Kerala 2005 - of Planning Commission

CHAPTER 3
ASSESSING DEVELOPMENT: THE INCOME DIMENSION
45
It can be seen from Figure 3.2 that the per capita NSDP
of Kerala, which had been consistently below that of
all-India, increased at a much faster rate in the 1990s.
Since 1993-94 onwards, the Kerala economy has been
performing much better than all-India in terms of
per capita NSDP. It should be noted that these
estimates of NSDP and per capita NSDP are devoid of
the remittance income of non-resident Keralites and if
we consider the remittances, Kerala's 'modified' NSDP
and 'modified' per capita NSDP 1 would come out much
higher than the official estimates.
2.4 Remittance Incomes
It should be noted that the official estimates of NSDP
and per capita NSDP are devoid of the remittance
income of non-resident Keralites. It is reported that in
1998, there were 13.62 lakh Kerala emigrants living
abroad. Emigration from Kerala accelerated in recent
years; between 1988-1992 and 1993-1997, the number
of emigrants increased by 120 per cent. 2 Remittance
income data are available only for the country as a
whole and not for the constituent States; hence, the
remittances are not counted in the calculation of
NSDP, which in effect does not reflect the actual level
of income the State receives. A number of attempts
have been made to estimate remittances for Kerala, for
example, by attributing a certain share according to
Kerala’s share of Indian workers abroad, 3 or indirectly
estimating it by means of a proxy variable like per
capita bank deposits. 4 An estimate of the total cash
remittances received by Kerala households (as during
a 12-month period) in 1998 comes to the tune of
Rs. 35,304 million. The average remittance was about
Rs. 25,000 per emigrant, (Rs.5,500 per household
and Rs. 1,105 per capita). The annual remittances
received by Kerala households were 2.55 times higher
than what the Kerala Government received from
the Central Government by way of budget support.
It was more than the export earnings from the
State’s seafood industries (about Rs.10,000 million)
or export earnings from the State’s spices industry
(Rs.5,700 million). Besides cash, households received
several items in kind – clothing, ornaments and jewellery,
and electric and electronic gadgets; the estimated total
value of goods received in that year comes to about
Rs.5,413 million. Total remittances thus estimated
(cash plus goods) amounts to Rs.40,717 million or
10.7 per cent of SDP in 1998.
However, reliable estimates of the quantum of remittances
over time are difficult to obtain. A recent study at CDS 5
has estimated, with somewhat better informational
base, a time series of remittances to Kerala (using
the first method) for a period of about three decades
beginning from the early 1970s. These estimates show
1 To be explained in the next Section.
2 Zachariah et al (2002).
3 See Gulati and Modi (1983).
4 See Krishnan (1994).
5 Kannan and Hari (2002).