27 February, 2021

The Model’s Feet Of Expat Clay

Why the much-touted ‘Kerala model of development’ may just go kaput

Graphic By Ashish Bagchi
The Model’s Feet Of Expat Clay

Demonetisation and the ensuing liquidity crunch have exacerbated Kerala’s economic woes. With fiscal deficit touching Rs 19,000 crore, every penny in the coffers counts. Recent drops in excise and tax collection add to the worries. On top of that, sustained slump in crude oil prices hovering around $45 per barrel, naturalisation (officially mandated preference in the Gulf countries for hiring natural citizens over foreigners), the Yemen war and West Asian turmoil have had far-reaching ramifications for Kerala, which has, for decades, been a major source of expatriate workers in those parts. As the Gulf dream turns into a nightmare with recession, war, layoffs and deportations, pushing more and more of the expats back to where they came from, remittan­ces—a ­major source of Kerala’s ­inc­ome—have been badly hit. Is this the beginning of the end of the much-­vaunted ‘Kerala model of development’?

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