The Left Democratic Front (LDF) government is basking on the perceived success of the Invest Kerala Global Summit (IKGS), which was held in Kochi last week to open the State to trade and investment.
The LDF could claim that it enlisted the national leadership of the Congress-led United Democratic Front (UDF) and of the Bharatiya Janata Party (BJP) in its ambitious initiative to spur Kerala on the path of robust and sustainable economic growth. Chief Minister Pinarayi Vijayan and his Cabinet colleagues, including Industries Minister Rajeeve and Finance Minister K.N. Balagopal, shared the stage with the Leader of the Opposition, V.D. Satheesan, Union Minister for Transport Nitin Gadkari, and Union Minister for Commerce and Industry Piyush Goyal. This was a rare coming together of various political leaders.
However, there is more to what meets the eye. The two fronts in Kerala are preparing to face each other in the local body elections this year and the Assembly elections in 2026. This might explain Kerala’s major bid to woo investment and spur development.
The UDF alleged that the LDF, when it was in the Opposition, had boycotted global investment meetings and chased away investors, including a European car manufacturer. On the other hand, said the UDF, it had attended IKGS to highlight its starkly different approach to the State’s economic development.
The two fronts have also been arguing about the LDF’s claims that the growth of the start-up sector in Kerala has been “stupendous” and industrial development has been “dynamic”. The UDF said that the LDF’s claim of establishing 3 lakh industrial units in the State since 2021 is not reflected in Kerala’s GDP. It accused the government of counting family-run convenience shops, confectionaries, and eateries as MSME units to justify its claims on paper.
The LDF’s claim of a ₹30,000 crore infusion of investment into the State’s industry was not reflected in any national economic survey, the UDF added.
The UDF also questioned the credibility of the claim that Kerala ranks first on the ‘ease of doing business’ rating. It alleged that the ranking agency drew the “erroneous inference” from the “inflated” figures provided by the LDF government. It also noted that Kerala’s IT export values appeared to increase on paper due to the decline in the rupee. Kerala had only one unicorn company in the start-up sector. It said that Kerala’s start-up sector earnings were paltry compared to those of neighbouring States.
The UDF cited instances of “investor suicide” in Kerala, particularly in strongholds of the Left, and alleged that the LDF had turned the State into a graveyard for entrepreneurs. In an acerbic editorial, the Congress’s Kerala mouthpiece, Veekshanam, said that lauding Kerala’s “dismal” industrial growth under the LDF government was akin to “giving the peace prize to an executioner”.
The LDF countered this by stating that Congress MP Shashi Tharoor had praised Kerala’s “stupendous growth” in the start-up sector as well as the State’s “remarkable” ‘ease of doing business’ climate. It claimed that Mr. Tharoor had drawn the inference from data published by credible national and international monitoring agencies, including NITI Aayog, that testified to Kerala’s social, economic and development achievements.
The UDF and the BJP-led National Democratic Alliance (NDA), and the LDF, differ over Kerala’s economic direction. The UDF and the NDA took to the streets to protest the LDF’s flagship semi-high-speed railway project, Silverline (K-Rail), in 2023. Both coalitions have branded the Kerala Infrastructure Investment Fund Board (KIIFB), a State-run special purpose vehicle for raising funds from the open financial market to catalyse critical infrastructure development, a “white elephant”. The Congress and the BJP have also accused the KIIFB of pushing the State into debt through its “outside the Budget” borrowings at “an extortionate interest rate” through masala bonds and without the foresight to invest in revenue-generating infrastructure. They have also opposed the LDF’s purported move to impose a user toll on roads and bridges constructed with KIIFB funds.
While the UDF and the NDA may have made a point through their presence at the meet, whether the LDF may do the same in the future, if it finds itself in the Opposition, remains to be seen.
Published – February 25, 2025 01:44 am IST
