Houseboats on the backwaters of Kerala. The rankings have once again raised the question: Is Kerala like some class toppers who do not go on to do very well in life despite academic brilliance? Image Credit: Pixabay

Thiruvananthapuram: Last week when India announced its rankings in literacy and ease of doing business, Kerala retained its top position in literacy with a solid 96.2 per cent literacy rate while Andhra Pradesh was last with 66.4 per cent literacy. But in ease of doing business, Kerala was 28th in a list of 29 positions, while Andhra Pradesh was the topper.

The rankings have once again raised the question: Is Kerala like some class toppers who do not go on to do very well in life despite academic brilliance?

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Multiple reasons

Leaders from different business domains give varied reasons for the literacy leader being a business backbencher, from its socialist mind-set to policies that remain on paper, and from unhelpful trade unionism to failure in keeping promises to investors.

The first CEO of Kerala’a Technopark, which was India’s first IT park, G. Vijayaraghavan, told Gulf News that unlike the literacy movement that had the backing of the general public, there is no groundswell of support for private investment in Kerala.

“Post Independence, there has been an extreme socialistic mind-set among Keralites, and profit is a bad word in the state. Irrespective of whether the Left or Congress was in power, the mind-set was one of socialism. Capitalism is considered bad, therefore business is bad, and so the system makes everything difficult for businesses to come up”, says Vijayaraghavan.

Policies good on paper

Navas Meeran, chairman of Eastern Condiments, in which Norway’s Orkla announced last week it was picking up 67.8 per cent equity, feels Kerala’s industrial policy is as good as that of any other state, but the problem is in its implementation.

“If at all there is a negative sentiment, it is not about the policies per se, but about their implementation”, said Meeran.

Kerala claims it was the first Indian state to introduce a single-window clearance system for investments, but investors have found the ground reality to be quite different.

“The single window clearance system does not work the way it was meant to. Open one window and you find many more windows and doors, and when you deal with them another set of windows and doors open,” says Vijayaraghavan about the maze of clearances that investors have to get.

Literate, not educated

A past president of the Kerala State Council of the Confederation of Indian Industry (CII), P. Ganesh said Kerala is only literate but not educated. “Kerala is the first state to be fully literate, but it is not educated. Keralites can read and write but that does not mean they are educated. And because of that, right decisions are not taken at the right time”, he says.

Businessman and chairman of CII Kerala State Council, Thomas John Muthoot said there was a disconnect between those who make promises to investors and those who are in charge of giving approvals to projects.

“The chief minister or the chief secretary of the state may make promises to investors, but the investor need not get the same welcoming attitude when he approaches local bodies for approvals”, says Muthoot.

Red carpet, red flags and red tape

Kerala has been rolling out the red carpet to investors, the latest of which was the Ascend Kerala 2020 business meet in Kochi in January. However, the meeting was spoiled when a hartal (total work stoppage) happened a few days ahead of it, and the managing director of Muthoot Finance, George Alexander Muthoot, was attacked in broad daylight around the same time.

Investors have also been wary of the trade unions, as well as the bureaucracy in which many officials view investors with suspicion.

However, Kerala is hoping that its high ranking in the quality of life index and a comparatively safe security environment will ensure that investors will look at the state in favourable manner.