Economic Review - 1987. Kerala

Abstract

From General Review: The year that has gone by witnessed one of the severest droughts ever experienced in recent years with as many as 21 out of a total of 35 rainfall sub divisions in the country receiving deficient or scanty rainfall. This has caused a sett-back to the momentum of economic development thereby placing the targets of the Seventh Five Year Plan in jeopardy. As against an actual growth rate of 4.9 per cent in 1985-80, and an estimated rate of growth of 4.1 per cent during 1986-87, the growth rate for 1987-88 is placed at 1 to 2 per cent. This would imply that the growth rate in percapita income would be negative in 1987-88. It is, however, arguable whether the growth rate of even 1 to 2 per cent would have materialised during the year when one takes into account the shortfall of about ten per cent in agricultural production. The basis on which a positive growth rate has been arrived at is that the industrial sector is estimated to have registered an overall growth rate of 10.2 per cent during April—November 1987, with the manufacturing sector showing a higher growth rate of 11 per cent. However, it is possible that the contractionary effects of the drought on industrial production may make themselves felt more fully in the final months of the current financial year and the first few months of the next financial year. This could imply that the actual growth rate in the industrial sector may actually turn out to be lower.