The ruling Left Democratic Front (LDF) in Kerala should step back and see how political violence is hurting its ability to attract investments and create badly needed jobs.
“The violence has scared away investors. This is damaging any effort to transform the economy,” says Rajeev Chandrasekhar, Member, Rajya Sabha, and Vice-Chairman of the state unit of the National Democratic Alliance (NDA).
DEPLORABLE TREND
A rational look at the state of affairs reveals the deplorable trend in growing unemployment and entrenched decline of the farm sector.
Suffice to say that the state is becoming a high-risk economy, Chandrasekhar he told BusinessLine here.
IT, services, and tourism have been its three main job creators and the main ‘non-remittance’ levers of the state's economic engine.
But tourism has already been weakened thanks to avoidable controversies. The manufacturing and IT sectors have been hit by political violence in the last one year.
Remittance prospects are getting increasingly clouded by geopolitical tensions in West Asia and elsewhere.
The 'drift' must not be allowed to continue. Civil society, opinion leaders and the media must start talking about this and seek to find acceptable remedies. The earlier, the better.
RISK AVERSION
Inbound investment is no longer about having a one-off event for inviting it. “We’re still caught in the 90s when people thought one such event is enough to bring funds.”
There’s a global trend that the state does not seem to understand, said Chandrasekhar, a successful entrepreneur himself. It’s called risk aversion. Investors don’t want to jump into cross-border deals any more.
So there’s intense competition between states to attract investments. We need a much more investor-friendly environment here, if not government per se .
So it is not enough for a Chief Minister to occasionally wake up and say we welcome investors.
"I’m not saying we must have hundreds of acres of land, which the state doesn’t have in any case, to put up manufacturing facilities."
PRECISION MANUFACTURING
It can leverage the Make In India programme and set up small units to deliver aerospace, military, defence solutions. “You don’t need huge tracts of land to set them up.”
There’s an emerging whole new world of precision manufacturing or high-value manufacturing that suits Kerala best. Neighbouring Karnataka has come up with a model along these lines.
Chandrasekhar agreed that there is some convergence in the policies being followed by the Centre and Kerala with regard to the need for focused care of the underprivileged.
But the way to generate more revenue for the economy is by inviting private investments. Sadly, the Marxist ideology does not allow this.
“Either you’re like China where you are Marxists but you’re also 100 per cent capitalist; or you’ve to be capitalist and pro-free market.
“You can’t hope to be in this twilight zone where you’re very dogmatic about your ideology. You can’t hope to transform a badly damaged economy with it.”