Kerala’s achievements in education, healthcare, social welfare and human development have been recognised as a model both within India and abroad. Yet, despite these accomplishments, the state is going through serious financial difficulties.
Rising public debt, increasing expenditure on welfare schemes and the government’s narrowing options for generating additional revenue are limiting investment in infrastructure development and future growth.
This is one of the great contradictions confronting Kerala. A state that leads in social development is struggling because it lacks the financial capacity required to pursue its own development ambitions.
To overcome this challenge, Kerala must find new ways to create wealth without imposing more taxes or resorting to excessive borrowing.
Land is one of Kerala’s most valuable resources. Fertile soil, abundant rainfall, an extensive coastline and tourism potential make land one of the state’s most important economic assets.
More importantly, landownership in Kerala is distributed across different sections of society. Increasing the productivity of land can therefore spread wealth across society instead of concentrating it in the hands of a few.
However, a considerable extent of land in the state remains economically underutilised. The problem is not a lack of resources. It is the inability to use the available resources productively.
Numerous legal and administrative regulations introduced over the years have restricted the productive use of land.
Environmental protection is essential. However, the present system often causes lengthy delays in obtaining approvals. Complying with the regulations can also involve substantial expenditure.
As a result, many landowners are unable to use their property economically. Land that should support investment, employment creation and higher government revenue remains trapped in procedural complexities.
Kerala needs to adopt a balanced approach that accommodates both environmental protection and economic development.
The state government should introduce a comprehensive Kerala Land Wealth Mission to awaken the potential that currently lies dormant.
The mission should aim to convert underused land into productive economic assets by simplifying regulations, ensuring public participation and promoting sustainable development practices.
Its purpose should not be to encourage uncontrolled construction. Instead, it should facilitate the responsible and environmentally sustainable use of land.
Such an approach can transform land from a passive asset into an active driver of economic growth.
A system that allows landowners to undertake land-use conversion themselves should be the cornerstone of the proposed mission.
The existing process involves numerous procedural complications. Instead, landowners could be permitted to change the use of their property through a transparent and time-bound process by submitting the required documents and paying a prescribed fee.
The relevant land records could then be updated within a specified period.
Such a mechanism would reduce procedural delays, remove uncertainty and encourage lawful investment. Necessary safeguards and regulatory controls could still be retained.
Development need not be placed under severe restrictions in the name of environmental protection.
Only a nominal fee should be charged for converting land for green activities such as horticulture, the commercial cultivation of fruits, coconut plantations and agroforestry. Other incentives should also be provided for these activities.
This would encourage land to be used productively, generating economic prosperity while also protecting the environment. Environmental protection is most effective when it is economically beneficial as well.
Kerala’s plantation sector is another area that holds considerable potential for economic growth.
Many of the state’s large plantation properties are no longer economically viable. However, outdated laws and restrictions prevent them from exploring new opportunities.
A Plantation Land Renewal Policy could provide a solution.
Subject to strict safeguards and clearly defined criteria, such a policy could allow plantation land to diversify into new activities, including eco-tourism, agro-processing clusters, horticulture parks, rural enterprise zones and skill-development campuses.
These reforms could attract private investment, generate new employment opportunities and revive sectors that are currently facing economic stagnation.
One of the most significant features of the proposed Land Wealth Mission is its fiscal potential.
Governments have traditionally attempted to raise revenue by increasing taxes. Bringing land into productive use, however, could generate considerable additional revenue for the state through land-conversion fees, registration charges, tourism-related income, environmental compliance fees and the broader economic growth created by private investment.
In other words, Kerala can increase revenue not by imposing more taxes, but by generating more economic activity.
The benefits of productive land use would not be limited to the real estate sector.
It could stimulate activity across construction, tourism, hospitality, logistics, small businesses and agro-processing. New employment opportunities could be created in every district of Kerala.
Domestic demand would rise, and economic activity at the local level would become more vibrant. Every acre of land brought into productive use could begin generating economic value across multiple levels.
Unlike many economic reforms that primarily benefit large corporations, land reforms in Kerala could directly benefit ordinary families.
Since landownership is widely distributed in the state, an increase in land values could raise household asset values, encourage rural investment and strengthen local communities. The prosperity generated could consequently spread across different sections of society.
According to preliminary estimates, if Kerala brings even 3 to 5 per cent of the land that is currently underutilised into productive use, the state could attract private investment of between ₹50,000 crore and ₹80,000 crore over the next 10 years.
It could also generate between ₹12,000 crore and ₹18,000 crore in additional government revenue through land-conversion fees, registration charges, tourism income and related commercial activities.
Very few policy reforms offer such strong potential to increase investment, create employment and improve government finances without imposing additional taxes on citizens.
Kerala does not lack resources. What it lacks are systems capable of unlocking their potential.
A properly designed Land Wealth Mission could transform underused land into a powerful engine of economic growth. It could create employment, improve the state’s finances and enable all sections of society to achieve greater prosperity.
The wealth Kerala is searching for may not lie elsewhere at all. It may be hidden in its own soil.
The author is a chartered accountant and President of the Thrissur chapter of the All India Professionals Congress. He is a former President of the Thrissur Management Association and former Chairman of Maben Nidhi Limited.
(This article appeared in the 15 July 2026 issue of Dhanam magazine.)
