By IANS
Thiruvananthapuram : Kerala needs to productively use Rs.200 billion it receives through annual remittances from people working overseas and increase its share of foreign direct investment (FDI) to reduce its per capita debt, the state’s Economic Review for 2007 has said.
The review, released here late Tuesday ahead of the state’s budget to be presented Thursday, said that per capita debt stands at Rs.12,681 in 2005, up from Rs.7,414 in 2001, the highest among the four southern Indian states.
In comparison, per capita debt of Andhra Pradesh was Rs.8,427, Karnataka Rs.7,446 and Tamil Nadu Rs.7,782 in 2005, the review said.
Kerala’s debt has been steadily rising, from Rs.114.2 billion in 1996-97 to Rs.269.5 billion in 2001-02 and a staggering Rs.571.38 billion in 2007-08.
Speaking to IANS, K.J. Joseph, economist at the Centre for Development Studies here, said that although this is a cause for concern, it was nothing alarming.
“Look into the human development index of Kerala in comparison to other south Indian states. We in fact lead the rest of the country. This is the same in literacy too. Kerala has achieved remarkable progress in social sectors because of heavy spending. It is quite natural that the debt profile would be like this,” said Joseph.
He said the easy way out of this debt would be to put foreign remittances into productive uses.
“Another area where Kerala should strive is to change the situation that despite the state having three percent of the total population of the country, we have just a miniscule percentage of the foreign direct investment that happens in the country.”
Currently Kerala has attracted a mere 0.3 percent of the $21-billion FDI in the country, the economic review said.
“Just imagine a scenario if Kerala gets a share of the FDI equivalent to the proportion of the national population. If that happens, then Kerala will not have to look back anymore.”