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Monday, January 31, 2011

pardoxes in kerala model


Amartya Sen has suggested that the Indian province of Kerala proves that greater state involvement can lead to better social indictors (even if it does not lead to higher incomes). Kerala boasts the highest literacy rate (93%), and lowest infant mortality rate (12 per 1000) (2) among all Indian states. Kerala also does well on several other development indicators and is on par with some developed countries and above the average for developing countries (Table A.1 in Appendix). However, the human development indicators are in sharp contrast to the state income, $380 (3) per capita, which is lower than developing country average. This success with human development indicators despite low income is called the Kerala model, experience or paradox.

Sen (1990) attributes Kerala's better social indicators to state involvement in education, which started in 1817. In addition, Sen (1990) emphasizes that the high female literacy due to higher public expenditure in education has lead to more civic society involvement in Kerala, especially in areas such as political decision making and public action. Indeed, Kerala's success with human development indicators highlights Sen's (1987, 1999) capabilities argument that there is more to development than just GDP statistics.

The success with social indicators motivates academics and politicians to promote Kerala's success as a model for the rest of India. Indeed, high literacy, better health awareness, high life expectancy and low infant and maternal mortality rates lend credibility to the hypothesis that human development can be achieved despite low incomes. Still, this success in social indicators is apparently not correlated with higher GDP levels in Kerala, and that is a puzzle.

Kerala has a unique history in India. It has had a matrilineal society since the 11th century practiced especially among the upper caste Nayars. The 1891 Census enumerated that close to 56% of families in Kerala were matrilineal. (4) This is significant to the development story of Kerala, especially since female empowerment forms an important part of development histories. This also fits in with Sen's argument that female literacy is important for development success. The history of Kerala is filled with active citizen involvement and agitation demanding participation in government decision-making process. (5)

Several scholars who have studied the significance of Kerala's achievements echo Sen's ideas and insist that higher government expenditure in social sectors is a reason for Kerala's outstanding achievements in these areas. Franke and Chasin (1996), for example, conclude that government expenditure in social sectors contributed to their development and argue that redistributive policies are not the cause of high unemployment in the state. They are concerned about structural adjustment and believe that removing subsidies and investment hurdles would worse--n the conditions for entrepreneurs and individuals in the state and, instead, conclude that the state should move towards implementing decentralized planning.

Pillay, Rishi and Kulkarni (2007) focus on the role of women in Kerala development and use inter state comparisons to show that Kerala women have performed better on several counts such as literacy, life expectancy and labour force participation to name a few. They show through a simple regression model of Gender Development Index (GDI) on Human Development Index (HDI) that GDI is positive and statistically significant and thus hypothesize that gender development is a pre-requisite to human development. Although Ramachandran (in Parayil 2000, pp. 112) does not explain the reasons for low-income levels in Kerala, he states that consistent and increasing government expenditure on health and education are the reasons for higher literacy and better health awareness in Kerala. He fears that structural adjustment and reforms at the centre will endanger the sustainability of the Kerala model of development. He also argues that the Kerala model is not replicable in India unless the government at the centre leans left.

Some scholars have questioned the Kerala model. Most of these studies, however, have stressed that the social development indicators in Kerala are exaggerated. Kurien (in Parayil 2000, pp. 178-179), for instance, remains sceptical of the Kerala social development indicators and suggests that social indicators such as literacy, infant mortality, life expectancy etc. are prone to central tendency of the distribution. As he argues, Kerala has significant outliers, such as the marine fishing community, that reinforce the idea that low incomes and low quality of life are correlated.

Moreover, as Ramanathaiyer and McPherson (2000) point out, the higher literacy rate in Kerala does not really translate into higher number of people capable of reading. Through primary surveys they conclude that the aggregate social development indicators (such as low infant mortality, high literacy and life expectancy rates) in Kerala hide several inequalities and inefficiencies. Tsai (2006) similarly points out that the Kerala model is not really a model and is just a combination of several historical and cultural attributes that are unique to the province. She states that even for Kerala it is not a sustainable feature because of mounting fiscal deficits and so is much less useful as a replicable model for other developing regions.

Moreover, it would be a mistake to look only at the absolute values of these (admittedly) flawed social development statistics. (6) If we look at the growth rates, Kerala growth rates on these variables are commensurate with growth rates in other Indian states. Additionally, on several of these measures, Kerala had a head start; i.e, the beginning period numbers are higher for Kerala than India. For example, in absolute numbers Kerala life expectancy values seem remarkable at 72, compared to 61, the Indian average. However, if we look at the rate of change in life expectancy between 1961 and 1995, it is 56% for Kerala and 52.5% for India. Kerala has only grown at a rate slightly higher than India. Kerala's achievements in terms of life expectancy do not seem that remarkable when we look at growth rates. Similarly, Kerala's high literacy numbers were at 64% (for men) in 1961 as opposed to Indian values of 34% (for men). The growth rate in literacy is 45% for Kerala and 79% for India. As Sen rightly points out, there is a deep historical component to literacy in Kerala that cannot be ignored. In addition to the Queen's proclamation in 18177, the role of Christian Missionaries in setting up schools in Kerala cannot be ignored. The state has been the centre of a thriving market economy since at least the 15th century. (8) It was also the seat of the spice trade and still remains a main portal for trade in goods and services. Thus, if we look at relative growth rates and historical facts, Kerala growth in terms of the above mentioned important human development indicators are not remarkable achievements in the last fifty years or so.

Although much of the literature on Kerala is sympathetic to the state led development idea, there is some scepticism about reported statistics. So far, however, all of the sceptics have challenged the notion that social indicators in the region are as high as some pretend. Income in the region, however, is also understated. If social development indicators are overstated (i.e. growth in human indicators is commensurate with national averages) and income statistics are understated then Kerala is not a paradox at all and, contra Sen and others, its usefulness as a model for development is questionable. The aim of this paper is, thus, to unravel the Kerala paradox through triangulation of data on different economic and social variables. The structure of the rest of the article is as follows. Section H demonstrates that Kerala income is understated, Section III explores the reasons for underreported income in the state, Section IV, offers concluding remarks.

Although official GDP statistics indicate low income in Kerala, these numbers do not capture all income in the state. One way to arrive at a good approximation of income levels is to look at household consumption data. Higher household consumption of both basic and durable consumer goods indicates higher income levels. Thus looking at average consumer expenditure on food and other commodities would give us a better idea about the wealth or impoverishment of the citizens. In terms of monthly per capita consumption expenditure, Kerala has been among the top five in the country, for major states. (9)

For instance in 1993-94, the average monthly per capita consumption expenditure (MPCE) for rural Kerala was Rs.390, which was the second highest for major states. Similarly, MPCE for urban areas was Rs.494, which was the third highest in the urban category. The Indian averages for the same time period were Rs.281 and Rs.458 respectively. (10) Similarly the average per capita monthly expenditure on durable goods in rural Kerala is the second highest among major states at Rs.20.2 as against a national average of Rs.7.7, and in urban areas it is the highest in the group at Rs.24.6, against a national average of Rs.15.2. (11)

If we expect income and expenditure to be highly correlated then it is possible that Kerala has income levels higher than the official numbers. In fact, what is pointed out as a distinguishing factor about Kerala is that despite low income levels, one does not find widespread poverty. (14) Unlike other states in India, even big cities in Kerala apparently do not have beggar-lined streets. (15)

In addition, Kerala has the lowest measure of poverty and proportion of households without any assets. If we look at measures such as ownership of land, houses and other consumer goods it does not seem like Kerala is poor (at least compared to other Indian states). The average value of assets held by rural households is Rs. 5.10 lakh (Rs. 510,000 or $11,861), the fourth highest in the country, and among urban areas Kerala has the second highest average value of assets per household at Rs.7.62 lakh (Rs.762,000 or $17,721). (16) Both these numbers are higher than Indian averages which are Rs. 2.66 lakh (Rs. 266,000 or $6186) and Rs.4.17 lakh (Rs. 417,000 or $9698) for rural and urban households respectively. Asset ownership in Kerala is almost twice as much as Indian averages.

Likewise, pattern of asset holdings was the same even in earlier years. (17) Kerala had the third highest value of average ownership of assets both in rural and urban areas in 1991. The values are Rs. 182,000 and Rs. 222,000 for rural and urban areas respectively. The same numbers for India are Rs. 107,000 and Rs. 144,000. Besides the National Sample Survey which published the above asset ownership results, the National Family Health Survey (NFHS) results indicate that close to 90% of urban households and 94% of rural households in Kerala own houses. (18) The same survey has developed an index that indicates that about 18% of the population has low standard of living, while about 53% has medium standard and 28% has high standard of living. (19)

A third measure, which can also be used to proxy income levels, is access to private health services. A poor economy will have fewer people enjoying private health services because of low incomes and access to subsidized public health services. If incomes in Kerala are indeed low, and there is adequate access to public health centres, we should observe a majority use of subsidized public health services. The reality in Kerala is quite the contrary as the National Family Health Survey (NFHS) reports. In Kerala, private medical sector is the primary source of health care for up to 64% of households in urban areas and 60% of those in rural areas. (20) Even though up to 74% of rural households have a public primary health centre in the village (21) 42% of low standard of living households use the private sector as their main source of treatment when any member of the household falls sick. (22)

Under the Directorate of Health Services (DHS), there are 933 Primary Health Centres, 130 hospitals and 121 dispensaries, (23) and 22,234 (24) medical and paramedical personnel in Kerala. The per capita state expenditure on medical and public health has gone up from Rs.46.27 in 1985-86 to Rs.271.88 in 2003-04. (25) In fact, the reality with Kerala government expenditure on health care is that its growth rate is lower than that of private health care. Between 1961 an 1987 the average growth of per capita government health expenditure was 1.95%, and that of private health expenditure was 3.4%. In the 70s and 80s private per capita health expenditure growth was close to 5% as opposed to government expenditure, which was half of it at 2.5%. (26) If we take these numbers seriously then individuals in Kerala certainly have the income to spend on private health services where they have to pay higher fees when compared to the cheap and heavily subsidized public health sector.

The fourth indicator we should look at to approximate income levels in Kerala is the purchase of the staple food rice. Survey results from NSS 61st round indicate that although 98% of all rural households and 93% of all urban households surveyed purchased rice (staple food) from any source, only 34.6% of rural and 23.3% of urban households purchased rice through the state run Public Distribution System (PDS) outlets. In addition in recent years off-take from the PDS system has decreased to at least 46% in Kerala. (27) This indicates that even with basic food consumption a predominant share is purchased at market prices which are substantially higher than PDS prices. (28) Moreover, the price difference between PDS and open markets is high enough for PDS retailers to divert supplies to the open market and arbitrage. Again it is hard to imagine people with low incomes purchasing the staple food at higher market prices when they could buy it cheaper from a state subsidized outlet. (29)

Other data seems to confirm the claim that official statistics understate income in Kerala. One example is the government's own 1997 Voluntary Income Disclosure Scheme which offered an opportunity to persons who had evaded tax in the past to come forward and declare their undisclosed income. This scheme revealed Rs.4.7 billion ($104.5 million) as previously undisclosed income out of 6249 (.02% of population) declarations in Kerala. (30)

This is an average of Rs.0.752 million or $16,711 per declaration. This is evidence that there exists a significant volume of unreported income in Kerala which leads to understated state incomes. In addition if we measure income in PPP (Purchasing Power Parity) terms Kerala income is not really too far away from Chinese and Sri Lankan incomes. In PPP terms, the Indian GNP per capita is 2149 in 1999 international dollars. The same numbers for China and Sri Lanka are 3291 and 3056 respectively. (31) The Kerala value at 2943 (32) is not really low when compared to other developing countries that have achieved similar human development targets.

To sum up, Kerala statistics that proxy incomes through other means indicate that citizens of the state enjoy a better standard of living than is suggested by state income figures. Furthermore, several variables measuring other aspects of the local economy point in the direction that true incomes of people are higher than official income statistics. The following section explores the reasons for underreported incomes in the state.

If the incomes in Kerala are not really low there must be reasons why the official statistics show such low levels. In addition to the normal issues that all GDP statistics have with some measure of understatement, there are two aspects to understated low official income levels in Kerala. These are (i) presence of a significant unorganized sector, and (ii) remittances from abroad. This section explains these two primary causes of underreported and understated incomes in Kerala.

Unorganized Sector Labour

Kerala is well known for its onerous labour legislation that includes high minimum wages, worker compensation and pensions, which are a fall-out of the predominantly Communist rhetoric of the state. In consequence, labour unions in the state are notorious for strikes and other organized disruptive behaviour including violence and destruction of property. For example, in 2002-03 alone, up to 8,177,159 man-days were lost due to strikes and lockouts (Government of Kerala 2004). Given such staggering statistics (it should be noted that industrial disputes in Kerala are fewer now than in the last 50 years) it is not surprising that Kerala has one of the lowest concentration of industrial units both for the region and for the nation. It follows that employers and entrepreneurs also find it more efficient to operate in the unorganized sector. (33) Furthermore, due to the nature of labor policy and militant labour unions in Kerala, there is high incentive for entrepreneurs to either underreport both employment and income numbers to avoid paying taxes or avoid registering with the appropriate government department. Therefore, any estimate of income would be grossly understated both on account of actual income paid to employees and number of individuals employed in the organization.

Nevertheless, official estimates of organized sector unemployment rates in Kerala range from 12% to 30%, depending on the definitions and sources. (34) Zachariah and Rajan (2007) estimate that even among those unemployed, about 20%, have remained so for up to five years. If we look at the employment data the percentage of individuals employed in the organized sector has been steady at about 10% between 1994 and 2000, with the other 90% employed in the unorganized sector during the same time period25 The wide ranges within statistics released by the government, lend credibility to the hypothesis that the statistics on unemployment in Kerala are not very reliable, especially since a significant share of employment is in the unorganized sector where measurement of any kind is not easy. Additionally, recent government statistics indicate that Kerala has the highest incidence of unemployment at close to 21% (Government of Kerala, 2003).

Although it is important to note that there is unemployment of some kind in Kerala, it is also important to note that individuals self-identify as unemployed if they do not have a permanent job with benefits. (36) For instance, an individual who works three days a week on a contract basis and makes enough money to last him the rest of the week might nonetheless declare himself unemployed. Such a declaration could be for two reasons: one, because he would prefer to work under the radar to avoid labour unions which could deprive him of his job; and, two he believes himself unemployed because he does not work a regular nine to five job everyday. Including such an individual in the pool of unemployed would both underreport aggregate income and exaggerate unemployment.

Another trend that is notable in Kerala is the prevalent use of migrant labour from other states. State labour laws usually apply to state residents and the organized labour force. In Kerala, the local labour force is well organized and quite demanding. In response, we find that construction projects and even agriculture in many cases are carried out using migrant labour predominantly from Tamil Nadu. These workers can be employed at the market rate (lower than minimum wage) and since there is adequate supply of willing workers, the contractor or landowner can employ as required without having to report to administrative channels. In fact it is clear from the Kerala case that labour migration has taken care of much of the labour problems in the State. (37) Individuals who perceive better opportunities outside the state have migrated outside while those that have perceived better opportunities inside have migrated to the state. Regardless of the direction of migration, the State economy has been a net gainer. While in-migration has brought in the necessary labour force, out-migration has increased income through remittances.

The unorganized sector is just one reason for the understated income in Kerala. Prior to the estimates arrived at by Kannan and Hari (2002), the magnitude of foreign remittances into Kerala was not recognized. The measurement of remittances was also difficult since there were capital controls and there was no system to parse out the Kerala part out of National foreign remittances.

Kerala has a history of Gulf emigration since at least the 1960s. Especially since the oil crisis in the 1970s, migration to the Gulf countries from Kerala has increased manifold. The number of Gulf emigrants alone in 1999 was about 1.36 million persons. Zachariah and Rajan (2004) compute that emigrants to all countries totalled approximately 1.84 million persons in 2004. In the earlier decades close to 95% of all emigration was to the Gulf and emigrants were mostly non agricultural workers with little education and some skilled workers such as carpenters and electricians. They also state that in recent years, due to the opening up of the services sector the percent of emigres to other countries such as USA, England, Maldives and Singapore has gone up to about 10%. There is also significantly higher number of well-educated skilled workers among the emigres. However, the percent of emigres from Kerala in the Gulf countries remains at about 36%.

Kannan and Hari (2002) estimate that in absolute numbers the amount of remittances into Kerala between 1980 and 1985 was about Rs. 536 Crores (about $1.25 billion) and R.s.10835 crores (about $25.2 billion). (38) As percent of state income that remittances into the Kerala economy grew from about 17% of State Income in 1991-92 to about 24% in 1997-98, averaging about 22% in the latter half of the 90s. Zachariah and Rajah (2004) estimate that in 2003 remittances were sufficient to take care of close to 60% of Kerala state debt. Since remittances are not included in estimates of per capita income, it leads to understatement of the state income to that extent.

Additionally, Kannan and Hari (2002) also note that "By the end of the nineties remittances reached such levels that they were well above the total government expenditure, value added in manufacturing and even the value added in industrial sector as a whole". This statement indicates a level of income in Kerala that is not captured by the official income statistics. Would the same level of development and increased standards of living have been possible in the absence of almost a quarter of the State's income? It is indeed a daunting task to figure out the actual impact of remittances due to the network effects that exist in any complex society; i.e, how do we trace individual productive or consumptive activities that were undertaken with the money from remittances? Nevertheless, the fact remains that remittances are a significant portion of income that are not captured in the official statistics.

In brief, Kerala income is understated and the different indicators examined in the above analyses lend credibility to the little discussed idea of understatement of Kerala income.

Higher economic growth is indicative of emerging entrepreneurial activities that lead to higher individual incomes, better standards of living and more capability building. A well educated, well fed and disease free population has a higher probability of developing better economic opportunities. Even though building capabilities is as important as increasing incomes, mere increases in literacy and health are of little use when individuals do not have the opportunities to capitalise on their education and health to create better economic conditions. Kerala stands as an example of this phenomenon. In the presence of restrictions on productive capacity enhancement, entrepreneurial activities were conducted below the official radar, thereby projecting an image of impoverishment through official income statistics while showing remarkable achievements in human development, thus propagating the idea of a paradox or a model to be followed.

In Kerala, triangulated data from different sources indicate that there is no paradox. Incomes were merely underreported all these years. The almost meteoric increase in stated per capita income (39) especially in the last five years is proof that entrepreneurship was being reined in and pushed underground by misguided economic policies. More recently, IT fever has taken over Kerala, and its new pursuit is in becoming the first Indian state to become completely IT literate. (40) Moreover, it has joined the rest of the country in promoting Special Economic Zones and although industrial policy needs further reforms, the IT and services sector have found a way around labour unions and labour laws.

'Gender paradox'

Gender Paradox Kerala refers to the 'contradiction' whereby women's high showing in socio-demographic indicators of development exists simultaneously with their low public participation and the increasing incidence of violence upon them. Given that 'gender paradox' has become the overwhelming context for imagining women in Kerala today, this paper seeks to examine its anatomy. The paper argues that there are two divergent descriptions of contemporary Kerala which circulate with comparable energy - Kerala as utopia and as dystopia. Theorisations of paradox bring these two worlds together, but without having sufficiently reckoned with their internal dynamics. Consequently, the paper explores the interiors of these worlds. It examines utopia through two discrete, yet intersecting social discourses - (a) the Kerala model of development and (b) tourism. It then proceeds to examine dystopia through the discourses around AIDS and sexual violence, which tend to be configured in analogous ways. The paper focuses on how women are gendered in these two worlds and concludes that they evoke two very different kinds of women. In the light of these explorations the paper goes on to lay out some of the implications and inadequacies of using gender paradox as the condition for speaking about women in Kerala. It argues that, instead of serving as a site for radical critique and productive feminist politics, gender paradox often become an occasion for conservative re-telling.

The kerala pardox reveals how feminist politics are shaped by the emerging autonomous political space in contemporary Kerala. The network of autonomous feminist groups, Sthree Vedi, is challenging the hegemonic discourses of women's high status, by focusing on the gender paradox and the increased violence againt women. Sthree Vedi is discovered to be a catalyst of asserting feminist politics in the political field. The feminist network is embedded within other actors in the political field of Kerala, such as the Left women's movement, the Left political parties, and the state-apparatus. The thesis concludes by indicating how 'strategic agency' can create gendered political discourses.

The idea of gender paradox investigates gender and power theoretically by linking the field of gender and development with the debates within social movement theory. It builds a framework on the concepts of Empowerment, Agency, Political Field, Organisational Structure, Framing Processes, and Women's Interests and Identities. The study has two central theoretical arguments. Firstly, it states that the conceptualisation of empowerment requires a relational and discursive power analysis to shape social transformation. Secondly, it argues that the crucial issue for empowerment concerns the individual as well as the collective constitution and perception of agency. The thesis also explores the relationship between gender and power empirically. The study is based on extensive fieldwork between 1999 and 2001 in Kerala, South India. Eighty in-depth interviews with the female leadership of collective actors have been conducted.

The state of Kerala is internationally admired due to the 'development paradox' or the 'Kerala Model', which reflects a high level of human development despite a low economic performance. This thesis reveals another contradiction, a gender paradox. It shows that, in spite of a high level of gender development, women have not gained much public influence or obtained positions of decision-making bodies within the local government or in the highly politicised civil society. Nor have their interests been formulated by the female collective agency in the political field. The thesis has analysed this disparity marked by power and its results challenge the liberal assumption that formal equality produces changes in the power relations between women and men. The thesis further questions the notion that socialist welfare-orientated states automatically fabricate gender equality in terms of female participation, including desicion making, in the political field. The research reveals how feminist politics are shaped by the emerging autonomous political space in contemporary Kerala. The network of autonomous feminist groups, Sthree Vedi, is challenging the hegemonic discourses of women's high status, by focusing on the gender paradox and the increased violence againt women. Sthree Vedi is discovered to be a catalyst of asserting feminist politics in the political field. The feminist network is embedded within other actors in the political field of Kerala, such as the Left women's movement, the Left political parties, and the state-apparatus. The thesis concludes by indicating how 'strategic agency' can create gendered political discourses.

Though it is a matrilineal society, women hold only 15 per cent of the jobs and these are not the decision-making ones, but clerical and secretarial ones. Technical education among women of Kerala is lower than those in neighbouring states. It is a pity that the enrollment of women in courses that are vocational in nature like electronics, computers and engineering is very low, says Seema Bhaskaran, Project Director of the Kerala Mahila Samakya Society, which does grassroot work with women.

The Human Development Report of Kerala, 2005, points out that the state’s record in achieving high human development even at low levels of income is commendable from the point of its gender dimension. In many respects, girls and women perform better than their male counterparts. Women played a stellar role in making the state literate, sending children to school and giving priority to their healthcare requirements. But the high levels of development among women have not translated into comprehensive gender freedom, the report says.

Prepared by Biju P R,Assistant Professor in Poltical Sceince,Govt Brennen College,Thalassery


  1. Although I agree about the contention regarding the under reported income level due to remittance, I have serious disagreements with the data you have raised for the study.

    The kerala model development refers to the dynamic societal feature which was captured by social observers in 1980s. Almost all the arguments you have raised pertains to time period after 1990s. It amounts to missing the context by a decade( a crucial decade when the priority of governance was overturned !).

    For eg when argument of private health care pentration and associated household expenditure is cited, your timeframe defeats the purpose of disproving the Kerala model. Instead, the post 90s overreliance on private health care and govermental negligence towards public health system is often cited for the decline of Kerala model. The inactive state intervention in health sector in 1990s is very often touted by Kerala model exponents as the reason for the qualitative decline in Keralas health sector and increased debt exposure of households.

    If you had captured the data for 1970-1980 your criticism would have stood valid.

  2. In addition to this, Kerala economy had witnessed a sharp spurt in the growth rate from 1985 onwards, which cant be explained by the sole factor of foreign remittance. Kerala economy grew weel above the average INdian growth rate. Foreign remittance didnt show up any sudden increase in the mid of 1980s. So some other factors must be looked for.

    One of my Friend's MPhil thesis had tried to explain this sudden change in the trajectory of economy in 1980s. What he had found was curious enough. The replanted high yield rubber plantations across Kerala started yielding from the mid of 80s onwards. I do not remember the finer details, however his argument was that the growth in Kerala economy in 1980 was agri propelled rather than remittance push.

    My argument is that the scholars critiquing the Kerala model always harpoon on the foriehn remittance factor and tend to miss the comprehensive picture.