Labour Market in Kerala: Examining the Role of Industrial and Employment Policies

This chapter aims to understand and document the challenges facing Kerala’s labour market and argues for specific industrial and employment policies to meet these challenges. Kerala’s remarkable achievements in the social spheres, including health, education and land reforms, have helped the state’s population achieve a considerable degree of upward social and economic mobility. Kerala’s economy has been growing at fast rates from the late 1980s onwards, aided to a great extent by the remittances sent to the state by Malayalee workers in foreign countries. However, Kerala’s population has now started ageing, and the state’s economy is dependent on migrant workers from other Indian states, especially for manual jobs. At the same time, the creation of high value-adding jobs in Kerala in the services and manufacturing sectors has not been adequate, particularly in comparison with the rate of supply of educated workers in the state. Given such a context, Kerala now aims to set up a modern industrial sector that builds on the specific advantages enjoyed by the state with respect to natural resources and people. There is great potential in Kerala for the promotion of food- and agro-based industries; specific segments of chemical, electronic and engineering industries; and also industries based on advanced technologies such as biotechnology, nanotechnology and life sciences. There is also great scope for a revival of entrepreneurship in the state, harnessing, in particular, the energies of the large body of Malayalee engineers and professionals worldwide.