Question

What major factor initiated rapid changes in Kerala's economic state during the second phase of development (1976-1991)?

1. Large-scale industrialization policies implemented by the state government.
2. The migration of Keralites to Gulf countries for employment.
3. Significant increase in domestic public expenditure and investment of small savings.

• A. 1, 2
• B. 3
• C. 2 മാത്രം
• D. 2, 3

Answer 1

Answer:

C. 2 മാത്രം

Understanding Kerala's Economic Transformation (1976-1991): The Gulf Boom Era

• The period from 1976 to 1991 is often referred to as the 'Second Phase of Development' or, more specifically, the 'Gulf Boom' era for Kerala's economy.

• During this time, the single most significant factor that initiated rapid changes in Kerala's economic state was the mass migration of Keralites to Gulf countries for employment.

Impact of Gulf Migration: Remittances as a Game Changer

• Following the oil price hikes of the 1970s, Gulf Cooperation Council (GCC) countries experienced unprecedented economic growth, leading to a massive demand for expatriate labor.

• Kerala, with its high literacy rates and entrepreneurial spirit, saw a significant number of its population migrating to these countries, primarily for blue-collar and semi-skilled jobs.

• The most profound impact of this migration was the massive inflow of remittances (money sent back by non-resident Keralites to their families).

• These remittances became the primary source of income for a large number of households, leading to:

• Increased consumption and purchasing power: This stimulated local markets for consumer goods and services.

• Boost in savings and investment: A significant portion of remittances was invested in real estate (housing boom), education, health, and small businesses, though large-scale industrial investment remained low.

• Poverty reduction: Remittances played a crucial role in reducing poverty and improving the living standards of many families.

• Improved social indicators: The financial stability provided by remittances contributed indirectly to Kerala's already strong social indicators (health, education) by enabling families to access better facilities.