Kerala Economy – Artifex.News

Tariff war will worsen economy more than COVID-19 pandemic: Kerala Finance Minister K.N. Balagopal

admin — Tue, 05 Aug 2025 08:59:00 +0000

Economist M.A. Oommen speaking at the seminar ‘Post-COVID Development Challenges and Response: Kerala through the lens of State budgets’ organised by the Gulati Institute of Finance and Taxation in Thiruvananthapuram on Tuesday. Finance Minister K.N. Balagopal is also seen
| Photo Credit: special arrangement

Kerala Finance Minister K.N. Balagopal has warned that Kerala needs to prepare well to tackle the ‘tariff war’ looming over the economy, propelled by the recent tariff policies of the United States and other global players.

Mr. Balagopal was speaking after inaugurating a two-day seminar ‘Post-COVID Development Challenges and Response: Kerala through the lens of State budgets’ organized by the Gulati Institute of Finance and Taxation (GIFT) in Thiruvananthapuram on Tuesday (August 5, 2025).

“It has to be examined how these policies impact the Indian economy and specifically Kerala, whose exports cover multiple sectors,” he said.

The Finance Minister suggested that the academic community organise a roundtable discussion on the implications of these policies for India and Kerala to generate clarity on what lies ahead for the economy.

‘Dangerous situation’ ahead

Mr. Balagopal said he perceived a “dangerous situation” ahead, referring to recent demands that ‘India should reduce its tariffs.’

“The tariff war looming over us will worsen our economy further,” he said, adding that the influx of imports at low tariffs would create an economic situation “much worse than the COVID-19 pandemic.”

M.A. Oommen, eminent economist and Distinguished Professor at GIFT who chaired the session, underscored the need for Kerala to focus on the protection and conservation of its rich biodiversity, tackle the spectre of corruption and nurture the public sector enterprises. Mr. Oommen lauded Mr. Balagopal for an “excellent linear programming exercise” in steering Kerala’s economy through a period of fiscal stress.

Pointing out that major challenges lay ahead for the economy in the years ahead, he urged Left democratic forces to rise up to the occasion.

C. Balagopal, chairman, Kerala State Industrial Development Corporation (KSIDC), said current policies and public finance constraints should be understood within the framework of whether government policies are promoting the growth of value addition in sectors, and what needs to be done to generate more value addition in them. “How the sectoral distribution of the gross state domestic product (GSDP) and the State meeting total factor productivity (TFP) are pertinent questions,” he said.

Additional Chief Secretary (Finance) K.R. Jyothilal, GIFT director K.J. Joseph and GIFT registrar Saraf A. also spoke.

Senior economists and planning experts are attending the seminar which focusses on development issues that Kerala has been facing since the pandemic.

Published – August 05, 2025 02:29 pm IST

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Kerala needs a comprehensive creative economy policy to unlock growth potential

admin — Wed, 30 Jul 2025 04:57:00 +0000

As Kerala positions itself toward a knowledge-based economy, it is imperative that we recognise and harness the untapped potential of the creative and cultural sector — a sector that has long flourished informally but now deserves structured policy attention and investment.

Kerala’s demographic and economic realities make a strong case for embracing the creative economy. Traditional industrialisation is challenged by the State’s limited land availability, high population density, and comparatively high labour costs. Moreover, youth aspirations have shifted dramatically. Many young Keralites, while globally renowned for their work ethic — particularly in healthcare and IT sectors — are increasingly reluctant to take up blue-collar jobs back home. As a result, it is estimated that over one-third of Kerala’s informal workforce now comes from other Indian States.

While Kerala has made notable strides in the IT and consulting sectors, inclusive development demands we address opportunities for those outside the formal tech pipeline — particularly freelancers, women, and creative entrepreneurs.

According to the Periodic Labour Force Survey 2023, Kerala’s female labour force participation stands at only 25.5%, far below the national average of 37%, despite having the highest female literacy rate in the country.

Cultural and creative legacy

Kerala has always punched above its weight culturally. Malayalam cinema, acclaimed for its storytelling and innovation, has earned national and international recognition— with recent blockbusters reaching audiences far beyond state borders. Events such as the Kochi-Muziris Biennale, Asia’s largest contemporary art festival, and traditional spectacles such as Thrissur Pooram and Nehru Trophy Boat Race, attract global visitors — yet their economic impact remains largely unmeasured and underleveraged.

The creative talent pool in Kerala is broad and dynamic — spanning film, animation, visual effects, architecture, design, advertising, performing arts, fine arts, and digital media. The success of Keralites across global creative industries is a testament to this vibrant ecosystem. This has not happened by accident — it is the result of progressive movements, social investments, and education reforms over the decades.

Cultural capital to creative capital

Kerala’s cultural richness is deeply embedded in its architecture, literature, and traditional art forms such as Kathakali, Mohiniyattam, Theyyam, and Koodiyattam — many of which are now recognised as UNESCO Intangible Cultural Heritage. Institutions such as Kerala Kalamandalam, established in 1930 and now a Deemed University, have not only preserved endangered art forms but also attracted international students, making Kerala a hub of cultural exchange.

The State has also invested in contemporary institutions such as the K.R. Narayanan National Institute of Visual Science and Arts and the Kerala State Institute of Design, alongside a growing network of media schools and fine arts colleges. These are strong building blocks for a formal creative economy.

Time for a unified policy approach

Despite this potential, Kerala’s creative sector remains fragmented and underserved. While progressive initiatives such as the Kerala Design Policy and the AVGC-XR Policy (focusing on animation, visual effects, gaming, comics, and extended reality) are commendable, a comprehensive, inclusive, and coordinated ‘Creative Economy Policy’ is urgently needed.

Such a policy should: Recognise all sub-sectors — from performing arts and digital content to crafts and design. Support entrepreneurship, local economic development, and export-readiness. Enable structured skilling, mentoring, and incubation for creative professionals. Drive inclusion, particularly for women, youth, and traditional artisans. Build robust infrastructure for festivals, residencies, and marketplaces.

A global template

Kerala can look to models such as the UK’s Creative Industries Council, a cross-industry body that advises the government on the needs and opportunities in the sector. A similar entity in Kerala — a Kerala Creative Industries Council — could streamline policies, remove duplication across departments, and provide long-term strategic guidance.

An economic engine for the future

The creative economy is projected to represent 10% of global GDP by 2030, according to UNESCO. India’s Ministry of Information & Broadcasting has already identified the AVGC-XR sector as a ‘sunrise industry’, and global players such as Netflix and Amazon are investing heavily in Indian content.

Kerala is well-positioned to ride this wave. With geographic charm, cultural depth, and abundant talent, the State has all the ingredients to become the ‘Cannes of India’ — a hub for creative excellence, tourism, and cultural commerce.

What Kerala needs now is a focussed, inclusive, and tech-enabled strategy to turn its cultural capital into creative capital. With the right ecosystem, we can build a future where Kerala’s creative products are ‘Made in Kerala, Consumed by the World.’

The author is Country Head, World Design Council – India

Published – July 30, 2025 10:27 am IST

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Kerala Financially Distressed Due To Poor Governance By UDF, LDF: Nirmala Sitharaman

admin — Thu, 28 Mar 2024 17:28:55 +0000

No money has been spent on development of the state, claimed Nirmala Sitharaman (File)

Thiruvananthapuram, Kerala:

Union Finance Minister Nirmala Sitharaman on Thursday said that, according to the Reserve Bank of India, Kerala is one of the top five financially-stressed states in India, and alleged that this was due to the poor governance of successive UDF and LDF governments in the state.

The union finance minister claimed that there has been “continuous” poor fiscal management by both the CPI(M)-led Left Democratic Front (LDF) and the Congress-led United Democratic Front (UDF) — either of whom were always in power in the state.

She also said that in the past six years since 2016-17, the Kerala government has far exceeded its permitted borrowing limit of 3 per cent and has resorted to extra-budgetary borrowing to the tune of over Rs 42,000 crore.

Nirmala Sitharaman said that this off-budget borrowing was carried out through entities such as Kerala Infrastructure Investment Fund Board (KIIFB) and Kerala Social Security Pension Company Ltd, which have no revenue of their own.

“Since they have no revenue of their own and cannot repay the loans, who has to repay it? It has to be repaid from the government treasury. Which means the people of Kerala end up paying for it,” the minister said after inaugurating the BJP-led NDA’s Lok Sabha poll convention here.

Despite this, no money has been spent on development of the state, she claimed.

The union minister also said that while the UPA government was in power at the Centre and there were eight ministers from Kerala, the state only got Rs 46,303 crore in tax devolution and around Rs 25,000 crore as grants-in-aid from 2004 to 2014.

However, from 2014 to February 29, 2024, the Narendra Modi government has given the state Rs 1,55,649 crore in tax devolution and Rs 1,58,983 crore as grants-in-aid, even though there were no ministers from Kerala, she said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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