Multidimensional Index, a bane for Kerala's steady planning and Development

Kerala has fast changing Economic model, which is burdened with problems, but hopefully, the many successes it has successfully woven, inhibit it from getting benefits from Union Government for bettering its economic lot. It is a bane, rather than being a blessing in disguise. The Dr Raghuram Rajan’s Committee which was asked to evolve a composite Development Index suggesting methods for identifying backwardness of States using a variety of criteria which can be reflected in future planning and which will pave the way for proper devolution of funds from the Central Government to States, has classified Kerala among the ‘Relatively developed’ States’, which would deprive it of developmental support from the Planning Commission, which it badly needs.

Dr Raghuram Rajan, who is currently the  Governor of the Reserve Bank of India and under whose personal leadership the Report bearing his name was prepared when he was the Principal Advisor to the Finance Ministry of the Government of India, has proposed a general method for allocation of planned funding from Centre to States based on State’s development needs as well as its developmental performance. The Committee had recommended that each State may get a fixed allocation of 0.3% of overall funds, to which will be added its share stemming from need and performance to get its overall share.

The Committee has come up with a Multi Dimensional Index of Backwardness based on per capita consumption as measured by NSSO, the poverty ratio, and a number of measures which correspond to the multi dimensional approach as defining ‘poverty’ outlined in the 12^th Plan. The Committee, has recommended that State’s that score 0.6 and above of the Index may be classified as’ Least Developed’, States that score below 0.6 and above 0.4 may be classified as’ Less Developed’ and States that score below 0.4 may be classified as ‘Relatively Developed’.

On the basis of this methodology the Committee has formulated, it has identified the states as Least, Less and relatively developed and went on to classify them in the different groups.

In the Least Developed Group, it has placed, Arunachal Pradesh(0.729),Assam(0.707),Bihar(0.765), Chhattisgarh(0.752),Jharkhand(0.746), Madhya Pradesh (0.759), Meghalaya(0.693), Odisha (0.798),Rajasthan(0.6260), Uttara Pradesh (0.638), while Manipur (0.571),W Bengal(0.551), Nagaland (0.546), Andhra Pradesh (0.521), J&K (0.504), Mizoram (0.495), Gujarat (0.491), Tripura (0.474), Karnataka (0.453), Sikkim(0.430), Himachal Pradesh (0.404) are grouped under ‘Less Developed Group’ while Haryana (0.395), Uttarakhand (0.383), Maharashtra (0.352), Punjab (0.345), Tamilnadu (0.341), Kerala (0.095), and Goa (0.045) have been classified under ‘Relatively Developed’ States.

The Committee, in order to arrive at the categorization has used a) per capita consumption as measured by NSSO; (b) the poverty ratio; (c) poverty criteria table application as spelt out in the 12^th Five Year Plan document.

The methodology adopted by Dr Raghuram Rajan, contrary to Gadgil Mukherjee formula, banks heavily on ranking states on the basis of NSSO monthly per capita consumption expenditure which is not a realistic and accurate picture to determine the state of the economy of a State. The Committee bracketed Bihar and Odisha as part of one slate, as least developed states, while Gujarat was categorized as ‘less developed’ while Kerala came the second best as Relatively Developed state. This alone, shows the political bias of a Report which should be more slanting towards mathematical and economic precision when fixing norms for plan delivery exercises through Plan allocation. Kerala, who has no patrons in the Planning body, feels that the Report is not judicious.

I would like to confine myself to Kerala State, which has been classified as Relatively Developed State, and through arguments would show why the classification is incorrect based on the standard used by the Committee to arrive at the methodology. It astonishes me that the learned Economist who prepared the Report ranked  Kerala, as the Second top state  while Gujarat, Maharashtra, are ranked very much low in the order, while Bihar and Orissa seems to be placed at the bottom of the Table.

Per capita consumption is measured by NSSO making use of the factor cost. It would be appropriate to use the ‘market price methodology’ as well, to arrive at the consumption level. Kerala is facing some economic structural challenges. Kerala’s growth in State domestic product (SDP) and consumer expenditure is due to high growth in service sector which in turn is facilitated by large scale remittance income from abroad. But many of the services are not tradable. NSSO data on consumer expenditure is often quoted to project Kerala topping the list. But a disaggregated analysis of the data will show that it is expenditure on education, health and other services contributing to the human development. It cannot be treated as ‘consumer expenditure’ in the State. These services do not help the state to levy ‘service tax’ as well.

Kindly refer to the definition of wealth, as, “Total of all assets of an economic unit that generate current income or have the potential to generate future income. It includes natural resources and human capital but generally excludes money and securities because they represent only claims to wealth. Two common types of economic wealth are (1) Monetary wealth: anything that can be bought and sold, for which there is market and hence a price. The market price, however, reflects only the commodity price and not necessarily its value. For example, water is essential for human existence but is usually very cheap. (2) Non-monetary wealth: things which depend on scarce resources, and for which there is demand, but are not bought and sold in a market and hence have no price. Examples are education, health, and defense.

Read 

more: http://www.businessdictionary.com/definition/wealth.html#ixzz2hbpodgTP”

Secondly, those who take education and becomes educated cannot get any job in the State because manufacturing activity that recycles the income into different brackets is not possible in Kerala, as it does not have manufacturing activity to produce cyclic economic activity, resulting in wealth changing hands. Neither the organized industry, nor the multinational companies or medium sized production units, either in the public or private sector, want to set up any facility in Kerala, due to many reasons. Kerala is the only state where there is no accretion of capital as investment. Even units in the defence establishment sector or the Railways have set up any unit, even though there is tremendous local talent available through mushrooming higher educational institutions set up in the Private Sector which has deployed Crores of Rupees worth of investment. Consumption expenditure, which forms the bulk work of economic recycling, is not apparent here. The money that comes from abroad, which spills over to individuals,  who hold it as a residuary cannot be termed as their per capita income which according to VKRV Rao method is annual income divided by Population. Income is earned by the Recipient, rather, it is kept with him as a residuary owner hence cannot become Income. This difference has to be borne in mind when the State Domestic Product is arrived at. The foreign money that flows into the Construction sector cannot be deemed to be capital invested and hence cannot come under the ambit of construction activity for which consumption activity tag may otherwise apply. The second mode of investment is in Gold, which is a dead investment. Kerala accounts for more than 25% of the 31,000 tonnes of Gold that is in the hands of private individuals. Its temples also possess gold. If buying and selling, becomes a part of consumption spending, then, the economic activity which is dead investment can be consumption expenditure in theory and not in practice!

Kerala has agro based industry like rubber which has production of 9, 25,000 tonnes equivalent to 93% of India’s total production of natural rubber in the Country. It is sold up-country for making value added products out of rubber. According to Rubber Board statistics, Production of natural rubber was 9, 03,700 MT while consumption of Rubber in the country was around 9, 66,415 MT while the import of Rubber was to the extent of 2, 14,433 MT. Rubber export from Kerala was at 27,145 MT. Instead of realization of around Rs 14,650 Cr as 100 Kg rubber was priced Rs 16,600 INR while it was $ 271.43 in the international market, the value added segment could have raked in 6 times the amount if there was a manufacturing activity here. The producers of Rubber products are all in the up-country. Low value for one of the priceless production of Rubber, which has its lion’s share of production in the state with a few units set up to produce rubber based products cannot be called ‘Relatively developed’ state needing lesser funds compared to the other ‘least developed and less developed funds’ where more funds will be deployed courtesy Planning Commission to upgrade industrialization to produce larger wealth.

Kerala is a literate state, having higher women: men ratio; It has higher infant mortality rate. Every year, it produces more people who have higher education. But its growth of industries compared to all India is so low, that these educated employed turn to other States and even plan to go abroad in search of greener pastures. In spite of the fact that we have 44 rivers, 41 flowing west and 3 in the eastward direction, our per capita consumption is lower than that of Rajasthan and the state is placed in the 19^th position amongst the 28 states. The per capita growth of Roads in the State is pitiably poor though there is connectivity.  Most of 1, 51,652 Km long roads in the State are in despair. Kerala’s waterways which can play a very important role in taking over the goods traffic is still to become a full force due to lack of investment. State’s power woes need desperate solution, as most of the power comes from hydro electric power sources which are dependent on monsoons.  Despite heavy monsoon and dams becoming almost full, power scenario is not so bright.  Kerala perhaps, is the only states which either get scanty monsoon or devastating rains which rather causes more loss than benefit.

Revenue from Tourism has risen to great heights at Rs 21,125 Cr, and every year, this income tends to grow, yet the State is not able to utilize in full strength the benefits nor revenue that flow from this industry. Kerala has the highest per capita consumption of alcohol in the country, but Government gets revenue from it, hence feel reluctant to let go the revenue as sources of revenue has dried up.

Even vegetables come from neighbouring states making Kerala a high consumer state. The robust textile industry has very nil manufacturing presence here. It is for this reason that it is called a Consumer state. Consumption can become a base, if there are manufacturing units which pushes up production, thereby accelerates consumption. Just because there is consumption, without corresponding economy creating wealth through its distribution, consumption expenses cannot rally as a point in creating wealth which is responsible for welfare. Therefore, to say higher consumption expenses has resulted in higher wealth, which is repatriated to the original centres of manufacturing, cannot create economic growth as Dr Raghuram Rajan's report tend us to believe.

Against the income that the Below the Poverty line people get can by no means be explained away as Poverty ratio is coming down in Kerala. Against high costs, the low income group consistently earns but sustains itself by going for multiple jobs to get fair wages to enable him or her to sustain the family. In Kerala, you can see, more than 1 member of the family seeking livelihood options to feed the family. Assuming that the estimate of poverty families by the definition suggested by the Planning Commission show that there is a large number of households who are in the peripheral income group of the definition, yet, have no sufficient ways and means of increasing their wealth so as to enjoy the ‘welfare’ benefits that Plan programme subscribes to.

Comparing the un-employed list of 40 lakhs in the employment exchanges is no guarantee of confirming that the unemployment has come down in Kerala. Since employment opportunities are almost nonexistent, new qualified young men do not register in the employment exchange. They go to other pastures, where job seeking result in getting employment.

The present criteria fixed for extending benefits to develop the state on various criteria drawn up by Dr Raghuram Rajan Committee is flawed. The sources of developing multidimensional Index are not accurate. The conclusion based on artificial reading of the growth parameters against distinct objective conclusions was not followed by the eminent Economist.  For development to have meaning, human development is only an engine that will cause better economic development, but necessary co-relation must be  made to develop the infrastructural and developmental engines which will add wealth and create welfare. Kerala’s micro growth criteria may fulfill text book theories, but the inertia of a large gap in the developmental model, will not help nor assist Kerala to grow to its potential if Plan assistance is not provided using criteria of developed human index with Gross domestic product from economic growth indices.   29^th annual meeting of the World Economic Forum (Indian Chapter) slated for Nov 8-9, 2013 has been called off. Even if held, it is not going to throw open opportunities to bring in huge investments. These meets are imageries which would glow state’s appetite for a pie in the investment module which will never come.

 An eminent Economist of world order like Dr Raghuram Rajan looking at peripherals and forming an opinion, has ranked Kerala as a ‘Relatively Developed’ State. His fundamentals on which he has based the opinion are flawed. This needs to be researched to come to starch reality. Kerala cannot be grouped under ‘Relatively developed’ states. Its eligibility to grow depends upon wider support Planning apparatus in crucial and critical areas offer. Kerala has developed a model called ‘Kerala Model”. This has created excellence in certain human development activities only. It has not looked beyond that. Hence a course correction in the model by bringing in economic development is the need of the hour.

India’s new economic model of “Adam Smith, Keynes and Me” Model

The welfare definition of economics is an attempt by Alfred Marshall, a pioneer neoclassical economist, to redefine his field of study. This definition expands the field of economic science to a larger study of humanity. Specifically, Marshall's view is that economics studies all the actions that people take in order to achieve economic welfare. In the words of Marshall, "man earns money to get material welfare." This is why economists since Marshall have described his definition as the welfare definition of economics. This definition enlarged the scope of economic science by emphasizing the study of wealth and humanity together, rather than wealth alone.

In his widely read textbook, Principles of Economics, published in 1890, Marshall defines economics as follows: "Political Economy or Economics is a study of men as they think and move and life in the ordinary business of life. It examines that part of individual & social action which is most closely connected with the attainment & with the use of material requisites of well-being”

Economics has been called “the science of how people get a living.” We all have to make a living! And our daily lives are beset with economic questions! Why is it so hard to buy a home? Why does the cost of college rise so fast? Why are willing, able workers unable to find jobs? What about us, the voting citizens — is basic economic literacy out of our reach?

Economics is a “given pie”; it is not a pie that every economist can make at will or for which he can prescribe his own recipe. Economic theory has a “nature of its own” that must be respected; certainly it must be recognized if its distinctive contribution is to be made at all. But the pie that is the economic aspect of affairs is bigger than that traditionally treated by economists; it embraces all human action. The slice that makes up economic theory may—so long as it is cut from the correct pie—be cut in any arbitrary way. “It is impossible to draw a clear-cut boundary around the sphere or domain of human action to be included in economic science.” “The scope of praxeology, the general theory of human action, can be precisely defined and circumscribed. The specifically economic problems ... can only by and large be disengaged from the comprehensive body of praxeological theory.”

But if it is urged that economics is primarily concerned with man, and then there is an obvious need to make clear precisely which aspect of the study of man economic theory is concerned with. Different approaches have been made toward the solution of this problem. The conception of economics as a science of wealth, attention must be drawn to one of the most popular of these approaches, viz., and the view that sees economics as dealing with the phenomena connected with economic welfare.

Wealth promotes the economic welfare of man. If exclusive attention to the objects of wealth was to be declared scientifically inexpedient, then the problem could be avoided by shifting attention from the goods themselves to the welfare to which they minister. Instead of studying the effects of various measures on the wealth of a nation, economic analysis may be viewed as going a step further and studying the welfare of the nation as affected by these measures.

Such a conception of economics provided a framework into which the received body of doctrine could be fitted without excessive strain, while at the same time it reflected the new recognition of the subjective basis of market phenomena. The shift to this fresh conception seemed merely a broadening of the scope of the subject from one narrowly concerned with goods to one concerned with happiness. Cannan, writing at the beginning of this century on developments since the appearance of Mill’s Principles, saw this broadening as the work of the theory of marginal utility:

Whatever definition of economics may be adopted, it is clear that the conception of its subject has become wider than it was. The economist of today recognizes that he has to do with man in relation to one particular kind of human welfare...It would be impossible for any economist of the present day to repeat Malthus’ remark that Adam Smith mixes the nature and causes of the wealth of nations with the causes which affect the happiness and comfort of the lower orders of society.

From the point of view of the long–run developments in the definition of economic phenomena, this broadening of the economics of wealth into the economics of welfare does not mark so radical a change as that marked by the appearance of any of a number of later conceptions to be taken up in subsequent chapters. In fact, as against the other definitions of economics, both the wealth and the welfare formulations contain much in common; many of the features found to be objectionable in the wealth criterion appear unchanged in its welfare counterpart. Both formulations are “classificatory” and “departmental” rather than “analytical.” Both see economics as studying something that is produced, whether goods or happiness, rather than a certain type of activity. Especially where economic welfare is understood as meaning material welfare, the concept of welfare evinced a strong bond of continuity with that of material wealth.

Nevertheless, as the neoclassical expression of the classical wealth–oriented definition of economics, the welfare and utility criterion did call for a conscious alteration of focus in the contemplation of economic phenomena. This point of view, while it became popular only after the introduction of marginal utility economics, had its forerunners as far back as the classical economists. One of Adam Smith’s successors, Dugald Stewart, considered political economy as dealing with “the happiness and improvement of political society.” The position of Henri who broadened economics so as to deal, not with the wealth of nations, but with the “prosperity” of nations—a concept that included “civilization” as well as wealth. John Stuart Mill, when he came to consider the question of defining economics, criticized Say for having a similarly wide conception of political economy. Sismondi’s emphasis on happiness and consumption in economics and Lauderdale’s all–embracing definitions of wealth place their conception of economics in the same group.

            The Love of Money, Leslie attacked the notion that the pursuit of wealth represented a self–contained human motive. The love of money means completely different things to different people. Unique category of wealth through reference to the heterogeneity of the demand side of economics undoubtedly contributed toward a better grasp of the nature of economic theory. For example, it was the increased attention to the demand factor that made it possible for Jevons to “take utility...as the subject matter of economics,” or for an American writer to declare that all definitions of economics reduce to “the science of enjoyment or . the science of the means of enjoyment.”

 Welfare, utility, ophelimity—these were the terms around which expositions of economic doctrines revolved. Economics is essentially concerned with welfare, or at least with material well–being, was probably the view most generally accepted among the English economists.. Cannan, however, held the criterion of material welfare to be the real distinguishing feature of economics..

Of course, the identification of economics with the study of economic welfare raised fundamental questions about the justifiability and validity of propositions concerning changes in social welfare. Sir Dennis Robertson cites the contention that the implications of envy make it uncertain that welfare would be increased even if everyone had more of every commodity. Robertson’s characteristic reply to this possibility would certainly have won Cannon’s concurrence:

The maximization of want-satisfaction invites a brief digression on the idea of a specifically economic motive or impulse. It is clear that the meaning, if any, that is to be attached to such an expression depends on the view taken of economic activity generally. Economic activity is concerned with the sustenance of human life, and then the urge for self-preservation may fairly be understood as the economic impulse.

What makes the question of the meaning of the economic motive especially relevant is that the developments that have been discussed in the conception of economic activity point for the first time to the possibility that no such economic drive may in fact exist. So long as an objective entity—viz., wealth or economic welfare—is singled out as the phenomenon of interest to the economist, then, of course, the concept of an economic motive is meaningful in terms of a drive towards this objective entity. And when economics is understood, as it has been in definitions considered in the present chapter, as examining the phenomena that are attendant upon the activities of man in so far as he is in pursuit of a definite end, viz., wealth, then the economic impulse emerges as the very focus of the economists’ interest. But when the pattern of human activity aimed at maximizing want-satisfaction is made central to economics and the idea of wealth is quietly discarded, then the nature of any economic motive becomes highly problematical.

To be sure, the praxeological perspective embraces a range of human action far wider than that usually treated in economic theory. All human actions, motivated though they may be by the entire range of the purposes that have inspired and fired men to act, come within the sway of the ideal praxeological discipline. The constraint that men feel to fulfil their purposes in spite of obstacles pervades all aspects of life. It is the position of praxeology that the common category that embraces the entire range of human efforts is the key to economic science. We have seen at various points in this book that economists have again and again searched for something in economics that should differentiate it from the rest of human action. These thinkers were deterred from expounding the praxeological character of economics for the very reason that this character is common to other aspects of social life. The praxeological view sees economic science as the branch of praxeology that has been most highly developed. Perhaps other branches will one day attain a similar stage of development.

Even Adam Smith conceived economics which according to ‘Wealth of Nations’ written 350 years ago, visualized sharing of wealth, eouspousing the theory of wealth and not greed of the persons amongst whom the wealth was shared. In 1936, Keynes communicated a new idea- duty of the state to intervene to raise the level of activity of the country. He conceived the idea of charity by force. His conclusion was to rob the rich through taxes to bring in inclusive growth among the poor. Government of India, with economist of the ilk like P Chidambaram and  Jairam Ramesh, who have invented the theory of inclusiveness among the have nots, preach one side morality beside Adam Smith and Keynes. They believe, that in an egalitarian society, there is nothing wrong in passing on the pain to the tax payer to conceive populist schemes of inclusiveness that would enable the state to dispose large sums of money to the hopeless and hapless needy. MNREGA is a flag ship scheme of the united progressive Alliance, which is aimed to create financial inclusiveness among the unemployed rural people, or assure a minimum amount during 200 days of the year, by contracting them for work, or assign work. But, the spent money did it create any rural asset, of a fixed nature so that it automatically cycled further economic good to the community? If in an economic activity, money spent should create visible asset, which would in turn create more activity, only if it created a permanent asset which had its own economic ability to create wealth. Here, the funds were deployed to create a dead end. There was no visibility for the return or making of further assets. Is it financial inclusion? Now, the creation of Food Security Bill where crores of crores is sought to be invested. Would, at the end of the tunnel, would it solve the food scarcity, so that the end beneficiaries can depend upon some plank of economic activity that would enable them to earn for their own food. It is a duplicate Keynesian thought that never aims or even pretend to create fixed assets on which economic activity would evolve. Today’s Food Security would become a legal right tomorrow. Have the planners who devised this strange plan aware of its implication. Or is it a gamble to portray their amour to the people on the eve of elections, a sort of politicking to score points over the rivals. In democracy, you have only partners and not rivals. The absurdity of spending precious money for projects which does not realize or create fixed assets which in turn is automatically able to create further wealth is fraught with serious economic consequences. Do we leave it to the people to prepare military strategy? Is it done democratically? Good idea is not compulsorily taken nor is it a legal right that every good idea should be part of democratically tested?

After a lot of dithering or procasting, Central Government has come to veer around the compulsion that Goods and Services Tax have to be rolled out by Feb 28,2014 (the date of the budget)(whether interim or not). Proposed GST will have a dual tax structure, one will be levy of the Central Government (Central GST) and another by State (State GST). The prices will not depict the levy nor will it be disclosed to the consumer. The central government wants to hike the tax levied while it is not bound to revel the break up, for the same reason it does not want to invite wider criticism. State and Central component may add up to 20%. In the matter of taxes, centre and state have concurrent jurisdiction, and each will tax a product 10% each through Goods and Services Tax. While the basic features of GST would be uniform, the dual model would be implemented through multiple statutes. All political parties are board, and this is national consensus. A unique economic model of Indian Polity, of the polity for the suffering public!

National Fibre Policy or Natural Fibre Policy?

National Fibre Policy or Natural fibre Policy?

The Government of India is following a flawed policy as far as natural fibre industries are concerned.  The National Fibre Policy, the draft of which has been already released, is flawed. One of the most important Textiles Ministry is under an additional charge of a Minister who is already holding a heavy weight portfolio of Commerce & Industry. Textiles are one of the most important segments which contribute heavily to GDP and Foreign Exchange earnings. Today, Textiles industries are facing mounting impediments to remain competitive when the market markets are squeezed for want of monetary wealth to keep the economy growing. But, India which is professed in political adventure games is more interested in politics rather than attempting serious governance! Second generation reforms which are long overdue remains on the blaming game and does not progress beyond a few notes and few noises. Nobody cares a dime.

            National Fibre Policy is not natural fibre Policy but anti- thesis of it. Man made fibres are preferred to natural fibres which are languishing due to poor Policy and monetary support for the various segments and sub segments of the natural fibre industry. Natural fibres are produced by Plants and animals. There are leaf fibres such as sisal and hard fibres such as Coconuts etc.  15 major and animal fibres dominate world fibre production- cotton to cashmere, have particular properties that place them in the luxury market.   Abaca, favoured source of rope, cotton (widely used natural fibre), Flax (one of the strongest fibres), Hemp which is a bast fibre, Jute (strong threads made from jute fibre, sack cloth), Ramie (white with a sulky luster, strongest natural fibre), sisal (replacing fibre glass fibres in composite materials used to make furniture), coir (extracted from the outer shell of the Coconuts, coir is found in ropes, mattresses, brushes, geotextiles, etc). Animal fibre include wool (world’s premier textile silk fibre), silk (queen of fibres), Mohair (noted for its softness and receptiveness to rich dyes), cashmere (soft to touch), camel hair (best fibre- Bactrian camels of Mongolia/inner Mongolia, baby camel hair finest, softest), Angora wool (silky white wool of Angora rabbit, quality knitwear), Alpaca wool (high end luxury fibres).

            When the world over, natural fibre is preferred due to their superior environmental friendliness vis-à-vis synthetics, we have authorities in India who would like to push the Man Made Fibres (MMF) through a National Fibre Policy unmindful of the damage to the environment and the associated cost to the Society, from disposing synthetic end products which are considerably greater than those accruing from bio-degradable products such as hard fibres. When traditional products would constitute an integral component of any Research undertaken to improve the characteristics of natural products or of the search for new ones within the overall strategy, we believe in formulating strategies and policies without caring for the generic concerns.   It is a pity, that Coconut fibre or coir fibre is not at all included in the National Fibre Policy, as India, like Srilanka, Philippines, Malaysia, Thailand, have been through policy intervention trying to strengthen coir production and exports through fiscal and policy support.

            Coir fibre constituted 25% of the value of total coir exports and 20% of the volume of the total exports, and the country has been producing 5,00,000 tonnes of coir fibre from Coconut husk, even though this is not even 50% of the available coconut husk supply, due to apathy of attention or intervention in its development. As Coconut is in the concurrent list, the Government of Kerala, is unable to get the centre invest in developing industries in Kerala because of lack of political will or incapacity to be a proactive state like Uttar Pradesh or West Bengal or  Tamilnadu which get a lions share of the Plan outlay.

It may seem odd, that the Coconut nor coir industry does not have adequate statistics to determine how many Coconut husks are available for use by the Coir industry and what is the quantum that is dehusked to make coir fibre and what is the residue  unused nos available for likely utilization . When the basic figures are not available, assumptions and notional statiscs form a part of planning, the results or inherent capacities go wrong, as a result, no proper planning can be envisaged.

Coir industry has a huge women worker population, and their livelihood and sustainability depend upon the fortunes of the Coir industry. If Coir industry comes to a grinding halt, the kitchens in many of the homes of Alapuzzha, Shertalla, Ambalapuzha, Haripad, Vaikom, Ettumannur, Kollam, Cheriyankeezhu, Thiruvanthapuram and wayside villages will remain unused, as the Coconut economy is the driving force. Yet, no structural approach, nor long term vision, finding an inequitable balance between growth and conversion on the user industry has ever been made. Government should have a long term commitment to support the traditional industry’s base. In the Micro, Small and MEDIUM Enterprises, the bulk of growth, and support is directed at micro, and mini industries and not at Medium Scale Industries which have financial as well as physical strength. But seldom are these nodes finding assistance from the MSME Act; government shying away from Policy support, Banks doesn’t want to finance the sector.

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