Kerala 2005 - of Planning Commission

CHAPTER 8
LOOKING AHEAD: POSSIBILITIES AND STRATEGIES
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terms, should be reckoned as the ‘new initial conditions’
for further development. Apart from the two important
distinctions made earlier, viz., traded and non-traded
and high road vs low road to development, this Report
underlines the need for another distinction in chalking out
a strategy for development, i.e. short-run vs. long-run.
The concept of short-run in economics in general, and
development economics in particular, need not necessarily
follow a fixed time-horizon although it has a time
dimension. Usually, it is referred to a time-horizon during
which no significant additions to productive capacity is
created. The idea is to initiate changes that will yield the
Box. 8.2: Ayurvedic Manufacturing Industry in Kerala
Ayurveda, the Indian system of health care has a fairly long history. Based on herbal medicine, this system has
been gaining in popularity both within India and abroad. The increasing preference for health care based on natural
products, the demand for rejuvenation therapy and Kerala’s locational advantage in one of the mega bio diversity
hotspots in the world are the major factors, which put Kerala-Ayurveda in the forefront. Since Kerala has preserved this
system of healthcare over the ages and in the modern times with an institutional back up provided by the Government,
Kerala Ayurvedic treatment is now poised for growth and development. This has provided a basis for the growth of the
Ayurvedic Manufacturing Industry (AMI) in the State.
A recent study of the AMI in Kerala has brought to light a number of important features. 9 Its output now accounts
for more than 10 per cent of the all India Ayurvedic manufacturing output. In terms of the number of Ayurvedic
manufacturing units, Kerala stands next to Uttar Pradesh. In Kerala, a large chunk of income is basically from Ayurvedic
medicines, while in India, it is from the food supplements and the cosmeceuticals. As a percentage of the overall
manufacturing output in Kerala, AMI contributes more than 2.5 per cent in terms of value addition, and its growth rate
during the study period is quite promising as compared to overall manufacturing. Thus, the contribution of AMI in the
overall industry is increasing and can grow if it is nurtured properly. Manufacturing units are mostly concentrated in
the districts of Thrissur, Ernakulam and Kollam.
Major export destinations of Ayurvedic products from Kerala are UAE, UK, Malaysia, Russia, etc. The total export of
Ayurvedic products stood at around Rs 15 crore, with major exporters being Kerala Ayurvedic Pharmaceutical Limited
(KAPL) and Pankaja Kasthuri Herbals Limited (PKHL). Kerala also exported medicinal plants worth about Rs.5 crore.
Most of the herbal exports from Kerala are now in the category of food supplements due to restrictions they face on the
medicine export front. In fact, firms like Kottakkal Arya Vaidyasala (AVS) have not entered the product export market
because of their policy decision to remain only in medicine. But, Pankaja Kasthuri has started exploring the product
market with innovations and advertisement promotion in Ayurvedic combinations and cosmeceuticals. In Kerala,
65 firms have Good Manufacturing Practice certificate (GMP), which is a WHO advocated standardisation certificate.
It is obvious that the product pattern is shifting in Kerala AMI too in favour of food supplements and cosmeceuticals.
This reiterates the fact that necessary attention should be given to the curative side of Ayurveda. Many firms like AVS,
Nagarjuna, PKHL and KAPL have research collaborations with many national institutes at different levels in areas like
medicinal plant research, drug standardisation, product innovation, etc. But still expenditure on R&D is just around
2 per cent.
AMI has extensive linkages with medicinal plant industry (backward linkage) and tourism industry (forward linkage) in
Kerala. Analysis shows that around 37 per cent of the income generated in AMI is going to the medicinal plant sector.
As a matter of forward linkage, in Kerala, around 6 per cent of the tourists’ visits are solely for Ayurvedic treatment.
Ayurvedic tourism has emerged as a Unique Selling Proposition (USP) of Kerala. There are 34 Ayurvedic beach
resorts, which have obtained either green leaf or olive leaf certificate, a mark of quality assessment by the Government
of Kerala. In short, these three sectors, medicinal plant industry, AMI and the herbal tourism industry can work as
propulsive sectors for the State economy through the multiplier effect and hence extended linkages.
Source: Harilal, M S (2004).
9 For details, see Harilal (2004).