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The prosperity of Kerala State is mainly due to a large population of the state working in middle-east countries and sending large amounts of money back home. The economy of this democratic, socialist, welfare state depends much on remittance from around 30 lakh Keralites working in Persian Gulf countries, a trend started in the last decade. No wonder the per capita GDP of Kerala, Rs, 11,819 is very much greater than any other state of the country.  There are many factors that affect any economy such as industrial growth, improvement in literacy and education, improvement in agricultural produce, exports, increase in tourism etc. Some of these parameters which determine economic growth are discussed herein below.


Just like the rest of India, Kerala is primarily agricultural and has been so historically. More than fifty percent of the populace lives on agriculture. Almost all (96%) black pepper in India is cultivated in Kerala, similarly around 91% of rubber is also grown here. Other cash crops are coffee, tea, coconut, cashew and other spices. The climate and the soil are suitable for cultivation of rice and paddy is extensively grown as it is also the staple food of the population. Vegetables and tropical fruits are also grown here.


Livestock is the mainstay of rural India and Kerala is no exception; animal husbandry and management of livestock provide means of livelihood and employment to a large percentage of population and many landless people are employed in jobs related to livestock management such as milking, feeding, cattle breeding and animal healthcare. Kerala State Government provides incentives and technical help to promote and support development of livestock and animal husbandry. New methods and scientific advances in these fields are spread through educational programs and new breeds of cattle that give better output of milk are introduced thereby improving parameters by which animal husbandry and livestock management are judged.


Kerala is a coastal state with many perennial rivers flowing through it. Fishing is a traditional occupation and large quantities of freshwater and marine fish are harvested from the Arabian Sea and rivers of Kerala. More than 11 lakh people are engaged in various activities related to fishing such as deep sea fishing and river fishing, processing, packaging, transporting to various markets inland and also exporting fish. The Department of Fisheries of the Government of Kerala looks after the welfare of fishermen and other people engaged in related activities. Development of fisheries has a significant impact on the economy of the State as an estimated 7 lakh metric tonnes of fish are commercially harvested every year.

Forestry and Wild Life

Forestry and small and medium Industries depending on forests have a significant impact on the impact on the economy. Rich and diverse flora and fauna, dense sub tropical, deciduous and rainforests cover over 10 thousand square kms. of land and support several small and medium industries that depend on the forests such as collecting different kinds of herbs for medicinal and other use. Rare and good quality woods such as rosewood, teakwood, sandalwood etc. grow in the forests. Ivory and animal hides from elephants and other wild animals from the deep jungles of Kerala are a good source of income. Export of herbs and herbal products, incense and essential oils bring in large amounts of foreign exchange, thus contributing positively to the economy of the State.

Industry and Infrastructure

Kerala is not an industrial state but growth of Industry and development of infrastructure is being witnessed. Apart from traditional industries depending on agriculture and fisheries, there is growth in the manufacture of electronic goods and textiles. Exports of tea, coffee, pepper, ginger, coconut, cardamom, forest produce and fish products bring in large revenue. Tourism is on the rise and infrastructure and other facilities to promote tourism are being developed. Since the state ranks first in literacy and education, Business Process Outsourcing is big business that brings in large amounts of foreign revenue and contributes to the economy of the state.

Minerals and Energy

Kerala has a small variety of mineral wealth that is mined and includes silica, quartz, bauxite and sillimanite. The finest China Clay used in Pottery and other industries is found here. Kerala produces large quantities of Hydel and Thermal power

IT Sector

High level of education in the state has produced a booming IT industry which is still growing. A lot of investment is being brought in by big multi nationals and the Government is also chipping in with IT parks, Technoparks, Infoparks etc. to provide right environment for the growth of the IT sector.

Other industries that play a major role in the economy of Kerala are the Alcohol Industry which brings in substantial revenue and the Tourism Industry which is developing since the 1980s into a top revenue getter for the state. Kerala is now one of the most popular tourist destinations for foreigners as well as domestic tourists and is growing at a rate of more than 13%, and soon the tourism industry will be a major contributor to the economy of the state.

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