Since independence, Kerala was managed as a democratic socialist welfare economy. Since the 1990s, liberalisation of the mixed economy allowed onerous Licence Raj restrictions against the free market and foreign direct investment to be lightened, leading to economic expansion and job creation. Kerala leads many other Indian states and territories in terms of per capita GDP and economic productivity and Kerala’s Human Development Index is the best in India.Kerala’s Human development index comparable to first world nations which is close to europe.
Around 30 lakh Keralites are working abroad mainly in Persian Gulf; migration to where started with the Kerala Gulf boom. So the Kerala Economy is largely dependent on remittances.Unemployment recently dropped from a large 19.1% in 2003 to 9.4% in 2007 & only 4.2% in 2011 . Underemployment, low employability of youths, and a 13.5% female participation rate are chronic issues.The service sector (including tourism, public administration, banking and finance, transportation, and communications—63.8% of statewide GDP in 2002–2003) along with the agricultural and fishing industries (together 17.2% of GDP) dominate Kerala’s economy.
Kerala produces 97% of national output of pepper and accounts for 85% out of the area under natural rubber in the country. Coconut, tea, coffee, cashew, and spices — including cardamom, vanilla, cinnamon, and nutmeg — comprise a critical agricultural sector. A key agricultural staple is rice, with some six hundred varieties grown in Kerala’s extensive paddy fields.
One of Kerala’s major social problems is also a huge revenue earner for the state. Kerala consumes more alcohol than any other state in India.Every year, liquor and beer sales have been rising and the total sales of liquor and beer during 2010-11 fiscal year is expected to be about Rs. 6,700 crore.Kerala is an established tourist destination for both Indians and non-Indians alike. Tourists mostly visit such attractions as the beaches at Kovalam, Cherai and Varkala, the hill stations of Munnar, Nelliampathi, and Ponmudi, and national parks and wildlife sanctuaries such as Periyar and Eravikulam National Park. The “backwaters” region — an extensive network of interlocking rivers, lakes, and canals that center on Alleppey, Kumarakom, and Punnamada.
Kerala’s economy recorded a growth of 9.89 per cent during 2009-10 and state’s public debt stood at Rs.70969 crores at the end of last fiscal, according the Economic Review.The total debt of the state increased from Rs.20176.10 crores in 1999-2000 to Rs.70969 crores in 2009-10,