Kerala Government's Industrial Growth Claims Are a PR Gimmick, Says Opposition Leader V.D. Satheesan

Kochi, February 17, 2025 – Opposition leader V.D. Satheesan has strongly criticized the Kerala government’s claims of industrial growth, comparing them to the alleged PR-driven narrative of Kerala’s Covid-19 management during the first Pinarayi Vijayan administration. Satheesan asserted that while Kerala should aim to become an industry-friendly state, the government is manipulating data to create an illusion of progress.

"We all want Kerala to have a robust industrial ecosystem that generates employment and fosters social development. However, the current government is fabricating success stories using misleading statistics. During the Covid-19 pandemic, Kerala projected an image of effectively containing the virus. Even international media, including the BBC, initially praised Kerala’s handling of the crisis. However, it later emerged that the state had underreported 28,000 Covid-related deaths, making it the second most-affected state in the country after Maharashtra. The BBC itself corrected its earlier reports. The current claims about industrial growth mirror this pattern," Satheesan stated.

Questioning the ‘Ease of Doing Business’ Ranking

The Kerala government claims to have secured the top position in the Ease of Doing Business Index. However, Satheesan pointed out that the World Bank discontinued this ranking in 2021 due to irregularities and data manipulation. He further challenged the claim that three lakh enterprises were launched in Kerala over the past three years.

"If this were true, each constituency should have at least 2,000 new enterprises. Moreover, assuming each enterprise had an investment of ₹10 lakh, the state's economy should have grown by ₹30,000 crore. This should have also increased Kerala's contribution to the national GDP. However, the Prime Minister’s Economic Advisory Council’s report (‘Relative Economic Performance of Indian States’) shows that Kerala’s GDP contribution remained stagnant at 3.8% in 2022 and 2023, the lowest among South Indian states," Satheesan remarked.

GST Data Contradicts Government’s Claims

Satheesan also challenged the government’s figures based on Goods and Services Tax (GST) registrations. Companies with a turnover exceeding ₹40 lakh are required to register for GST. Additionally, businesses often register voluntarily to avail input tax credit when making initial investments.

"Even if we assume that 50% of the three lakh enterprises do not require GST registration, at least 1.5 lakh new GST registrations should have been recorded. However, only 30,000 new GST registrations were made during this period, according to central government records. Furthermore, there is no data on how many of these have shut down," he noted.

According to K-SWIFT, Kerala’s single-window clearance system for industries, only 64,528 MSMEs received permits between January 1, 2022, and February 1, 2025. Satheesan questioned the government’s three lakh enterprise figure, demanding clarity on the source and authenticity of the data.

Inflated Growth Figures Due to MSME Redefinition

Satheesan also pointed out that a significant portion of the claimed growth stems from the redefinition of Micro, Small, and Medium Enterprises (MSMEs) by the central government in 2021, which included retail and wholesale businesses.

According to Kerala’s Economic Survey Report 2024, a substantial portion of the newly registered enterprises were actually trading establishments, which were not counted as MSMEs until 2021-22. In 2022-23 alone, 48,945 such trading businesses were registered, and in 2023-24, another 43,869 were added.

"This means 40% of the enterprises the government is claiming are merely a result of the revised MSME definition, rather than new industries. Many of these businesses have been operational for years but were only recently classified as MSMEs," he said.

Satheesan further criticized the Ehiyamaha Temeru Ririyela report, which claims a 254% annual growth from July 1, 2021, to December 31, 2023, compared to the previous period. Calling the comparison misleading, he argued that the LDF government’s second term is being projected as more successful than its first term based on artificially inflated statistics.

Call for Transparency and Genuine Industrial Growth

The Opposition Leader concluded by stating that while Kerala urgently needs industrial development to curb migration and boost employment, the government should focus on real progress rather than PR-driven narratives.

"The administration must come forward with accurate data and an authentic roadmap for industrial growth rather than resorting to statistical manipulation to create a false sense of progress," Satheesan said.