Interview with K.M. Chandrasekhar, Vice-Chairman, Kerala Planning Board
Kerala Perspective Plan 2030, drafted by the State’s Planning Board, is aimed at attaining development parameters of high-income counties over a two-decade period. The board claims KPP 2030 represents a “move away from traditional planning processes to outcome-based strategic planning.”
The draft plan has been formulated in consultation with policy-makers, administrators, academicians, NGOs, civil society members, and public and private enterprises. Creation of a knowledge-based economy is claimed to be central to the plan. And, productively using the huge remittances sent in by Keralites overseas (over Rs 60,000 crores last year alone) is a huge challenge.
In an interview to Business Line, State Planning Board Vice-Chairman K.M. Chandrasekhar discusses the vision behind the plan. Excerpts:
What is the rationale behind the Kerala Perspective Plan?
Kerala’s achievements in terms of Human Development indicators such as education, health, and demographic features have been globally acknowledged. Kerala has undergone the first stage of economic transition from primary to non-primary sector. The second stage of structural transformation is characterised by intra-sectoral restructuring from low to high value added activities.
In 2010, Kerala’s per capita GSDP (gross State domestic product), in 2005 PPP dollars, was about $4763, which is equivalent to the lower middle-income category as per the World Bank classification. However, growth has not been accompanied by the structural transformations in terms of GSDP. The Kerala economy seems to be trapped in low value adding activities.
If Kerala continues on the business-as-usual path, the scenario for 2030 looks grim. A major growth challenge is to pull the economy out of the vicious cycle of low productivity, poor quality, high unemployment and social and environmental degradation to a virtuous circle of high-quality growth.
The challenge is to increase competitiveness and productivity by reforming the investment climate through infrastructure reforms. Kerala needs to reconsider its development strategy in order to gain considerable autonomy in growth and become a major player in the national and global economy.
The Kerala development model has already lost its sheen. How will the perspective plan bring back its glory?
The core idea is to carry forward the Kerala development model to position Kerala in the international market in the case of health and education (human capital). Necessarily, this will upgrade human capital to grow at that level, accelerating Kerala growth and benefiting its people.
Kerala’s healthcare system had until recently been known for its public-funded, low-cost hospitals and primary health centres. This has now largely been replaced by a high-cost private healthcare system. What is the plan going to do to strengthen the public system?
KPP 2030 specifically emphasises the role of public investment in the health sector. According to the Plan, public investment in health sector is the basic requirement for sustainable development. It is proposed in this document that public sector investment in the health sector must increase up to 5 per cent as a proportion of GSDP by 2030.
This target can be reached in a phased manner. In the current Five-Year Plan of 2012-17, the government can target to spend around 1-2 per cent of its GDP on healthcare. This can be increased to 2-3 per cent in 2017-21, to 3-4 per cent in 2022-26 and finally 4-5per cent in 2027-31.
‘Emigrants as development partners’ is a lofty ideal, but how can this be put into practice?
The Perspective Plan suggests special funds such as Infrastructure Development Fund, Kerala Fund etc to be formed by mobilising resources from Non-Resident Keralites. These funds will exclusively focus on developing infrastructure and institutions which will enable implementation of the KPP 2030. The strategies suggested in KPP 2030 will be converted into suitable projects at the stage of implementation in due course.
In a State where the LDF and UDF administrations alternate every five years, wouldn’t the continuity be lost as each has its own approach to development?
This is a Perspective Plan for the State. It will be linked with Five Year Plans and will be implemented for the progress of the State. The fact that it is being put up for public comment is in itself indicative of the government’s desire to build a consensus on the board future development strategy.
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