Kerala has been a model to other states for her achievements in
social development. But in terms of economic growth her performance
has for long been very poor and a matter of deep concern. In this context
the turnaround in growth that has occurred in Kerala in the nineties , in
contrast to the earlier decades needs to be looked at in detail. This study
is an attempt in that direction. It is an analysis of the long terms trends
in the State Domestic Product of Kerala for the period 1970-2000. It is
concerned with the growth of the different sectors of the economy, the
changes in the sectoral composition of output and other related issues
such as the sources of growth. What is observed is that in the eighties
and more so in the nineties both in terms of rates of growth and share in
net state domestic product the tertiary sector has dominated and this has
been due to the growth of the producer’s services. Income responsiveness
of producer services is also found to be the highest. However, it is
observed that this has not resulted in any linkages with the production
sector within the economy suggesting that the linkages may be with
productive sectors of other states. Nevertheless there are some
intersectoral linkages with the consumer services and intra sectorallinkages
between banking and insurance and transport by other means.
In conclusion the leading and lagging sectors of the economy and in the
nineties the sectors propelling growth are identified. The sectors which
have lost their position when compared to the previous decades are
Registered Manufacturing, Construction and Public Administration. The
emerging sectors in the economy are transport by other means, and
trade , hotels and restaurants while banking and insurance is the leading
sector. Analysis of structural transformation in the economy suggests
that although structural change has been there, it was found to be very
moderate and has not been strong enough to bring about a major change
either in terms of the growth centres of the economy or the main
contributors to the growth of the economy. In conclusion one feels that
we continue to remain a consumer /trading state and not a producer
state. Is this socially desirable and sustainable is a question that needs to
be addressed.
Key words: SDP growth rates, sectoral shares, service sector, producer
services, consumer services, income and price elasticity,
structural transformation
JEL Classification: O11, O1
