It’s Coimbatore vs Palakkad

Mythili Bhusnurmath

Economic Times – 28/01/07

THEY could have been twin growth centers, like Gurgaon and Delhi or Noida and Delhi. Except that Coimbatore is in Tamil Nadu while Palghat (now Palakkad) is in Kerala. Which also explains why the former is a prosperous, bustling town home to hundreds of thriving textile, sugar and engineering units as well as to a number of reputed institutions of higher education and hospitals, while Palakkad, just 40 kms or so away is a town in decay.

So even as the number of industrial units in Coimbatore has grown by leaps and bounds, Palakkad has seen a steady decline. As against 1775 small scale industrial units registered in 2000-2001, only 923 were registered in 2002-03, the number falling to just 114 in 2003-04. The town has few institutions of higher education of worthwhile repute while medical facilities are nowhere comparable to Coimbatore.

Take NH47 from Coimbatore to Palakkad and the contrast hits you almost immediately. Gone is the hustle and bustle of Coimbatore; to be replaced by the familiar red flags that dot the landscape in God’s Own Country. There are few factory buildings that have either been abandoned — like the cement factory set up in the 60s and forced to close following incessant labour trouble or have seen better days. Yet on the face of it Palakkad in Kerala should be a far more attractive place for any kind of enterprise. Water is plentiful compared to Coimbatore, the labour force is educated and the quality of life as reflected in human development indicators is higher in Kerala than Tamil Nadu. But the real story is different. In Palakkad scarcely a day goes by without some demonstration or other that at the very least disrupts work if it does not bring life to a complete standstill. The reasons may vary — from protests against Saddam Hussein’s death to demonstrations against the rise in prices or the hike the motor insurance — the bottomline is nothing is too trivial a reason; nor is disruption of everyday life too high a price.

The net result is that few businessmen want to set up base in Palakkad. They would rather go to Coimbatore. So even as places like Noida in UP are able to reap the benefits of being close to a growth center like Delhi and, in turn, become a focal point for growth in the surrounding areas, Palakkad is not.

In the past when all states were in a kind of ‘steady state low-level equilibrium’ and grew relatively slowly, this did not matter much. Not any longer. So a state like Tamil Nadu that has initiated industry-friendly policies has made great strides, while Kerala has not. It is no surprise, therefore, that while Tamil Nadu has seen a sharp fall in the percentage of poor households — from having the second-highest ratio in the country, it is now ranked 12 in the league table of states — Kerala has made much slower progress. According to the NCAER’s India Market Demographics Report 2002, it still has the fifth highest percentage of poor households among all states.

Economists, depending on their hue, talk with varying levels of passion about the merits of the Kerala model of development with its relatively high human de- indicators. But if the contrast between Coimbatore and Palakkad — both impressionistic and backed by data — is any indication, it is only a matter of time before Kerala trails her neighbouring southern states by an increasingly wider margin. The tragedy is that unlike in West Bengal, where the Left has woken up to the lost opportunities, in Kerala, it is still caught in a time warp.