The period of the first half of the 1990s (roughly 1991-92 to 1996-97) marked a significant turning point in Kerala's economic trajectory.
During this phase, Kerala's economy experienced a substantial acceleration, achieving an annual average growth rate of approximately 6.76 percent.
This growth rate was indeed the highest recorded in Kerala's economic history up to that point, breaking away from the previous trend of relatively slow growth often termed the 'Kerala Paradox' (high social development indicators coexisting with low economic growth).
The primary driver of this economic buoyancy was the tertiary sector (services), which witnessed robust growth fueled significantly by remittances from Gulf emigrants.
Contrary to the statement, the primary sector (agriculture and allied activities) did not record the highest growth during this period. In fact, agriculture generally faced challenges and its growth was often sluggish, while the service sector led the economic expansion.
The increased remittances from non-resident Keralites (NRKs) boosted consumption and investment, primarily in the service sector (e.g., trade, hotels, transport, communication, finance, and real estate).
The economic reforms initiated at the national level in 1991 also contributed to a more liberalized economic environment, which, combined with the inflow of remittances, provided an impetus to Kerala's economy.
Understanding the sectoral contributions to growth is crucial for competitive exams: services consistently dominate Kerala's economy, followed by industry, and then agriculture.
