The three top Indian economists-Amartya Sen, Jagdish Bhagwati and Arvind Panagariya-hotly debated development models of Gujarat and Kerala. Sen was challenged by Bhagwati and Panagariya. While Sen debunked the Gujarat model for not being inclusive, the other two lauded it for achieving huge economic growth. Despite their sharp differences, the three agreed on one point: Kerala has succeeded on both counts, growth and equity. They, however, differed over how Kerala has progressed. While Sen gave credit to the numerous state-initiated welfare programmes, Bhagwati and Panagariya said that the state's achievement on both the counts was mostly due to the globalisation of the state's economy in the 1990s and the huge inflow of remittance from its large non-resident community.

 

The State of the States report this year has underscored Kerala's achievement in both economic growth and human development. The state has emerged number one, surpassing national average substantially in three key growth indicators: GDP, capital expenditure and consumer market. It has also retained its traditional strength in the education sector.

 

While Kerala achieved 10 per cent growth in GDP which is three percentage points higher than the national average, it had a 30 per cent rise in capital expenditure as against the all-India average of just 5 per cent. The state, which has been topping the country in per capita consumption expenditure for the past few years, saw a 35 per cent increase in people owning two-wheelers as against the national figure of 15 per cent.

 

The slump in the Indian economy had barely any impact on Kerala. During 2011-12, Kerala's GDP grew by 9.5 per cent while India's total GDP grew 6.5 per cent. Certainly, the jump in foreign remittance from Rs.50,000 crore in 2011 to Rs.65,000 crore in 2012 on account of a steadily growing dollar has driven key sectors of the state economy.

 

The education sector too saw significant growth. The teacher-pupil ratio doubled from two teachers every 100 pupils to four, when most other states showed negligible improvement. Educational growth in Kerala had started in the 19th century when the Travancore state started providing free education to all of its people. No wonder, Kerala has been able to build on such an old foundation.