Saturday, April 07, 2007

Kerala ‘can grow 10 times faster’

Kerala can grow at least ten times faster than the current pace if it combines economic reforms with the advances it had already made in human development, according to Dr Vinod Thomas, the World Bank’s Director General-Evaluation.

The short-term benefits of such a developmental strategy would start becoming visible within the next three to five years itself, as the State is now ready to reap the gains of the heavy investments it had made in the past in human development, he said here.

The State must focus on the new generation industries such as information technology, biotechnology and other knowledge-based industries as well as eco-tourism and tertiary education sector.

The world has changed much in the recent periods, and you can drastically accelerate the growth rate if you concentrate on such industries because the demand for them is not only from within, but from across the globe, he said adding Kerala economy was propped up by $5.5bn annual remittances from 3.5mn Keralites working abroad. At present, very little of it comes to productive investments and much of it was contributing to consumption and property purchase in the State.

The government must take proactive steps such as providing better incentives to transform the remittances into productive investments while strengthening the financial infrastructure to smoothen the flow of the remittances into productive investment avenues.

Meanwhile, the state last week received the first tranche of the Asian Development Bank assistance for the $336mn project for improving urban infrastructure.

The Kerala Sustainable Urban Development Project targets urban infrastructure development in five cities of Thiruvananthapuram, Kochi, Kollam, Kozhikode and Thrissur.

Besides, the ADB loan, it will be backed by $59.8mn as contribution from State government and $35.1mn from the five beneficiary civic bodies themselves..