Kerala is Enabling Both [Public and Private] Sectors to Flourish, Says Pinarayi Vijayan

As far as the LDF [Left Democratic Front] government is concerned, we do not see investments and entrepreneurship as belonging solely to the public or private sector alone. Both are essential to the development of the state. We are not promoting one at the cost of the other.

We have been able to make our PSUs [public sector units] profitable. One of our PSUs, Keltron [Kerala State Electronics Development Corporation]—which is the first electronics-manufacturing company in the country—along with some of the MSMEs registered here has collaborated in the Chandrayan project, a pride of our nation.

Kerala is a global spice-processing hub. We account for around 40–50% of global oleoresin production. We have a strong food-processing sector with global brands based out of the state. We have globally leading manufacturers of dentures—DentCare Dental Lab—and blood bags—Terumo Penpol, based in Kerala.

As far as big names go, IBM, Infosys and IBS [Software] have expanded their presence in Kerala. To name a few newcomers into Kerala, Airbus, Nissan, Taurus [BPO], Tech Mahindra, Tata Elxsi, NOV [an oilfield equipment provider] and others have established themselves here since 2016. If we really weren't industry and investment friendly, or to put it in your words, if wages and unions were an issue, would they have stayed on here?

Institutions like ASAP, K-DISC, KOSE, and centres of excellence are strengthening the talent pipeline.

We are setting up science parks which will provide space and laboratory facilities for universities, academic institutions and the industry, to come together and engage in R&D.

We are in the process of launching a revamped start-up and innovation policy, which will focus on regulatory simplification through auto-approvals and single-window systems, fiscal incentives for early-stage and scaling up of start-ups, global integration via facilitation of foreign investments and venture-capital access.

As far as MSMEs go, one of our flagship efforts is the Year of Enterprises campaign, launched in 2023–24. It has had transformative results. In its first year, it led to the creation of 1.39 lakh MSMEs, generating over 3 lakh jobs. An additional 1.94 lakh MSMEs have since been established, adding 4 lakh more jobs.

Complementary schemes include Mission 1000 which aims to scale up select MSMEs so that they can achieve Rs 1,000 crore turnover. MSME Insurance Scheme offers risk coverage to entrepreneurs. The 4% Interest Subvention Scheme eases credit access. Kerala Brand Initiative is promoting visibility and marketability of Kerala-based MSME products.

Kerala’s fiscal deficit is not abnormally high as it is made out by some. It has been within the limits prescribed in the Fiscal Responsibility and Budget Management Act. It is true that during Covid debt-income ratio rose in all countries across the world. In Kerala, too, because of the abnormal situation, our debt GSDP ratio went up to 38%.

Since then, it has been consistently coming down and now it is at 34%. We’re rationalising revenue expenditure through targeted subsidies, digital governance and outcome-based budgeting. We’ve established a Public Investment Board to assess and prioritise high-impact projects. Alternative financing models like PPP and hybrid annuity models are also being expanded to attract private investment and reduce the fiscal burden.

Simultaneously, we’re enhancing our own revenue streams through stronger tax administration and digital enforcement—reflected in the consistent improvement in GST collections.

Yes. A common theme was the need for faster land allocation, streamlined project approvals and improved infrastructure linkages. In response, we have strengthened the Kerala Single Window Clearance System, which now covers over 100 services across 17 departments. It ensures approvals within 30 days for MSMEs and 45 days for larger investments.

Indeed, the services sector accounts for over 63% of Kerala’s GSDP, with strong contributions from tourism, IT, education and health care. The Digital University Kerala and the Technocity initiatives are geared towards creating a global hub for digital services and R&D.

We are rolling out simplified licensing frameworks for IT and creative industries, along with incentives for export-oriented service businesses.

The tourism sector, which saw a record 1.88 crore domestic and 3.1 lakh foreign tourists in 2023, is being supported through the Green Tourism Mission, and new classification guidelines to promote wellness, ayurveda and sustainable tourism.

In health-care services, we are expanding into medical tourism as well.