Thiruvananthapuram | Chief Minister V D Satheesan on Wednesday said the celebrated Kerala Model of Development should not be treated as beyond criticism.
He argued that the model had become stagnant and needed to evolve into a 'New Kerala Model' focused on investment, productivity and job creation.
Satheesan made a strong pitch for greater private participation in the state's economy, saying the 'New Kerala Model' should actively encourage private capital while preserving public welfare.
Replying to the debate on the state Budget in the Kerala Assembly, Satheesan said the existing model, known for its emphasis on education, healthcare and welfare, should be modernised to address emerging economic and fiscal challenges.
"As I said earlier, no one should treat the so-called Kerala Model as something beyond criticism. The Kerala Model has become stagnant and is gradually losing relevance. It needs to be transformed into a New Kerala Model," he said.
"What should this New Kerala Model look like? It should increase productivity, attract investment, strengthen the industrial and service sectors, create employment opportunities, and ensure that economic growth boosts the state's revenue, enabling further improvements in public services," he said.
The Kerala Model has long been recognised for its emphasis on education, healthcare and social welfare, helping the state achieve high human development indicators despite relatively modest income levels.
However, concerns have increasingly been raised about its sustainability due to fiscal pressures, unemployment, demographic changes and other structural challenges.
Declaring that his government was pursuing a fresh development strategy, he said: "We are creating a New Kerala Model."
He added that private investment should be encouraged across sectors wherever feasible.
"This can be achieved through private participation. Kerala needs private investment, and it should be encouraged in every sector where it is feasible. Wherever possible, private capital should be welcomed and investment actively promoted," he said.
Recalling an investment conclave in Ernakulam, Satheesan said political leaders across party lines had supported efforts to attract investors and reassured businesses that Kerala was a favourable investment destination.
"We extended our full support because Kerala needs investment. Our message was simple: there are no obstacles here, and investors should feel confident about bringing their projects to the state," he said.
Satheesan defended the economic reforms introduced by former Prime Minister Manmohan Singh, criticising the Left for repeatedly describing them as "neoliberal policies."
"You repeatedly use the term 'neoliberal policy.' How long have you been making that argument?" he asked.
"When Manmohan Singh introduced economic reforms, India was facing a severe financial crisis. At the time, the country had to pledge part of its gold reserves because of the dire economic situation. Today, Kerala's finances are in a similarly difficult position," the chief minister alleged.
Arguing that economic growth and welfare could go hand in hand, Satheesan said the reforms had expanded government revenues, which were later used to fund programmes such as MGNREGA, rural healthcare and education.
