Thiruvananthapuram: From holding three industrial conclaves in a week and jumping from 28th to 1st position in the country’s ease of doing business ranking in just two years, the Leftist government of Kerala is on a mission to attract high-end industries to the state through strategic outreach and easing policy norms.
The government under Chief Minister Pinarayi Vijayan became the first Left Democratic Front (LDF) government in the Kerala’s history to send its delegates to the World Economic Forum (WEF) in Davos, Switzerland, in January this year. It also marked Kerala’s attendance at the summit for the first time since 2006, when the Oommen Chandy-led United Democratic Front (UDF) was in power.
Kerala Industries Minister P. Rajeev told the media on the sidelines of the Vizhinjam Conclave held in Thiruvananthapuram last month that the trip to Davos was not sudden and that the Kerala government had been in touch with the WEF for the past two years. He said the Kerala pavilion at the summit was set up in a way that it would showcase “changing the nature of business in Kerala” adding that the government has planned a total of 48 events before the Invest Kerala Global Summit in Kochi on February 21 and 22.
Invest Kerala Global Summit is organised by the Kerala State Industrial Development Corporation (KSIDC) to showcase the state’s potential as a investment hub.
Kerala’s vision of Changing the Nature of Industries is gaining global recognition at #WEF2025. The Kerala Green Hydrogen Valley has been listed first among 33 industrial clusters from 16 countries in the World Economic Forum’s Transitioning Industrial Clusters initiative. This… pic.twitter.com/rvKMCirvbi
— P Rajeev (@PRajeevOfficial) January 30, 2025
Economist Shaijumon C.S. said Kerala could become a care economy if it fails to set up industries because the young population will emigrate to find jobs. “We need to utilise the state’s infrastructures and network them globally. We can’t generate enough employment opportunities for the population just by using the government’s resources,” Shaijumon, an associate professor at the Indian Institute of Space Science and Technology, told ThePrint.
While the Left government’s efforts are being seen as diverging from Leftist ideology, political analyst K.P. Sethunath said it is a misconception that Communist parties are against private capital—different Left governments have embraced it to various extents.
“They deviated from the ideology long ago. Whenever they were in power, they used to embrace private capital,” Sethunath told ThePrint. “They themselves have become entrepreneurial. Look at the CPM-controlled cooperative institutions, banks, and hospitals.”
He said the first Communist government, led by E.M.S. Namboodiripad invited G.D. Birla to set up its Gwalior Rayons factory in Kozhikode’s Mavoor village in 1958. He added that T.V. Thomas, who was the industries minister in the second E.M.S government, also visited Japan to attract Tokyo-headquartered electronics giant Toshiba to Kerala.
He said the Left parties’ core vote base, which was once agricultural labourers and industrial working class who engaged in coir, cashew, and beedi units vanished by the end of the 1990s due to various reasons. This included the shift to cash crops such as rubber.
The middle class, including government employees and teachers, later became its new voter base. “The party has to give what the aspirational class wants. That’s why the party is all for the K-Rail project and other infrastructure developments and big-ticket investments, which have nothing to do with Marxists understanding,” he said.
‘Masala bonds’ to new Industries Policy
Considered a difficult state to be run a business in due to stringent rules and aggressive trade unionism, a key focus of the Kerala government has been to change this image.
A day after returning from Davos, Rajeev, addressing the business fraternity in the Vizhinjam Conclave, said, “Whatever is your requirement in terms of human resources, we are ready to provide that.”
He added that the state doesn’t have any labour-related issues and his department will promptly solve any dispute if it arises. The minister also reminded the crowd that the state was home to the first techno park and first digital university in India.
At the conclave, held to attract investments to the Vizhinjam port in Thiruvananthapuram, operated by Adani group, the company’s CEO Pradeep Jayaraman heaped praise on the Kerala government. “The government is open to suggestions. The government offices are all available. Ministers are available. I suggest the business fraternity to really look at it seriously,” he said.
The state’s increased focus on attracting investment was visible in the first Pinarayi term too. In 2019, for instance, the state-owned Kerala Infrastructure Investment Fund Board (KIIFB) was the first Indian sub-sovereign entity to debut a ‘masala bond’ of Rs 2,150 crore on the London Stock Exchange. A ‘masala bond’ is a debt instrument issued by Indian companies in overseas markets, though denominated in Indian rupees.
After winning a historic second time in 2021, the Pinarayi government brought in the State Industries Policy 2023, which significantly reformed rules and regulations, and provided incentives for start-ups and Micro, Small, and Medium Enterprises (MSMEs).
Suman Billa, principal secretary at the Industries department from 2022 to 2024, said the aim was to focus on Kerala’s advantages and streamline the processes. “We didn’t want to follow other states and invite high polluting industries such as chemical or steel that will also require so much land,” said Billa, who played a key role in formulating the policy.
The civil servant said that Kerala had the advantages of quality of manpower and a good ranking in the human development index, which is why the team he was working with only focused on 20 sectors. This included 3D printing, medical infrastructure, and knowledge-based industries.
As a result, the state had a focused approach in attracting investments. “But the only issue was, we had 150 redundant laws, for which we formed a committee. Multiple clearances were not required. We also put a penalty for officers who do not act on time,” he said.
According to the 2023 policy, Kerala allows No Red category industries to operate for three years without certain prior approvals. These are high-polluting industries with a pollution index score of 60 or above as categorised by the Central Pollution Control Board (CPCB).
It also provides incentive schemes to strengthen exports and startups besides holding sector-wise investor connect meets. In 2020, it launched the Invest Kerala Helpdesk 2.0 to ‘assist entrepreneurs in their investment journey’. The policy also said “made in Kerala” products will be promoted and marketed with special networks with the help of the state.
The Kerala government marked the FY2022-2023 as the ‘Year of Entrepreneurship’ aiming to set up one lakh new enterprises. It achieved this in just 250 days.
‘LDF not against private capital’
“The theory of the Communists may be summed up in the single sentence: Abolition of private property,” wrote Karl Marx and Friedrich Engels in their Communist Manifesto 1848.
The manifesto says that capitalism supports the exploitation of working class labourers by the ruling bourgeoisie and proposes the idea of abolition of private property in land and inheritance. The Communist Party found its base in India in the 1920s. However, the party, which has a strong presence in Kerala, had embraced private capital as early as the 2010s.
It was in 2009, during the tenure of then chief minister V.S. Achuthanandan, considered a staunch Communist, that the state set up the first district Information Technology (IT) parks in Kollam. “LDF is not against the private capital. We do support creating employment opportunities and development,” senior CPI leader Sathyan Mokeri told ThePrint. Sathyan said the Left parties have always been supportive of private investments as long as it helps the public and is not merely a means for the investor to gain profit.
Political analyst Joseph C. Mathew said LDF’s open endorsement of private investment is to showcase themselves as a middle-class party. “They have been like that for a while. Now, they are openly embracing it,” he said. However, he added, the Kerala government fails to show any concrete evidence of investments, though it’s holding many investors’ meets.
(Edited by Sanya Mathur)
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