resources, through the creation of a large pool of diverse, multi-skilled technically competent manpower in the State and
• Establishing an internationally competitive business infrastructure and environment for the IT industry in the State, on par with the best facilities and practices worldwide.

Full text of the policy

Labour Policy

Objective

1. Fostering an enabling environment for rapid employment generation through enhanced private and public investment, in order to achieve the goal of creating 15 lakhs of new jobs in the coming five years.
2. Retraining and rehabilitation of retrenched labour in closed and sick units.
3. Improving working conditions, providing decent wages and basic lifeline Social Security for workers, especially in the unorganised sector.
4. Minimizing adversarial Labour relations and providing Labour market security, employment security, work security, and income security for the working population.

Vision

This policy is the statement of the concerns of this government for the welfare and protection of labour and to endeavour to empower them and improve their quality of life. Increased production, productivity coupled with a harmonious and peaceful labour relations and a new work culture only will create a conducive climate for rapid industrial investment and growth. This will ensure the successful solutions to the twin problems of retrenchment of labour and creation of new jobs for the unemployed. Government is also committed to providing labour market security, income security and decent working conditions for the working population. This labour policy aims to carry forward these objectives. These aims can be attained only if there is tripartite and mutually beneficial partnership between employers, workers and the Government.

Labour Policy Highlights

• Creative measures to attract public and private investment.
• 15 lakh new jobs in the coming five years.
• A unified and consolidated legislation for social security schemes.
• New Social security schemes for workers in the unorganised sector.
• Social security cards for workers.
• Unified and beneficial management of funds of Welfare Boards.
• Reprioritisation of allocation of funds to benefit vulnerable workers.
• Model employee-employer relationships.
• Long term settlements based on productivity.
• Vital industries and establishments declared as `public utilities`.
• Special conciliation mechanism for projects with investments of Rs.150 crores or more.
• Industrial Relations committees in more sectors.
• Labour Law reforms in tune with the times. Empowered body of experts to suggest required changes.
• Referenda for recognition of trade unions.
• Statutory amendments for expediting and streamlining the mechanism of Labour Judiciary.
• Amendments to Industrial Disputes Act in tune with the times.
• Efficient functioning of Labour Department.
• More labour sectors under Minimum Wages Act.
• Child labour act to be aggressively enforced.
• Modern medical facilities for workers.
• Rehabilitation packages for displaced workers.
• Restructuring in functioning of employment exchanges. Computerization and updating of database.
• Revamping of curriculum and course content in industrial training.
• Joint cell of labour department and industries department to study changes in laws and rules.
• Kerala Institute of Labour & Employment to be upgraded.
• Policy progress monitoring team to review progress of implementation of policy.

Full text of the policy

Kerala Bio-Technology policy

Objectives and goals:

The Biotechnology policy for Kerala is designed to catalyse the development and application of Biotechnology, taking advantage of the state's resources and emphasizing its specific needs while meeting global requirements. The policy is aimed to ensure the rapid exploitation of pipeline technologies and opportunities available in the state to products and processes and to promote the sustained build-up of an elite knowledge cadre and knowledge base through the strengthening and creation of educational and Research & Development (R&D) institutions, establishing infrastructure and putting in place administrative, regulatory, legal and financial framework conducive for investment and growth of Biotechnology enterprises, for the economic development and human welfare.

The specific objectives and goals are:

• Create a biotech knowledge base and human resources by establishing world-class centres of education and R&D in biotechnology by upgrading existing institutions and/or organizing new entities in the public and private sectors (eg. on the lines of Birla Institute of Technology, Pilani).
• Apply biotechnology tools to:
  1. enhance the value with adequate assurance of quality in the State's export-oriented resources such as spices and related plantation crops, seafoods and marine resources;
  2. upgrade productivity and evolve new application in rubber, coconut, tuber crops and develop novel internationally competitive products;
  3. ensure the sustainable and eco-friendly exploitation of the State's forest, animal and marine wealth;
  4. boost the State's renowned health care practices of Ayurveda by synergising traditional knowledge with the scientific validation and technical product profiling and clinical data base and by evolving means to conserve and substantially use one of world's most-valued biodiversity treasures located in the State.
  5. promote traditional tribal and ethnic knowledge in medicine and other areas of human welfare by scientific validation and facilitating intellectual property rights.
  6. develop recombinant DNA and other modern technologies to combat the major health hazards of the State such as cancer, diabetes and cardio-vascular and other physiological disorders; to develop diagnostics and vaccines for overall healthcare as well as to protect the State's agriculture, spice, plantation and forest crops, from biotic and a biotic stresses.
  7. enhance the quality of the environment and promote sustainable development;
  8. provide an ambience with a package of guidelines for financial support and incentives, legal and labour reforms as well as institutional autonomies needed for the healthy, efficient and competitive growth of biotechnology knowledge base and industry

Full text of the policy

Useful Web links

• Government of Kerala
  
• Department of Industries
• Department of Information Technology