Kerala has shown robust growth across tourism, IT, MSMEs, and green energy, reinforcing its trajectory toward a knowledge-driven and progressive economy, according to a study by the MSME Export Promotion Council.
Investment Highlights 2021-22 to 2024-25
The study, titled Investment, Growth & Development in Progressive Kerala, revealed that between 2021-22 and 2024-25, the state attracted new investment projects worth ₹70,916 crore. Completed projects accounted for ₹23,728 crore, while revived projects were valued at ₹10,780 crore. Projects under implementation across various stages totaled ₹3,03,720 crore. The data was sourced from the Centre for Monitoring of Indian Economy (CMIE).
Sectoral Progress
Kerala has maintained steady growth in information technology, tourism, healthcare, education, and MSMEs, while new opportunities have emerged in green energy, the knowledge economy, and start-ups. In FY 2024-25 alone, announced projects were worth ₹11,544 crore, with ₹2,944 crore completed and ₹867 crore revived. Private sector contributions included ₹8,119 crore in new projects, ₹675 crore completed, and ₹430 crore revived.
Addressing Implementation Challenges
MSME EPC chairman D.S. Rawat emphasized the need for a high-powered committee to monitor and resolve issues in stalled projects, ensuring timely implementation and avoiding cost escalations.
Tourism and Employment
Kerala has rebounded strongly post-pandemic, welcoming over 2.2 crore tourists in 2024. Tourism contributed 10-12% to the state GDP and created direct and indirect employment for roughly 24% of the workforce, or around 15 lakh people.
MSME Sector Growth and Challenges
The state’s MSME sector has expanded rapidly, with more than 2.4 lakh new enterprises established over the past two years, attracting investments of about ₹15,000 crore and creating nearly 2.2 lakh jobs. However, many MSMEs face challenges including limited access to affordable credit, gaps in government scheme implementation, and a focus on service or retail sectors rather than high-value manufacturing.
Focus on Manufacturing and Support
To ensure sustainable growth, Kerala needs to promote manufacturing MSMEs, enhance marketing support, encourage export orientation, and facilitate technology adoption. Strengthening these areas will help diversify the economy beyond retail and services while creating higher-value employment opportunities.
