DRAFT
APPROACH PAPER FOR KERALA’S ELEVENTH FIVE-YEAR PLAN
I. BACKGROUND
1.1. There is a paradox at the heart of Kerala’s economic performance. During the years, prior to 1987-88, when the state’s growth rate was unimpressive, and its material commodity producing sectors virtually stagnated, Kerala received world-wide acclaim on account of its remarkable achievements in the sphere of human development, which were celebrated as the “Kerala Model”. Since the latter half of the eighties however, when the growth rate began to pick up, Kerala’s economic woes have increased, notwithstanding the emergence of certain new growth sectors. The per capita foodgrain absorption which had increased during the earlier period, has scarcely done so during the latter; the per capita daily calorie intake, always surprisingly lower than might be expected, has stagnated over the latter period (which makes the reported decline in official poverty ratio suspect); and there has been an acute agrarian crisis (since the late nineties) which has reportedly taken close to 2000 lives through farmers’ suicides. In addition, the state has been afflicted by a fiscal squeeze that puts a question mark even over the continuance of the so-called “Kerala Model”, which is already threatened by the retreat, enforced by the Union government’s measures of reform, from a universal Public Distribution System for foodgrains. This fiscal squeeze also underlies the fact that plan outlay in Kerala over the last quinquennium has been abysmally low (less than 5 percent), and even declining, relative to GSDP.
1.2. If the decline in the plan outlay of the state, even in the midst of apparently impressive growth (of over 6 percent per annum of late), is intriguing, then the maintenance of such impressive growth, notwithstanding the decline in plan outlay, is no less so. There can scarcely be any doubt however that such meager plan outlays, if sustained over several years, will impinge adversely, if not on the rate of growth of GSDP itself, then at least on the quality of the social services whose excellence constituted the core of the so-called “Kerala model”.
1.3. This is disturbing in itself. It is also disturbing for an additional specific reason, namely that the very success of Kerala in providing literacy and healthcare has not only brought down the birth rate and the infant mortality rate, but has also increased longevity. Consequently, the age composition of the population is changing significantly in favour of the older age groups. This fact is going to place an additional demand upon the health-care system of the state (even as the increased demand for pension payments further restricts the possibilities of raising plan outlays).
1.4. Kerala’s impressive social sector record makes demands in other ways as well. The very spread of elementary education implies a change in the nature of the problem of unemployment. The type of work demanded by the educated unemployed is different from that demanded by the unskilled unemployed, or those denied access to education. It is not enough therefore to have a scheme like the Employment Guarantee Scheme that ensures 100 days of employment, in the form of manual work, per household per annum. Such a Scheme may alleviate the destitution associated with unskilled unemployment, but, given the smallness of its skilled work component, it does little to meet the aspirations of the educated unemployed. The nature of employment generation in Kerala therefore has to change in keeping with the spread of education.
1.5. This does not mean that the problem of “simple unemployment” (that is unemployment of simple low-skilled labour) does not exist in Kerala. Though this impression is widely prevalent, and the conclusion is often drawn on the basis of it that there is little relevance of the Employment Guarantee Scheme in the state, it is incorrect. The fact that in the two districts, Wyanad and Palakkad, where the EGS has been introduced, the number of applicants has been remarkably large, is an indication of the existence of significant “simple unemployment”.
1.6. Absolute poverty, which has been the focus
of attention in
1.7. Any development strategy for the state therefore has got to be a two-pronged one. On the one hand it has to address the problem of the agrarian economy: how to overcome the immediate agrarian crisis; how to provide immediate relief through the Employment Guarantee Scheme; how to put the agrarian economy on a sounder footing, through a combination of protection and support for the peasantry (including women cultivators and women managers of family farms), with technological upgradation of peasant production and the innovation of new forms of organization to improve its viability. On the other hand it also has to address the problem of educated unemployment and unemployment of the Gulf returnees, preserve and extend the magnificent achievements in the social sector, and expand the modern secondary and tertiary sectors (including in particular the IT and biotech sectors), even while nurturing and making viable the traditional industries and occupations. There is of course an interconnection between the two parts of this strategy: a revamping of the agrarian economy, not through a displacement, but through a strengthening, of peasant production, will enlarge the domestic market and hence be conducive to the growth of secondary and tertiary sectors. But at the level of the state, where imports from the neighbouring states are free to flow in, the multiplier effects of any initial home market expansion can easily leak out. Too much should not be made therefore of the second-order effects of an agriculture-led expansion of the home market. Each of the two prongs of the strategy has to be put into effect separately.
1.8. One particular interconnection however can be fruitfully used. An increase in social sector expenditure, on education, health-care, sanitation and other such items, has the effect of both improving the quality of human life, and providing jobs to educated job-seekers. And the demand for social sector services, whether it comes from the agricultural sector, or from the workers of the social sector itself, or from elsewhere, is unlikely to leak out of the state, given both the intrinsic difficulties of such leakage, and the fact that Kerala has an overwhelming “comparative advantage” in the provision of social sector services. The same is true of a whole range of tertiary sector activities: the demand for them cannot easily leak out and they can provide significant employment to the educated job-seekers.
1.9. It follows that the basic approach of the eleventh five year plan for Kerala must be as follows: the government must be directly engaged, through larger plan outlays, through the enactment of appropriate policies, and through the innovation of appropriate organizational forms, in the primary, traditional and social sectors; it must also be engaged in industry, in information technology, in bio-technology, and in the commercial segment of the tertiary sector, but with a view also to creating the right environment for the flow of private capital into these sectors. Thus not only does the strategy of intervention have to be two-pronged, of tackling simple unemployment on the one hand and educated unemployment on the other, but even the mode of engagement has to be a differentiated one.
1.10. The specificity of this approach, and of the
perception underlying it, becomes clear if we contrast it with certain other
commonly discussed approaches. Three other approaches can be taken in this
context. The first sees the challenge to planning in Kerala essentially in
terms of meeting the aspirations of a burgeoning middle class. It believes that
the problems of simple unemployment and rural poverty, which afflict other
parts of the country, are of little significance in Kerala, that these problems
belong to Kerala’s past but not its present, which is dominated by the need to
find what one may call “middle class” employment opportunities for the growing
numbers of educated job-seekers. As argued earlier, this picture, sadly, is not
true: simple unemployment and rural poverty are still very much a part of the
reality in Kerala, and therefore necessitate a two-pronged rather than a
single-track strategy. The second commonly-discussed approach would visualize
substantial government engagement, in the form of plan outlays and public
investment, in all sectors, as was the case in the earlier years of planning in
II PROPOSED SIZE OF THE ELEVENTH PLAN
2.1 Against the projected Tenth Plan outlay of Rs.24000 crores at 2001-02 prices, the actual outlay in current prices for the first four years of the Tenth Plan was only Rs.16105.44 crores. Even assuming that the revised outlay of Rs.6712.50 crores for 2006-7 is realized, the total outlay for the Tenth Plan in current prices would still have fallen short of the original projection of Rs.24000 crores at base prices. But there may also be a shortfall, relative to the revised projection, in this final year. If we assume that the actual outlay during this year remains at the same level as in 2005-06, then the total current price plan outlay would have come to Rs.20822.14 crores, which in real terms would be only about three-quarters of the projected tenth plan outlay.
2.2. The binding constraint on plan outlay during the Tenth Plan appears to lie neither in the salary increases decreed in the wake of the Pay Commission recommendations, nor in any slackness in the state’s fiscal effort. The state’s Plan outlay was being cut even before the salary increases were decreed. Likewise, the state’s own tax revenue collection has not fallen short of the plan projection. Against a Tenth Plan projection of Rs.31577.68 crores of own tax revenue at 2001-02 prices, the actual collections at current prices are likely to exceed Rs.45000 crores over this five year period, which, no matter what deflator we use, would imply an over-fulfillment of the real plan target. Where one can fault the tax effort is that it has been inadequate relative to the needs of current expenditure, which has forged ahead: on three expenditure items alone, viz., interest payments, salaries and pensions, the excess of actual expenditure (at current prices) over the plan projections (at base prices) comes to Rs.22868 crores. Even this expenditure over-run on the non-plan side however can not explain the shortfall in plan outlay. These expenditure items of course are not easily compressible: the government cannot default on its interest obligations; nor can it renege on pensions payments or prevent long overdue salary revisions. But even with the expenditure increases under these heads, Kerala could still have had a much larger plan, close to what was projected, if the government had not followed a deliberate policy of plan expenditure deflation. The government imposed upon itself a fiscal squeeze. It cut plan expenditure by reducing its borrowings well below what the Tenth Plan itself had envisaged. Its annual receipts from borrowing at current prices for the six years 2001-02 to 2005-06, was Rs.4293.39 crores, which was lower in absolute terms than even the figure for 1999-00, Rs.4436.57 crores. And against a total Tenth Plan projection of Rs.4330.26 crores at 2001-02 prices for “Miscellaneous Capital Receipts”, the actual receipts for the first four years of the plan were merely Rs.-181.04 at current prices. True, miscelleaneous capital receipts fluctuate a great deal on account of debt repayments, but the government could have rolled over the debt, through borrowings under other heads, without cutting the plan. It did not do so. Instead it curtailed the fiscal deficit drastically, from 6.3 percent of the GSDP in 2002-03 to3.8 percent in 2005-06. It even passed an Act to bring down the fiscal deficit, long before either the Finance Commission or the Government of India forced it to do so. And while the target enjoined by the Finance Commission was 3 percent of the GSDP, the same as the central government has under the Fiscal Responsibility and Budgetary Management Act, and the same as the European Union has under the Maaschtrict Treaty, the Kerala Act’s target was a mere 2 percent. If such fiscal conservatism is eschewed (as it must be) and if the tax mobilization effort can be maintained at a reasonable level, then the eleventh plan can witness a sizeable increase in plan outlay, even in the absence of any increase in Central assistance or external assistance.
2.3. The basic assumptions underlying the proposed eleventh plan outlay arrived at below should be spelt out. We assume a real GSDP growth rate of 8 percent during the eleventh plan period, which is apparently the growth rate actually experienced over the tenth plan period. We assume a tax buoyancy ratio of 1.15, which again is apparently not out of keeping with past experience. The own tax revenue at base (2006-07) prices therefore is projected to grow at 9.2 percent per annum during the eleventh plan. For the Central government a tax buoyancy ratio of 1.10, the same as assumed in the Draft Approach Paper of the Planning Commission, is assumed and the GDP growth rate is taken to be 8 percent, suggesting a growth rate in Central revenue of 8.8 percent: the share of the state in Central tax revenue is accordingly projected to growth at 8.8 percent. With non-tax revenue projected to grow at the modest rate of 1 percent, with devolution to local bodies under non-plan revenue expenditure (outside of the development fund) projected to grow at 5 percent, interest payments at 5 percent and salaries and pensions at 2 and 4 percent respectively, we work out the plan size on the assumption that net market borrowings (SLR based), negotiated loans and normal central assistance remain unchanged in absolute terms at the same level as in 2006-07, and that no new externally-aided projects come to the state. As regards small savings the expected figure in 2006-07 is projected not to exceed Rs.2000 crores (which is below the revised budget estimate); we assume that in the subsequent five years it grows at base prices at the same rate as the real GSDP, i.e. 8 percent. On these fairly cautious assumptions, the plan size for the eleventh plan can be put at Rs.34831 crores at base (2006-07) price, or Rs.35000 crores in round figures. This is around 50 percent higher in real terms than the actual size of the tenth plan.
2.4 This, it must be remembered, is not the size of the actual plan that is visualized to unfold in the state during the period 2007-8 to 2011-2. Quite apart from the obvious fact that it refers only to the government sector, there are at least three reasons for this. First, this figure of Rs.35000 crores is based on the assumption that a number of items on the receipts side such as negotiated loans, SLR-based net market borrowings, and normal central assistance remain frozen at their 2006-07 level for the entire subsequent quinquennium. This is both because at the moment it is difficult to put any figures to these items, and because an exercise based on the assumption that the state freezes its borrowings under these heads, and hence brings down its debt-GSDP ratio, is worth doing anyway. Hence the above-mentioned outlay of Rs.35000 crores constitutes a minimal variant of the state plan. Secondly, this figure assumes that no new externally-aided projects are undertaken in the state during the plan period. At the moment the Central government considers Kerala a “debt-stressed” state and bars any such projects. With the lifting of this bar, either through negotiations or through Kerala’s debt-GSDP ratio bettering the central “norm”, the plan outlay will increase correspondingly. Thirdly, there is a certain outlay that is incurred on centrally-sponsored schemes located in the state, and the bulk of it comes from the central government. This central outlay in centrally-sponsored schemes is a part of the plan outlay undertaken within the state but not of the state’s own plan outlay. (The term “gross plan outlay” is used to denote the sum of the state’s own plan outlay and the central outlay on Centrally Sponsored Schemes). The actual outlay undertaken within the state therefore will be considerably larger on account of this.
2.5 We have so far talked only of the outlay projection but not of any growth target, as is commonly done in Plan documents. The reason for this is three-fold: first, the growth figure in plan documents is arrived at by assuming a given incremental capital-output ratio and applying it to the proposed ratio of total investment to GDP during the plan period. But since the above outlay figure refers only to the government’s outlay and not to any private investment, whose size remains unknown, we cannot arrive at any growth rate target even on the assumption of a given incremental capital-output ratio. Secondly, the assumption of such a given ratio gets vitiated in the presence of demand constraints. In the earlier phase of planning, the nation’s economy was indeed a supply-constrained one and scarcely faced any serious demand constraints. In the more recent period, especially since the adoption of liberalization measures, demand constraints have become pervasive, so that the assumption of a given incremental capital-output ratio makes little sense for the national economy. Thirdly, the assumption of such a given ratio makes even less sense for a state economy, both because of the existence of overall demand constraints in the national economy, and because demand leaks out in any case from one state to another so that any assumption that the state economy would be free of demand constraints, on the basis of which alone growth rates can be predicted, would be unrealistic.
2.6 At the same time we have to ensure consistency in the plan outlay figure in the following sense: the outlay figure, which is based on a certain assumed growth rate, must not be too small for the achievement of that growth rate itself. This of course is one-way consistency: the outlay figure being too large relative to the assumed growth rate should not matter (because over-achievement is not a problem here while underachievement is). But since the assumed growth rate of 8 percent is what has apparently actually obtained of late, and since the eleventh plan proposes to raise the outlay-GSDP ratio compared to the tenth, the consistency of the plan calculations cannot be challenged on the grounds that the assumed growth rate is too high given the projected plan outlay.
2.7 While we should not specify any growth rate targets, since they would be meaningless, but should remain content with only a set of indicative figures of minimal outlays, our approach towards certain key sectors needs to be spelt out. This is done below.
III AGRICULTURE
3.1 The state is afflicted by a serious agrarian crisis, with the peasantry in at least five districts facing acute distress, and with a large number of suicides in at least one of them, Wyanad. The proximate causes behind this distress are: the price-crashes in a number of cash crops in the world market, to which the peasants have become exposed with trade liberalization; the downgrading of the state-run commodity purchase and marketing boards and the subsequent cornering of the purchases of cash crops by a small number of Transnational Companies (which pay the growers much lower prices than the global price warrants); the competition from Sri Lanka, and third countries using the Sri Lanka route, in crops like tea and pepper under the Indo-Sri Lanka Free Trade Agreement; and the rise in the prices of a range of inputs, including credit, owing to the withdrawal of subsidies, financial liberalization and other measures of liberal reforms. The crisis in short is not of Kerala’s own making. It is a result essentially of the withdrawal, in the era of liberalization, of the support and protection of the State that peasant production had enjoyed in the pre-liberalization era. Even though the blame for the withdrawal of this support can not be laid in the main at the door of the state government, an active policy will have to be pursued by the state government to press for a reversal of this withdrawal and to nullify to the degree it can the effects of this withdrawal. Some of its direct measures will aim to have an immediate impact and some will aim for longer-run consequences.
3.2 The most immediate measure is the provision of debt-relief, for which the state government is setting up a Debt Relief Commission, which will approach the problem on a case by case basis, negotiate debt-waiver by banks, fix the amounts payable to the private moneylenders, and recommend debt write-off in cases of destitution (where the state government may take over the debt).
3.3 Debt relief however is insufficient. Agricultural production has to be made remunerative. While the immediate means of doing so will have to be through price-support, backed by appropriate tariff protection, this will have to be accompanied by longer-term measures. The state government is setting up an Agricultural Commission to recommend such measures. But at least three issues are of paramount importance and need to be addressed. One is a re-emphasis on food-crops, notably rice. The acreage under rice has been declining for many years, and rather precipitously of late. This is disturbing for several reasons: first, excessive dependence on imports from outside for the main item of foodgrain consumption is dangerous for food security. The point is not that Kerala should become self-sufficient; but it should produce at least a certain minimum portion of its needs. Secondly, rice production is more employment intensive than other uses to which rice land is normally put. The decline in acreage under rice therefore results in a shrinking of employment opportunities, particularly for women among whom the agricultural work-force constitutes over 40 percent of the rural work-force. Thirdly, the risks arising from price fluctuations are less in the case of rice than for many cash crops. This is partly because foodgrain production allows greater scope for withdrawal from the market in the event of a price-crash, partly because the possibility of carrying out minimum support price-cum-procurement operations is greater for a crop with a large domestic market than for an export crop, and partly because a framework of such an MSP-procurement system already exists in the country, no matter how weakened in recent years. (It is not accidental that suicides have occurred mainly, if not entirely, among farmers growing cash crops). But while the case for preserving at least a certain minimum level of rice production in the state is strong, the question is whether rice production can at all be made remunerative for the growers at the prevailing market price. The answer to this depends on our ability to introduce technological and organizational changes, discussed below, in the rice economy, and indeed in the agricultural economy in general. If such changes can make rice cultivation viable, then the period of their introduction may be covered by a transient and selective subsidy.
3.4. The main organizational change currently looming on the horizon is the entry of corporate players, including Multinational Corporations, into agriculture, whether as producers, or as providers of retail outlets, or as partners in contract farming. The much talked about “Rural Business Hubs” are linked to this phenomenon, not logically of course, but practically. The entry of corporate players will have a number of adverse consequences: first, it will make corporate profitability the decisive determinant of the pattern of land use, and hence of food availability, thus undermining food security; second, given the fact of price fluctuations (in the absence of government intervention), the corporate players will “pass on” low prices to the peasants, but not high prices, causing an even greater squeeze on the peasants than fluctuations alone would have caused. (This is visible already in crops like tea, coffee and pepper). Third, given the unequal bargaining strengths of a multitude of peasants on the one hand and a handful of corporate players on the other, the peasants will get further squeezed in several ways. And fourth, once the mode of land use is opened up to corporate profit-seeking, the way becomes cleared for the dispossession and displacement of peasants and a reduction in the employment opportunities. The organizational change that can provide an alternative to this is the formation, with government support and participation, of co-operative organizations of growers which can procure from them at fixed prices and market the produce, after suitable value addition, through their own retail outlets or through those of other co-operative institutions, or through ration shops, or even though the existing private retail outlets. If corporate capital is at all allowed to deal in agricultural produce, then it should be asked to deal with the co-operatives rather than with individual peasants. For such a scheme to work however co-operatives would have to be run professionally and would require an appropriate trained management cadre of their own. The co-operative movement in the state till now has been less of a success than one might have hoped. But it has to be persisted with and run much more professionally.
3.5. Co-operatives should also encompass production co-operatives, or “group farming”. The importance of this in Kerala’s context arises for two specific reasons: first, owing to legal restrictions on tenancy in the state, a certain amount of agricultural land remains fallow. Arguments have been advanced to lift these restrictions altogether, but this, in the context of the current agrarian distress and tendency towards corporate encroachments into the agricultural sector, could well lead to dispossession of the peasantry and a rolling back of Kerala’s historic land reforms. An alternative could be to legalize the leasing in of land, not by individuals or corporate agencies, but only by agricultural workers’ co-operatives, who would then cultivate it co-operatively. This would achieve three objectives simultaneously: reduce the extent of fallow land; increase employment opportunities for agricultural workers; and give a fillip to co-operative movement. Moreover, if some of the work put in by labourers could be financed under the Employment Guarantee Scheme, then an implicit subsidy would have been obtained from the central government by the co-operativized agricultural workers. A second reason for encouraging co-operative farming is that self-help groups like (Kudumbasree), which constitute successful institutions in the state, have been entering into agricultural production, and this trend should be strengthened. The Labour bank experiment is of great importance in this regard, and holds out much hope for the prospects of co-operation in the state. The few cases of group homestead farming which have come into being of late are also pointers to a co-operative future.
3.6. There is no alternative however to the introduction of technological change in agriculture. Such change is damaging when it gives rise to labour displacement, unemployment and destitution. But if such change raises the yield per acre and is not labour displacing, or, if, while raising the yield per acre, it does displace some labour, but this displacement causes not unemployment but work-sharing within a co-operative framework, then it can improve the viability of co-operativized peasant production without causing any concomitant destitution. In this context, the potentials of organic farming which is claimed to have achieved success in some areas, deserve close examination. The System of Rice Intensification (SRI) which reportedly raises the yield per acre substantially, uses less water, and does not displace labour, should also be investigated, and actively popularized if the claims are found to be correct. Watershed development is one area which has aroused great expectations. The Employment Guarantee Scheme in the state is sought to be dovetailed with the Watershed Management programme which is already in operation through several different schemes. But if the Watershed Management programme is accompanied by the formation of co-operatives, for procurement and marketing to start with (though co-operative farming can be tried where the conditions are propitious), then a veritable change can come about in the countryside. The problem with the present Watershed Management programmes is that they are largely technocratic, and are not dovetailed into any organizational changes involving the unleashing of peasant initiative. They represent technological change, but such change, without any accompanying organizational change, is likely to remain incomplete and hence limited. Above all however there must be increasing local value addition, and the setting up of local agricultural processing units, where again growers’ co-operatives can play a catalytic role. District Co-operative Banks in Kerala have plenty of funds, which can be utilized for this purpose.
3.7. In addition there must be diversification to complementary activities. Even when rice production alone may not be sufficiently remunerative, the rice-fish cycle, wherever it is possible, may render it so. One complementary activity which can play an enormous role in the agrarian economy as a whole is animal husbandry: goat raising, poultry, piggery and, above all, dairy production, where a strong co-operative movement already exists in the state. Anand pattern dairy co-operatives have a membership of well over 7 lakhs, and procure more than 7 lakh litres of milk everyday. The Kerala Co-operative Milk Marketing Federation, which has been diversifying its milk products, has even to procure milk from outside owing to the high seasonality in the pattern of milk production in the state. Since this co-operative distributive network already exists, the scope for increasing milk production in the state is substantial.
IV EDUCATION
AND SKILLS
4.1. While Kerala has done remarkably well in the spread of literacy and elementary education, the sphere of education in the state is nonetheless beset with a number of serious problems. There are at least six obvious problems that can be identified. First, vestiges of illiteracy still remain. Close to 25 lakh persons in the state still remain illiterate, of whom nearly 18 lakh are women. And this must be overcome. Secondly, in the sphere of child education, there is an urgent need to provide much better amenities. Even in the mid-day meal scheme, which is an important source of nourishment for children from poorer families, what is provided is extremely meager. The long-standing demand for supplementing the meal with a glass of milk has still not been met. Thirdly, the academic quality of school education is in urgent need of improvement, especially in subjects like Mathematics and English, of which the former is a basic discipline, and the latter is at a premium in the job market. Fourthly, the quality of higher education too is in urgent need of improvement. It places students from the state at a disadvantage, compared to students from several other states, in the pursuit of excellence. Fifthly, much of professional education has become a means of amassing profits. Since the demand for professional education, especially engineering and medicine, has far outstripped what the state government has been able to provide, there has been a mushrooming of private professional colleges whose penchant for profits (under several different guises) has ignored merit, excluded students from poorer families, placed an enormous burden on middle class families (whose children can just about make it), and reinforced social and economic inequalities. Sixthly, in the sphere of other types of skill impartation, which prepare students for vocations, not only have these problems been replicated, but there is a gross insufficiency of institutions.
4.2 A significant increase in government outlay, for removing illiteracy, for universalizing pre-primary education, for upgrading knowledge levels, for improving amenities, for giving better nourishment to children, for providing scholarships to deserving students, both boys and girls, and for starting new institutions, is certainly a necessary step for overcoming many of these problems. But this has to be supplemented by several other measures. One set would consist of giving larger responsibility to the local self-governing institutions, through whom larger outlays must be channelized, especially into schemes like the mid-day meal scheme.
4.3 A second set would consist of purely academic measures, like revising curricula and syllabi, strengthening and improving the course content and the mode of examination, and promoting closer academic interaction with the outside world, not just with scholars from outside who come to study Kerala’s society and problems, but with the outside academic world in general. (Having campuses in Kerala of institutions like the IIT can help in this respect by opening a window to the outside world)
4.4. A third set of measures relates to social regulation of private professional institutions. The recent Education Bill passed by the Legislative Assembly is a major step in this direction. It is a pioneering piece of legislation, since the problem of private profiteering in professional education is not unique to Kerala: it plagues the entire country and continues despite the strictures of the Supreme Court. Kerala is the first state to enact legislation for comprehensive social regulation of private professional colleges so that merit is rewarded and social and economic exclusion are overcome. Efforts in this direction have to continue.
4.5. The fourth set of measures require the formulation of a clear policy with respect to new private institutions that may be started within the state or that may come into the state from outside. The regulatory mechanism of the Education Bill will not be sufficient for dealing with such cases; nor would a mere ban on profiteering be enough. While both these restrictions will be necessary, additional steps, e.g. for stringent verification of the corpus fund, and of the mode of land acquisition, will have to be taken. While turning down all such requests for the setting up of new institutions will not be in the interests of the students of the state, succumbing to all and sundry in the fear that rejecting a request will make the applicant move elsewhere, is unwise.
4.6. The fifth set of measures relate to the imparting of specific skills. Since 64 percent of males and 54 percent of females in the age group 20-59 have at least 8 to 10 years of education, a large number of the unemployed in Kerala must belong to the educated unemployed category, whose aspirations can be met if they are given some training in specific skills. Government institutions, either existing ones or newly created ones, can provide such training. Private institutions can in addition be inducted for the purpose, subject to suitable regulations. The experiment of vocational schools which came into being some time ago, has not been as successful as one might wish, perhaps because the students were given an un-digestible overdose of a mix of traditional and vocational training in these institutions, and the vocational training itself was not combined with adequate practical experience. While these schools have to be revamped, there is need for new institutions imparting vocational skills. The imparting of such skills becomes particularly important in the context of the substantial demand in the Gulf countries for many of these skills. The question of course arises whether the state’s resources should be used for servicing Gulf demand. But since the income it generates has flowed back significantly in the form of remittances, the outlay on imparting such skills will not be without economic merit. If it is found at a later date that the outlay on such training is not yielding adequate returns, or “externalities” to the state’s economy, then specific measures for enhancing such returns can be introduced.
V THE HEALTH CARE SYSTEM
5.1 The private sector dominates curative health-care in the state. While the government-run primary and community health centres have a long and distinguished track record, they are debilitated by the inadequacy of the infrastructure and the shortage of qualified medical personnel. The Local Self-Governing Institutions to whom they have been transferred are in no position to overcome these deficiencies owing to the shortage of funds they face as a consequence of the fiscal crisis of the state government. This also cripples any government initiative for strengthening preventive health-care, improving the environment, and reducing the high level of morbidity in the state which is not just the consequence of increased longevity as is often assumed. Private health-care is much more oriented towards super-specialty hospitals which are expensive, run on commercial considerations, and not intended to cater to the needs of the poor. To overcome the problems arising from the paucity of resources, two suggestions have been put forward. One is to raise user charges in government hospitals. But since the rich more or less self-exclude themselves from the government health-care system, any increase in user charges, if it is to garner significantly larger revenues, will have to impinge on the poorer sections of the population, among whom moreover the incidence of morbidity is particularly high. Raising user charges as a means of making the public health-care system viable will amount therefore to throwing the baby with the bath-water. The second suggestion is not to expand the public health care system but to go in for a system of vouchers, where the government can reimburse needy private patients for their treatment in private hospitals. This however amounts to a system of government subsidization of expensive private health-care. There is no alternative therefore to increasing government outlays on health-care. In particular, government health services have to be strengthened at the primary level, encouraging sustained health-seeking behaviour. This would be beneficial in the long-run by reducing the burden of chronic diseases and the need for prolonged hospitalization.
5.2. An important way of mobilizing resources for the public health-care system would be to tax private hospitals. There has been some discussion in other parts of the country of late that such private hospitals, which are often given prime land by the government at cheap rates (a form of implicit subsidy), neither fulfill any social obligations by way of treating a certain percentage of patients (belonging to the poorer sections) free, nor contribute towards financing, via tax payments, the public health-care system. While the situation in Kerala may not be an exact replica of what prevails elsewhere, the fact of evasion of social responsibility by private hospitals is as true here as elsewhere.. The voucher system, instead of forcing such hospitals to meet their social obligations, actually rewards them for evading such obligations. A system of taxation of such hospitals has to be worked out, with the proceeds earmarked specifically for the public health system and for schemes of preventive health-care.
5.3. Such taxation does not however obviate the need for some degree of social regulation of private health-care charges. The building up of the public health-care system to a level of some adequacy will take time. In the interim, even the not-so-affluent public will have to continue its dependence on the private system. The need arises therefore for making this system more “affordable”. It becomes even more pressing if the government resorts to a voucher arrangement, only as a transitional measure when the public health system is getting built. If total health-care expenditure is decomposed into three components, consultation costs, diagnostic costs, and drug costs, it turns out that the largest of the three components is the diagnostic cost, which also happens to vary significantly across institutions. It needs to be regulated, and made more uniform across institutions. Likewise, drug costs could be restrained through recourse to community pharmacies (like those being run in medical colleges) which do provide some relief.
5.4. Similarly, a scheme of making it obligatory for all students who successfully complete their medical degree to spend a certain number of years in primary health centres will go a long way in meeting the shortage of doctors at such centres which are at the core of the public health system. Obligatory PHC duty for young doctors would be analogous to the system of obligatory military service for a certain period which exists for all young men in several European countries.
5.5. A remarkable feature of the public health system in Kerala is the blending of different systems of medicine, of Ayurveda with the Allopathic system. This can play an important role in overcoming the shortage of doctors. The Ayurvedic system however has to be streamlined, with systematic professional research instead of the inspired individual research of a few gifted practitioners. Since a strengthening of the Ayurvedic system will have positive “externalities” in sectors like tourism and social forestry, government funding of such research would be well justified.
VI TOURISM
6.1. The tourism sector has been seen as a potential area of significant employment generation in the state. But the promotion of tourism is not without significant costs: cultural clashes between the tourists and the local people, possible rackets involving sex and drug trafficking, possible environmental damage, and the increase in litter and pollutants. The concept of “sustainable tourism” has been advanced in this context as the desirable objective of policy. There can be no two opinions on this, as also on the need to ensure the safety and security of women employed in this sector. While this sector can provide significant employment opportunities for educated women, their particular vulnerability while engaged in this sector must not be lost sight of.
6.2. A positive feature of the tourism industry in Kerala has been the growth of health tourism. “Niche tourism” such as “health tourism” or “eco-tourism” avoids some of the adverse effects of general tourism, is more easily absorbable by society, and is associated with positive “externalities”, since it also involves the development of health-centres, research into traditional medicinal systems, or the protection of environment, all of which benefit the local population as well. Given the state’s rich heritage and environment, such niche tourism provides tremendous opportunities.
6.3. In the current situation when
6.4. In short, investment in this sector has to be stepped up; and, since such investment depends upon the complementary development of physical infrastructure, the state government will have to step up its outlays in the relevant areas. All this however requires a careful handling of the potentially explosive issue of land acquisition.
VII INDUSTRY, INFORMATION TECHNOLOGY AND LAND USE
7.1. The role of industry is crucial for addressing the question of educated unemployment. Our approach in the sphere of industry is that while the state may have to engage directly in certain industrial projects, it has to make room for private investment through the creation of adequate infrastructure and an appropriate investment climate. In the IT sector too, where, it is generally recognized, Kerala has a significant comparative advantage, room will have to be made for substantial inflows of private investment, with the government playing a supporting and monitoring role, and preventing any constriction of competition in the sector, through a nurturing of small and medium enterprises. And the same is true of the bio-technology sector, which, given the rich bio-diversity of the state, its system of traditional medicine, and its comparative academic strength in disciplines like Chemistry and Biology, offers great prospects.
7.2. An important issue in the context of
industrialization, and also in the context of the setting up of Special
Economic Zones, of the development of infrastructure and of the construction
and real estate business, is the issue of land acquisition. This is emerging
today as the central issue before development policy, not just in
7.3. A firm conceptual distinction must first be drawn between land needed for productive enterprise and land demanded for property speculation. This is a distinction often difficult to draw in practice, not just because the motives of the investors are not clear, but because the motives are themselves mixed. Those setting up productive enterprises also in practice wish to acquire some additional land close to their enterprises for future capital gains. The Special Economic Zones currently being set up all over the country for promoting entrepreneurship in the sphere of production are also seen by the same entrepreneurs as providing lucrative opportunities for land speculation. Not only are labour laws and trade union rights held in abeyance in such Zones, and not only are massive tax exemptions handed out to these “entrepreneurs”, but they are given opportunities for substantial capital gains on land. In fact the attractiveness of SEZs for them arises because of this combination of opportunities. But precisely because the distinction between land needed for productive enterprise and land needed for speculation is difficult to draw, it becomes all the more necessary to draw it. The basic rule must be: while land acquisition is admissible for the former, it is not for the latter.
7.4. Of course in addition to the needs of production and the demands of speculation there is a third category of demand for land, and that is for construction, housing, real estate (which must be distinguished from land speculation) and infrastructure (which sometimes is a euphemism for the real estate business). This demand too is difficult to distinguish in practice from productive demand on the one hand and speculative demand on the other. In the case of this demand, the rule will have to be a mixed one: land acquisition may or may not be admissible.
7.5. Three mechanisms have to be put in place to ensure that land is acquired for non-agricultural purposes only when it is absolutely necessary for the development of the state. First, whenever any proposal comes to the government, it should be made public and the government should invite applications from any other interested agents who may wish to offer a better, more competitive, or more attractive proposal. This ensures transparency and is an approximation to the system of tenders that used to be followed until bilateral deals became more prevalent than competitive bidding. Second, the government may take the best offer or put together a package by combining parts drawn from the different offers, or step in with its own ideas, including its own direct engagement, and begin negotiations on that basis. The government may even decide to acquire land for the project and keep it with itself, instead of handing it over to the private agents. Indeed the practice now being followed in Kerala, of the government itself acquiring land to set up Technology Parks or Special Economic Zones (where labour laws and trade union rights have to be respected), is a superior model to what is followed in some other states, since it cuts out land speculation. Third, once the project has been put together, it must go to a Standing Committee, with representation from the peasantry, from the political sphere, from legal and economics professions, and from the government, which would look at the project not in isolation but in its totality, including its possible impact on employment and food security, and either clear the project, or send it back to the government for further examination. The project deal can be signed only after all these stages have been cleared.
7.6. In all cases where land is taken from the peasants, there must be adequate compensation. In a state like Kerala where “land for land” (which the Supreme Court favours) may be difficult to fulfill, and “cash for land” may have to be paid instead, not only must the amount of cash be adequate, but the displaced peasants must be offered employment in the project. Where the nature of the project is such that employment cannot be offered (e.g. the building of a highway), an additional compensation over and above the value of the land must be offered. The Standing Committee must satisfy itself that the compensation is adequate and that the arrangements for paying compensation are foolproof. This would ensure that the bright prospects for industrialization that exist in the state are not thwarted by social discord and unrest at peasant displacement.
7.7. Infrastructure development is an important pre-condition for industrial growth in the state, which naturally raises the question of the adequacy of resources with the state government. Several suggestions have been made in this context ranging from “public-private partnership” to external funding. But even before any of these are explored, the substantial amount of funds available from the central government under its various flagship programmes and other schemes must first be tapped. Much of these funds come in the form of grants; and much of these funds paradoxically goes abegging. This must stop. A state like Kerala facing fiscal strains cannot afford to let central government assistance lie idle.
7.8. A very important source of funds for infrastructure development in Kerala are the non-resident Keralites. Various schemes for tapping NRK funds for the development of the state have been discussed in the past, including the setting up of a bank. But even before such schemes fructify, the state government can directly tap NRK funds through joint ventures for infrastructure development. Two fears are typically raised in this context: first, in all such cases since the projects have to be commercially viable, user charges will have to go up, which will exclude the poor; and secondly since infrastructure projects involve high risks, in the event of commercial unviability, they will become mill-stones around the government’s neck.. These fears, however, will not be pertinent if the infrastructure projects in question are those needed by industry and IT, and not those needed for collective consumption; the “exclusion of the poor” argument will then cease to be relevant. And as for commercial viability, this can be ensured through a careful prior selection of the projects, and through an appropriate policy of charging rent for infrastructure facilities by the government. Besides, if some projects can be financed this way, then others, catering to collective consumption, can be more easily financed from the budgetary resources.
7.9. A key area of infrastructure is the power sector. The power sector plan has usually been treated as a separate component of the state plan which is the responsibility of the Kerala State Electricity Board and which has simply been added on to the rest of the plan. In the process however sufficient attention has not been paid to a range of options, such as small hydro power projects and bio-mass- based power generation. The entire non-conventional energy sector needs closer examination and integration in the overall plan.
7.10. There are a large number of public enterprises in the state, a substantial proportion of which are making losses. There has been a turnaround in the case of some enterprises of late, but the overall situation continues to be one of loss-making. While the view that loss-making enterprises are ipso facto inefficient or constitute an economic mill-stone around the state’s neck, is erroneous, the state exchequer, already under strain, cannot stand such losses for ever. But the common panacea of simply closing down or privatizing these enterprises constitutes no real solution. While closure entails a drain on the exchequer, in addition to obvious social costs, privatization suffers from the fact that the private interests will be more concerned with making capital gains on the land than in running the enterprises. What is necessary is a restructuring of these enterprises on a case-by-case basis. Packages have to be worked out for each enterprise, and appropriate financial and managerial inputs arranged.
7.11. Discussions of industrialization in Kerala often ignore two areas. The first is rural industrialization of the non-traditional kind, whose potential has been demonstrated by the Township and Village Enterprises of China. With the strong LSGI structure in place in the state, and with local level banks having substantial funds to lend, with the availability of experts at the local level, there is no reason why Kerala should not be able to develop such enterprises. Marketing no doubt will have to be arranged, and with no great scope for the setting up of ancillary units of large factories, this will be a challenge. Likewise, managerial skills will have to be acquired, but there is no reason why LSGIs should not explore possibilities of setting up such units, or of encouraging potential entrepreneurs, singly or through coming together in co-operatives, to set up such units, whose ownership and risk-sharing patterns can take diverse forms.
7.12. The second area, not strictly confined to
industrial activities, relates to self-employment. The argument that Keralites
lack entrepreneurial talent is at best a tautology, a proposition for
which there is no independent evidence other than the very conclusion drawn
from it. Similar propositions used to be advanced about the Chinese until
Kerala has to move forward along this path instead of following the “Waiting-for-the-MNCs” and “Waiting-for-the-Corporates” path that has become fashionable in other states.
VIII TRADITIONAL
ACTIVITIES
8.1 The bulk of the industrial workers in the state are employed in the traditional industries, among which coir, cashew, handloom and beedi-making are the most prominent ones. Trade union struggles on behalf of factory-workers in traditional industries in the earlier years gave rise to substantial informalization of production. A co-operative sector came up which, with government assistance, sought to combine some minimum living conditions for the workers with viability in the market. The adoption of liberalization measures, leading to a curtailment of State support for the co-operatives, has once again created a serious crisis in the traditional industries. Paradoxically, the condition of the workers has remained abysmal as much in sectors with declining or stagnant demand as in sectors experiencing booming demand.
8.2. For reasons discussed earlier, State support and protection is essential for this sector. The absence of such support will affect thousands of workers, mostly women workers who constitute the main work-force in this sector. The “cluster approach” which the central government has been advocating for this sector, must be treated with great caution: it can in practice even damage this sector. This is because in so far as “clusters” are being promoted not in addition to the earlier pattern of assistance but in lieu of it, financing such “clusters” entails a curtailment of assistance to units outside of the “clusters”. Since traditional industries are typically dispersed because they constitute secondary occupations, this partiality for “clusters” is fraught with serious consequences. What is more, promotion of “clusters” has become a way of curtailing total assistance to this sector as a whole, and targeting such reduced outlays only to the “clusters”, which is even more damaging. Assistance to “clusters” over and above assistance to dispersed units would be a diffeent thing, but even in such a case, clusters alone will not help unless co-operatives are revived and strengthened with government support. Co-operatives can also be the means of bringing about technological up-gradation and product diversification. In the handloom sector for instance the co-operatives must explore ways of tapping the high-value end of the market through appropriate design changes. The state government must assist co-operatives in such efforts. The regulation of conditions of work in the informal sector will also improve the viability of co-operatives; by doing so the state government would in fact be achieving multiple goals.
8.3. A strengthening of the positions of co-operatives in the industry does not preclude distress for the producers of the primary commodities. The existence of middlemen can be a source of such distress; and even the co-operatives themselves would not be averse to making profits at the expense of the primary producers. This must be avoided through appropriate policy measures. To the extent that the growers themselves get organized into co-operatives, their bargaining strength improves; and to the extent that the middlemen are eliminated, viability of the industry can be reconciled with remunerative prices for the growers. Our approach to the eleventh plan which emphasizes a pervasive strengthening the co-operative institutions, aims precisely to reconcile such divergent objectives.
8.4. One traditional activity which is currently facing serious difficulties is fisheries. This is because the cost of fishing has been escalating rapidly. There are two reasons for this: first, increasing competition for limited fish resources has led to a situation of “overcapitalization” of the fisheries sector: bigger boats, more powerful engines, and larger nets, all of which raise the fixed cost per unit output; secondly, there has been a rise in the price of fuel which has raised prime costs per unit output to a point where the activity has become virtually unviable. Indeed for the fisheries sector as a whole, the net value added has become negative.The central government which has decreed several rounds of petro-product price hikes in rapid succession, puts the blame for these hikes on the increase in the world oil prices, and asks the state government to subsidize this sector to make it viable. This would mean in effect however that the state exchequer, which, according to the central government itself, is “debt-stressed”, would be making a transfer to the central exchequer via such a subsidy. A substantial part, more than half, of the prices of petro-products, however, are made up of taxes, the bulk of which accrue to the central exchequer. Petro-product prices need not be hiked if the central government could absorb the rise in import costs, and use other instruments which are under its control, such as the long-term capital gains tax or the service tax (through better collection), for making good its revenue loss. But this has not happened. While another major problem faced by the fisher-folk, namely the fury of the sea, is being sought to be tackled, a solution will have to be found through negotiations with the central government to the problem of rising input costs for them. In addition, the problem of intensified competition for limited fish resources has to be tackled through aquarian reforms that would restrict the ownership of fishing vessels to the actual fisherfolk, strengthen the traditional community regulation mechanisms wherever possible, and give the right of first sale on the shore to the fisherfolk themselves. And the opportunities for deep sea fishing have to be tapped.
IX DECENTRALIZED PLANNING
9.1. Kerala’s unique experiment in democratic decentralization involved the transfer of around a third of the plan funds to the Local Self-Governing Institutions during the ninth plan period. This was given a statutory basis by the second State Finance Commission. During the tenth plan when the fiscal problems faced by the state led to a curtailment in the plan outlay compared to what was envisaged, the proportion of plan funds transferred to the LSGIs also went down. In the eleventh plan which envisages a step-up of plan outlays, the proportion of plan funds transferred to the LSGIs should also show an increase. What is more, starting with this plan, the district level plans of the LSGIs will be fully worked out and shown separately along with the state plan document.
9.2. Decentralized planning, pioneered by Kerala, marks a point of departure for the country as a whole. It has made the composition of plan projects much more attuned to the wishes of the people. And even though it may not have noticeably brought down the level of corruption compared to the earlier years, it has perhaps had a marginally favourable impact. These are major achievements. At the same time however serious lacunae remain in the functioning of decentralized planning. One is the lack of submission of proper accounts in time. The second is the tendency of the LSGIs to simply replicate small local projects. The vigour of decentralized planning should show itself in imaginative schemes where more than one panchayat come together to implement supra-panchayat level projects. In such a case there would be a plethora of schemes, local schemes, supra-local schemes, and even more ambitious schemes, all planned from below. This unfortunately has not yet happened. The LSGIs therefore have remained essentially as users of funds devolved from the state government, rather than planners in their own right. According to their own perception they remain objects of state government largesse rather than subjects of their own destiny. This state of affairs must change if democratic decentralization is to live up to the original dream underlying its inception.
9.3. At the administrative level, two issues in particular need to be addressed urgently. One relates to greater integration between the LSGIs and the institutions transferred to their jurisdiction. The current level of integration is woefully inadequate. The second concerns the link between the sectoral plans drawn up for the state as a whole and the district plans drawn up by the LSGIs. These district plans themselves should be more than a mere aggregation of an arbitrary set of pancahyat plans. But in addition there is need for dovetailing the district plans with the overall state plan.
X THE EXCLUDED AND THE DEPRIVED
10.1 Even though the position of women in Kerala has improved dramatically according to “conventional” indicators such as health status, literacy, education, and life expectancy, and is even comparable to advanced countries, there has been no corresponding improvement in their social and economic status. This is most evident in their abysmally low and declining work participation rate (16 percent in 2001). The declining work participation rate of women, it is often argued, is reflective of an improvement in the economic position of the family as a whole, because of which women drop out of the work force. But this is precisely what constitutes proof of the fact that their economic status has not improved.
10.2. A contributory factor towards this has been the absence of job opportunities of the sort that educated women would prefer. This was discussed above and the suggestion made that the eleventh plan must aim to bring about a considerable increase in the number of skill-imparting institutions in the state. The Kudumbasree experiment involving poor women organized in self-help groups has not only been a remarkable success, but has also brought to the fore the enormous managerial and entrepreneurial talent that remains untapped. A similar experiment in bringing together educated women, currently engaged in household chores, into neighbourhood groups for producing a number of services, offers a potential source of gainful employment for them. While this would add to their work-burden, and would not necessarily break the gender division of labour, it would nonetheless go someway towards their economic empowerment.
10.3. More generally, gender inequities which operate in “non-conventional” ways in Kerala need to be addressed. The eleventh plan will place considerable emphasis on gender auditing/ budgeting of major development policies and programmes. Gender auditing is concerned with the assessment of the gender impact of policies and programmes not just in technical terms but also in terms of overcoming the personal and institutional biases in the culture of the relevant organizations which hinder the achievement of gender equality objectives.
10.4. While the proportion of SCs and STs in Kerala’s population is lower than for the country as a whole, this fact has made no difference to their status of being among the poorest in the state. Over and above their normal state of poverty they have been among the worst victims of the agrarian crisis in the state. Wyanad district, the worst hit by the crisis, is the home to the largest number of tribal people in the state, who, notwithstanding the supposed tightness in the labour market in the state as a whole, go across to neighbouring Karnataka to work for a wage rate well below Kerala’s minimum wage.
10.5. While the different components of the decentralization package such as the Women’s Component Plan, the Scheduled Castes Plan, and the Tribal Sub Plan have been targeted towards these excluded and deprived groups, they are clearly yet to make a significant impact. As far as the poor are concerned, the Employment Guarantee Scheme should make a substantial difference, particularly because those working under the scheme will get the minimum wage rate of Rs.125 per day. There has been a pervasive attempt all over the country to substitute piece work rates in order to improve “work efficiency”. Care must be taken in implementing the scheme in Kerala to ensure that there is no de facto pushing down of wages below the minimum rate for the state via this piece rate route. The state government’s decision to give ownership rights to the tribal population cultivating forest land should also cause significant improvement in the conditions of the beneficiaries. In addition however, both they, as well as others who live on non-forest land but in proximity to forests, must be given rights to forest produce
XI CONCLUDING OBSERVATIONS
11.1. The basic thrust of our approach to the eleventh plan, to recapitulate, is as follows: the state must protect and support peasant production and traditional industries, which are currently facing crisis, in partnership with revamped or newly-formed co-operative institutions, which can be the means of introducing technological up-gradation and value-addition. It must undertake significant outlays in the social sector and in skill-imparting activities, for the generation of educated employment. It must create a conducive atmosphere for private investment in industry and IT sectors, not by unrolling a red carpet indiscriminately for any project that comes its way, but by ensuring that such investment is not followed by social strife; and this requires a careful monitoring of land use and of the compensation paid to those who lose land. It must ensure that all sources of funds from the central government, under schemes like the JNNURM and the NREGS, are fully utilized for building up infrastructure in the state. If this is done, then with a “minimal variant” plan outlay of Rs.35000 crores at 2006-07 prices during the eleventh plan, the state should make considerable progress benefiting all.
11.2. A major hurdle to progress is the quality of plan administration and plan implementation. Administrative delays, duplications of projects and schemes, the insertion of ever increasing numbers of layers between the initial spending authority and the ultimate beneficiary, an insatiable demand for quite avoidable “studies” and “training programmes” before the launching of any public project, and a perpetual tendency to re-package existing schemes into more and more apparently novel innovations which only creates confusion all around, constitute formidable obstacles to any meaningful planning. This to be sure is not a problem of Kerala; it afflicts the country as whole. A way out of it must be found if planning is to serve its basic objective. The need for carrying out reforms in the administrative system to make it serve the people better cannot be over-emphasized.