PLANTATION SECTOR AND TERTIARY SECTOR DEVELOPMENT

PLANTATION SECTOR AND TERTIARY SECTOR DEVELOPMENT

CHAPTER - VlI PLANTATION SECTOR AND TERTIARY SECTOR DEVELOPMENT With the backdrop of the relationship between plantation and commodity producing sectors, the present chapter seeks to examine the relationship between plantation sector and tertiary sector development. The tertiary sector includes social and economic infrastructure like education, health, banking, transport and communications. lnfrastructural development exercises a very strong influence on the level of economic development of regions (Ajit Kumar 1999). While development of infrastructural facilities creates conditions for accelerated econonilc development on the one hand, the rap~d economic development calls for and provides stimulus for investment in building up of the needed social and economic overhead capital on the other (Joshi, 1990). In order to get a comprehensive picture of the developnient of tertiary sector in the economy, a few key indicators relating to the various sub sectorseducation, health, banking, transport and communications have been chosen. Social indicators like education and health are direct and partial measures of well- being in a society (Herrick and Kindleberger, 1983). It is the human resources of a nation, not its capital or its material means that ultimately determine the character and pace of its economic and social development (Todaro, 1989).

Education and health by improving the quality of hunian resources accelerates the process of economic growth. The emergence and growth of financial institutions like commercial banks and development banks make available the needed funds to support agricultural, industrial and commercial activities. The development of transport and comn~unications is cons~dered as a pre- condition for economic development. The present chapter is divided into two sections. The first section traces the development of the tertiary sector before state formation. In the second section tertiary sector development after state formation is analyzed with the help of the statistical technique 'Principal Component Analysis.' Finally, an attempt is made to find out the relationship between plantation sector and tertiary sector development. Tertiary Sector Development- Before State Formation The present section that analyses the development of tertiary sector before state formation is purely historical in nature. The fragmentary evidences available in the spheres of education, health, banking, trade and transport are compiled to get an overview of tertiary sector development. Studies relating to individual sectors have shown that wide inter- regional differences in growth patterns

existed before the formation of Kerala state. Travancore and Cochin - the two princely states were pushed far ahead of the Malabar region which was directly under British rule. The marked dynamism in the educational sphere of Travancore and Cochin witnessed at the turn of the 201h century, can be attributed partly to the progressive policies followed by the respective governments and partly to the large scale economic expansion resulting from the commercialization of agriculture. On the supply side the state not only took initiative in starting schools but also encouraged private participation by allowing liberal grants -- in - aid. The Christian missionaries took advantage of the s~tuation and started several schools that gave the required fillip to educational development (Kuttikrishnan, 1994). On the demand side, the scope and spread of commercial agriculture and the resultant growth of trade and commerce had a positive impact on the spread of education (Tharakan, 1984). Basic education was needed for computing accounts and maintaining records. At the turn of the century, Cochin and Travancore held the first and second positions in the order of literacy among states and provinces in India (Nagam Aiya, 1906). The literacy rates in Travancore, Cochin and Malabar for the period 1901 to 1951 are given in Table 7.1.The figures given in the table reveal that the district of Malabar was not at par with the states of Travancore and Cochin in educational progress. The literacy rates

among men and women were comparatively higher in Travancore- Cochin states during the period 1901-195 1. I Malabar I Cannanore 20 lkozh~kode 119 Pakhat 117 Coch~n j Trichur 22 Table 7.1: Literacy Rates in Travancore, Coehin and Malabar 1901-1951 The factors, which had a cushioning effect on the spread of literacy in the two native states, were not present in the district of Malabar. 1901 / 1911 1931 Men Women1 Men Women1 Me11 I I 4, 32 3 4 3 25 22 21 4 27 4 24 I 7 / 45 6 42 Women 1951 Men Women 5 28 22 59 39 1 Eakuam 24 5 25 IX 65. / Travancore 1 iko(tayam / 32 5 35 X 48 24 71 4 31 7 48 I3 1 73 1 51 1 1 Tr~vandrum 23 1 1 1: 1 :: 1 1; 1 :i 1 :i 1 Source: P.R Gopinathan Nair (1981), 'Primary Education, Population Growth and Socio-Economic change - A comparative study w~th particular reference to Kerala'. Allled Publishers Private Lim~ted, Neb Delhi. The oppressive system of land relations and the consequent poverty and misery of the agrarian population stalled educational progress. The commercialization of agriculture lacked momentum and was not instrumental in creating an effective demand for education. On the supply side, the colonial government took an indifferent attitude towards educational development. X 6 7 53 48 40 28 20 22 Since the government was able to recruit employees from the rest of the big Madras Presidency, there was no urge to start schools in Malabar district to train young men for the public service (Krishna Ayyar,

1966). The education of the people was left to private effort with financial aid from the government (Krishna Swami Ayyar, 1933). When compared to Travancore, the role played by Christian missionaries in the field of education was very limited in Malabar. Though Malabar did not have, a comparable level of literacy with that of Travancore- Cochin states, it still had a clear edge over niost other districts of the southern presidency of Madras (Tharakan, 1984). The district occupied the foremost position in the presidency in point of literacy among its people of both sexes. In female education, both elementary and secondary, Malabar takes the highest place (Krishna Swami Ayyar, 1933). Although, the colonial government took an inactive role initially in the spread of education. in later years, the government began to bestow good deal ol'attention in starting schools. This will be clear from the total government expenditure on schools, which increased from Rs. 4,43,854 to Rs. 43,95,51 1 during the period 1902-03 to 1930-31(Malabar District, Statistical Appendix 1905, 1933). The particulars of educational institutions in Travancore- Cochin states and in Malabar district for the year 1955-56 are given in Table 7.2. The figures presented in the table clearly indicate the formidable position enjoyed by Travancore- Cochin region with regard to educational progress. Among the different types of educational institutions, with the exception of schools for special education, in all other types Travancore- Cochin state stood high both in number of institutions and student strength.

The figures indicate the impressive network of formal education system existing in Travancore- Cochin states at the time of state formation. Table 7.2: School Education in Travancore - Cochin and Malabar Regions 1955-1956 -- i Travancore-Cochln i Tvne of Institution 1 Noof 1 No. or, Schools for spec~al educat~on 1 91-5377 ' School for Professional Education 1 341 20001 Source: Basic Statistics, Kerala, 1958 14029 1 31 5149 Total 1 6245 1 1993087 1 4392 1 779324--. Education and health being conlplenlentary, the contrasting development in education in Travancore and Malabar, had its reflection in the sphere of health also. The Travancorean government has pursued certain progressive policies in the field of education, which contributed directly, or indirectly to the improvement in health status (Krishnan and Kabir 1992, Panicker and Soman, 1984). By the beginning of the second decade of the 20' century, health became socially accessible to all castes and classes in Travancore, while in Malabar this was achieved only after independence. (Krishnan and Kabir, 1992) The demand for health facilities, in Travancore, came up from those sections of the population who were economically strengthened by the commercialization of the economy (Tharakan, 1999, Panickar and

Soman, 1984). Malabar although acquainted with western health care system from the beginning of the 19"' century, failed to keep pace with the health care expansion that was taking place in Travancore and Cochin. In Malabar, vaccination against small pox was introduced in 1801, and the first public hospital was opened at Kozhikode in 1845. In Travancore, on the other hand. though vacc~nation was introduced only in 1812, three charity dispensaries had come into existence at Thiruvananthapuram by 1819 and in I836 Swathi Thirunal established a charity lying in hospital also (Krishna Ayyar, 1966). The data presented in Table 7.3 reflects the substantial differences in health care expansion between Travancore- Cochin and Malabar region at the time of the formation of the Kerala state. The number of medical institutions and number of beds under allopathy has been comparatively higher in the districts belonging to the former Travancore- Cochin states. Apparently, Malabar was lagging behind these native states in health care expansion. Table 7.3: District-wise Number of Medical Institutions (Allopathy) in Kannur 30 60 1 Kerala 363 11959 Source: Statistics since Independence, 1998, Department of Economics and Statist~cs, Government of Kerala.

The intra- regional differences in development before the formation of the state were not restricted to education and health. The overall economic development created favourable conditions to the growth of trading activity which provided the stimulus for the change over from indigenous credit institutions to modern banking (Varghese, 1970, Oommen, 1976, Tharakan, 1999). Trade demanded banking services; at the same time it provided the necessary resources for the growth of banks. The bulk of the advances of the banks were utilized for financing agricultural and non- agricultural trading activity. According to the report of the Travancore-Cochin Banking Enquiry Commission (1956) the amounts advanced to finance trade formed 40.7% of the total advances as against 23.7% for industry, 19.1% for personal purposes and 6.9% for agricultural operations. These banks advanced credit on the basis of land offered as security and this was used to purchase more land, develop remunerative crops and extend trading and processing of agricultural products (Tharakan, 1999). The exports from Travancore constituted various agricultural products namely coconut, tea, coffee, rubber, ginger, pepper, cardamom, etc. During the period 1870-71 to 1938-39, the total value of exports of Travancore increased from Rs. 65.7 lakhs to Rs. 958 lakhs and the value of imports from Rs. 52.1 lakhs to Rs. 763.21akhs. The spurt in the banking activity can be partially attributed to the boom in trading activity (Report of the Travancore- Cochin Banking Enquiry

Commission, 1956, Oommen, 1976). The syrian christians, an important planter- cum- trading class of Travancore, who had experience in running chit funds, were the pioneers of joint- stock banks in Travancore (Oommen, 1976). The earliest bank to be established in the area was the Travancore Bank, Ltd, at Thiruvella by about 1900 (Report of the Travancore- Cochin Banking Enquiry Commission, 1956). A noteworthy feature of banking development in the Travancore- Cochin state is the spread - out of banks in rural area. Centres of commercial agriculture became centres of banking which expanded rapidly as a result of sharp increase in prices of commercial crops and the consequent increase in farmer's income. The prosperity of the existing banking institutions spurred new people to promote fresh ones, which culminated in a cun~ulative growth of banks. The number of banks in Travancore ~ncreased from 5 in 1917-18 to 274 by 1932-33. The total paid - up capital of commercial banks in 1928-29 was around Rs. 42.51akhs. According to the Travancore- Cochin Banking Enquiry Committee Report of 1956, about 235 bank branches were opened during the period 1941 to 1947. In Cochin also there was a big rise in the number of banking institutions from 1920's (Varghese, 1970). The first joint- stock commercial bank in Cochin was started in 1914, much later than in Travancore. As distinct from Travancore, most of the banking institutions originated in the predominantly commercial coastal area

of Cochin rather than in agrarian-or~ented rural area. Thrissur, which grew into a large trading and commercial centre, and the port towns of Cochin and Ernakulam called for banking services (Oommen, 1976). The number of banks rose from 5 in 1917-18 to 167 in 1932-33. The passing of the Royal Proclamation in 1932 by the then government of Cochin State imposed restrictions on the floatation of banks. Consequently, the number of banks went down from 155 in 1936-37 to 82 in 1943-44 and to 68 in 1955 (Report of the Travancore- Cochin Banking Enquiry Commission, 1956). Malabar region did not share many of the development features of the growth of banking in Travancore -Cochin states. Kuries, similar to chitties in Travancore were the indigenous form of banking in Malabar (Oommen, 1976, Varghese, 1970). The first joint stock bank of Kerala, the Nedungadi Bank was opened at Calicut in Malabar in 1899 (Oommen, 1976). The District Central Co- operative Bank was started in 1917-18 and became the chief financing bank (Innes, 1951). The trading activity in Malabar was not buoyant enough to provide stimulus to banking activity. Taking the first three decades of the 20Ih C. as a whole, the annual rate of growth of trade in Travancore was 6.6 per cent while Malabar recorded an annual increase of 3.7 percent only (Ibrahim, 1976). In Travancore a clear linkage existed between banking and plantation agriculture (Tharakan, 1999). The low degree of commercialization

of agriculture prevalent in Malabar did not act as an impetus to the growth of banks. The Travancore region, which was the centre of greater development of banking facilities, was also developed in the sphere of transport. The commercialization of agriculture and the resultant increase in the volume of trade has played an acti1.e role in the emergence of a well- developed transport network in Travancore (Ibrahim, 1976). The transport sector began to show signs of development when British capital entered the plantation sector. on a massive scale, during the latter half of the 20Ih century. The spread of plantations in remote area necessitated the construction of roads to facilitate the movement of men and materials from the plantation area to the trading centres. The rapid growth of road mileage will be evident from the fact that from a mere 52 miles in 1861 it rose suddenly to 900 miles in 1880 and further to 3000 miles by 1900 (Ibrahim, 1976). The state assisted the road building activities of the planters by setting up a public works Department mainly meant for the construction of roads (Kannan, 1988). It can be inferred that road development in Travancore was geared towards satisfying the interests of planters. In Cochin, the spread of commercial agriculture boosted internal production and trade, which necessitated more transportation and communication facilities. In response to this demand, transportation facilities steadily improved in the region.

In Malabar, the degree of commercialization of agriculture was less when compared to Travancore - Cochin area. Hence the economic forces, which were instrumental in transportation development in the two princely states, were absent in Malabar. The development of road transport in Malabar seems to have been influenced by military and law and order considerations rather than by economic forces (Ibrahim, 1976). Tipu, the pioneer of the roads in Malabar projected and in a great part finished an extensive chain of roads that connected all the principal places in Malabar (Logan, 1887). The road- rail density in Travancore, Cochin and Malabar are presented in Table 7.4 for the period 1900-01 to 1945-46. The data given in the table indicate that during the first half of the 20"' century, Travancore retained its lead in transport development. In Cochin, road density was steadily increasing while in Malabar; road density remained more or less stagnant. In the year 1949-50, there were 4541 miles of main roads and 1218 miles of village roads in Ttavancore- Cochin region (Statistics since Independence, 1998) while Malabar had only 1776 miles of main roads and 448 miles of village roads (Census Hand book, Malabar District, 195 I). The data reflects the comparatively greater availability of transport facilities in Travancore and Cochin states.

The development in transport facilities was an important factor that actuated the process of urbanization in Kerala in the latter half of the 19'~ century (Sreekumar, 1993). Significant regional differences existed in the pattern of urban growth between Travancore, Cochin and Malabar. The degree of urbanization in the three regions during the time period 1881 to 1941 is given in Table7.5. It can be observed that the proportion of urban to total population was comparatively higher in Cochin all throughout the time period. At the turn of the century, Travancore and Malabar had more or less the same proportion of population in urban area, in fact it was even slightly higher in Malabar. But within two decades, the rate of urban growth in Malabar slowed down and finally became lower than in Travancore.

r Table 7.5: Degree of Urbanisation in Travancore, Cochin and Malabar 1 Year Travancore Cochin Malabar 1881 4.4 10.6 7.7 1 1891 3.6 10.2 1901 6.2 10.8 1911 6.2 12.0 1921 10.0 13.0 1931 10.8 17.1 1941 11.4 18.2 7.4 7.8-8.0 A) 7.6 1 7.7 1 NA 1 Source: Sreekumar. T.T. (1993), 'Urban Process in Kerala 1900-1981'. CDS, Thiruvananthapuram Ibrahim P. (1976), 'The Development of transport Facilities in Kerala: A Historical Review', Social Scientist, Vol.VI, No.8, March, 7. A review of the infrastmctural facilities in Kerala before state for~iiation reveals wide inter-regional differences in growth patterns. In all the sectors- education, health, banking and transport- Travancore and Cochin, which comprised the southern and central regions of the state were far ahead of Malabar in the north. The forgoing analysis reveals that differences in the administrative set up of the two regions and commercialization of agriculture were the two important factors, which contributed to regional disparities in development. In the following section, an attempt is made to find out whether inter- regional differences in tertiary sector development exist in Kerala even after state formation. The role of commercialization of agriculture in bringing about regional differentials in development is also examined.

Section - I1 Tertiary Sector Development - After State Formation In Kerala, during the time period 1970-71 to 2000-01, the share contribution of tertiary sector to SDP increased from 31.56 % to 50.64%. The percentage increase has been relatively more in the case of tertiary sector than in secondary sector. The district- wise data shows that this trend has been observed in all the districts, irrespective of the level of development. The share contribution of tertiary sector to NDP of districts increased to about 50 % by the year 2001 in all districts except Idukki and Wayanad. In these two districts the proportion contributed by tertiary sector remained below 30%. The structural change in the composition of national output witnessed at the all- India level was also in accordance with the theory of economic growth (Simon Kuznets. 1966). The share of tertiary sector in GDP increased from 32 % in 1970-71 to 46.6 in 1997-98. The relative proportion of work force engaged in tertiary sector increased from 26.57% to 33.80% during the period 1970-71 to 1990-91. The same trend was witnessed in almost all the districts of the state. In short, the productive sectors of the economy lagged behind the tertiary sector in providing employment to the growing labour force. A profile of tertiary sector development in Kerala is presented in Table 7.6.The Principal institutional factor for developing human skills and knowledge is the formal educational

system. As observed earlier, before independence, educational development in the state received a prominent place. In the postindependence period a liberal education programme continued to domulate the developmental programmes of the government in the state (Kuttikrishnan, 1994). According to 2001 census, Kerala achieved the highest literacy rate of 90.92 % among the states in lndia as compared to the ail lndia average of 65.38%. The educational expenditure in Kerala highlights the importance attached to education in the state. The total expenditure on education increased from Rs. 60 crores in 1970-71 to Rs. 2481 crores in 1999-2000. School education claims the larger share of total educational expenditure - 8 1%in 1999-2000. The data given in Table 7.6 reveals that number of schools for general education has more or less stagnated over the years. This is mainly due to the sharp decline in the student enrolment in schools. A steady increase in the number of arts and science colleges can be observed over the years. The technical education infrastructure witnessed tremendous expansion during the period 1997-2001. At present there are 44 engineering colleges and 56 polytechnics functioning in the state (Economic Review, 2001). Among the districts, in the year 2000-01, the number of schools per 100 sq, km. was the highest in Kozhikode followed by Alappuzha and Thiruvananthapuram. The indices with regard to number of schools per 10000 students show that among districts, Alappuzha stands first followed by Kottayam and Kannur. Ernakulam ranked first in the number of arts and science colleges per

100 sq.km followed by Kottayam and Thiruvanahtapuram. The indices of technical education shou that Alappuzha, Kottayan~ and Ernakulam are the districts that rank high, ldukki and Wayanad are the two districts, which are backward In terms of educational infrastructure. Table 7.6: Profile of Tertiary Sector Development 1970-71 to 2000-01 -- - X Yo, ot ~ned~crl ~nit~ll~t~ons iiiurrd~i~cr 1110 sq.km I O 91 1 30 1 I03! 2 114 L- -- 13 1 Lcnjll~ ofro;ld~ (I'WDI per 100sq knl 15 Wo ot rcglslered vsh~clcs per 100 sq hln --, I. ; sq kni I L!I NO. 0fD1saic1 co-op banks ptr I00 sq km Source: Economic Review (various years), State Planning Board, GOK. Thiruvananthapk~raln, Statistics for Planning (various years). Department of Econo~nlcs and Statistics, G.O.K. Thiruvananthapuram. Kerala has significant achievements in health front and the basic development indicators are almost comparable to that of developed countries (Economic Review, 2001). In the year 1998, the birth rate in Kerala was 18.2 as against 26.4 for all India. Infant nlortality rate in Kerala was 15.6 but the all India position is as high

as 71.6. A major factor that contributed to the present level of health development is the availability of vast health care infrastructural facilities. The infrastructure under allopathy, ayurveda and homeopathy are given in Table 7.6. It evidences the growth in health care institutions in Kerala. Among the districts, the number of medical institutions (allopathy) per 100 sq. km. was the highest for Alappuzha, Thiruvananthapuram and Ernakulam in the year 2000-01. ldukki and Wayanad were the districts, which ranked last in health development. In the field of transport, the length of PWD roads and the number of registered vehicles are taken as indicators of development. Kerala has a comfortable network of roads having a total length of 125835 km. as on March 31", 2001. All the villages in the state are well connected by roads. The tremendous increase in the number of vehicles is reflected in the data presented in Table 7.6. The total number of vehicles with valid registration increased to 21,11,885 in the year 2000-01 as against 86234 in the year 1970-71, registering a growth of 25 times. Of the fourteen districts in the state, Kottayam district accounted for the maximum road length followed by Emakulam and Thiruvananthapuram. ldukki and Wayanad had the lowest PWD road length in the year 2000-01. District-wise details of growth of motor vehicles in Kerala show highest vehicle population in Ernakulam followed by

Thiruvananthapuram and Kottayam. The number of vehicles was the least in Wayanad and ldukki. Telecommunication sector also registered significant development. The number of post offices functioning under Kerala circle increased from 4576 in 1980-81 to 5059 during 2000-01. Alappuzha ranked first in the number of post offices per 100 sq, km. Followed by Thiruvananthapuram and Kottayam. ldukki and Wayanad were the districts with least number of post offices in the year 2001. The total number of telephone exchanges increased from 649 in the year 1990-91 to 988 in the year 2000-02. On an average there were 56 telephones per sq. km, and 68 telephones per thousand population in the year 2000-01. Emakulam stood first in the number of telephone exchanges and equipped capacity in the state. Wayanad was the district having least number of telephone exchanges and equipped capacity. Kerala has an excellent banking infrastructure. The increase in the number of banks will be evident from the data given in Table 7.6. However the credit deposit ratio, which was 75.57 in 1970-71 steadily fell over the years, to 42.29 in 2000-01. The increase in bank deposits has been mainly due to remittances from Keralites working abroad and other parts of the country. As the data presented in the table shows there has been an increase in the number of Primary Agricultural Credit Societies and Primary Agricultural

Development Banks in the state. This is an indication of the expansion in institutional finance extended to the agricultural sector. Within Kerala, Emakulam has the largest number of branches followed by Thrissur and Thiruvananthapuram. Though Wayanad stood last in the mobilization of deposits and disbursement of loans, the district has a high credit reserve ratio along with Idukki. This can be attributed to the cash crop and plantation economy of the districts (Economic Review, 2001). Wayanad and ldukki were the districts, which were least, developed in banking infrastructure. Historically, commercial agriculture has resulted in a highly developed service sector in the state. This coupled with a developed transport system created the necessary conditions for the growth of tertiary sector in Kerala. The intensification of the process of commercialization and the increasing inflow of gulf remittances since mid 70's further accelerated employment in the tertiary sector. The rapid urbanization in Kerala is in tune with the growth of the tertiary sector. Kerala is experiencing tertiary sector led urbanization and not industrialization led urbanization as witnessed in developed countries (Retnaraj, 1994). Nature of Development and Disparity The method of Principal Component Analysis was used to analyze inter- temporal variations in tertiary sector development. The indicators selected for analysis reflects the general development

of the sector in terms of education, health, banking, transport and communications. The following indicators were selected for measuring tertiary sector development. (1) Number of schools for general education per 10000 students. (2) Number of Arts and Science Colleges per 100 sq. km. (3) Number of IT1 iitc per 100 sq. km. (4) Percentage of total literacy. (5) Number of allopathic institutions per 100 sq. km. (6) Number of beds in allopathic institution per I00 sq. km. (7) Number of comnlercial banks per I00 sq, km. (8) Number of Primary Agricultural Credit Societies per 100 sq. km. (9) Length of PWD roads per 100 sq. km. (10) Total number of registered vehicles per 100 sq. km. (I I) Number of Post offices per 100 sq. km. The characteristics of tertiary sector development can be explained with the help of extracted principal components. Two factors extracted explained 71.54%, 86.79%, 76.50 %and 84.16 % respectively of the total variations in tertiary sector development in each of the years 1970-71, 1980-81, 1990-91 and 2000-01. The specific characteristics of each factor can be identified with the help of factor loadings.

Tertiary Sector Development, 1970-71 In the year 1970-71, two factors, which account for 71.54'Y~ of the variations in tertiary sector development were extracted and retained in the analysis. The total variance explained and the factor loadings are given in Table 7.7 and Table 7.8 respectively. The first factor (FI) has high factor loadings with almost all the variables selected for analysis. It is negatively associated with only two variables - number of arts and science colleges and length of PWD roads per 100 sq. km. hence this factor can be identified as 'general development in tertiary sector' promoted by general and technical educational facilities, medical facilities, banking facilities. telecommunication facilities and growth in the number of vehicles. This factor takes into account 58.55 %of variation in tertiary sector development. The second factor (F2) has high positive factor loadings with only one variable- the length of PWD roads per 100 sq, km. Hence the second factor can be termed 'development in road transport'. This factor is negatively associated with the availability of educational facilities. Although the factor is positively associated with variables like health facilities, banking facilities, telecommunication facilities and growth of vehicular transport, the values are insignificant at 5% level of significance. The second factor explains about 13 % of the variation in tertiary sector development.

Table 7.7: Total Variance Explained: Tertiary Sector Development, 1970-71 1 Component 1 Extraction sums of squared loadings I Extraction Method: Principal Conlponent Analys~s Table 7.8: Factor Loadings of Principal components: Tertiary Sector Development, 1970-71 Sectoral Indicators ) Factor Load~ngs 1 CI I r;." Exlrdction Method: Princ~pal component Analysis: Tho cornponenc\ extracted. Tertiary Sector Development, 1980-81 For the year 1980-81 two factors were extracted and retained in the analysis. The total variance explained and the factor loadings of the principal components are presented in Table 7.9 and Table 7.10 respectively. As Table 7.9 indicates the factors extracted explains 86.793% of the total variation in tertiary sector development. The first factor (FI) has high positive correlation with all the variables selected for analysis except with one variable the number of schools for general education. Hence this factor can be identified as 'general development of the tertiary sector' due to the improvement in higher education facilities, health facilities, banking

facilities, transport and communication facilities. It accounts for 75.13% of the total variation in tertiary sector development. The second factor (F2) is highly associated with only one variable - number of schools for general education per 10,000 students. Hence this factor can be termed as 'progress in general education'. This factor explains 11.66 % of the total variation in tertiary sector development. Table 7.9: Total variance Explained: Tertiary Sector Development, 1980-81 Component i 2 Extraction sums of squared loadin s i E a l e % oirariance c;mulatwe.lu ', -- 8.264 75.132 1 75 132 -- 1.283 11.662 1 86.793 Extraction Method: Principal Compotle~it Analysis 1 Sectoral Indicators Table 7.10: Factor Loadings of Principal Components: Tertiary Sector Development, 1980-81 humber of schools for general education per 10000 students -. I\uoiber of arb and sclence colleges per 100,q.ktil. \'uniberofil is 1 ltcs per 100 aq.km. Percentage of total literacy - Number of Allopathic institutions per 100 sq.km. Number ofbeds ~n allopath~c ~nstitut~ons per 100 sq km. 1 Uu~nber orcommercial banks per 100 sq.km. F~umber of PACs per I00 sq.kn>. Length of P\VD roads per 100 sq.kn1. I Total number of registered veh~cles per 100 sq.km. Number of Post office ner I00 so km --- Factors Loadings FI I:? 494 -.-,764,963,071 329.05 1,784 1,292 -, ',940 -.045,920 -.225,937.OS 1,837,472,897,118,783 -.484 Extraction Method: Principal component Analysis: Two components extracted.

Tertiary Sector Development, 1990-91 For the year 1990-91, two factors were extracted wh~ch together explains a total variation of 76.50 % in tertiary sector development. The total variance explained and the factor loadings of principal components are given in Table 7.1 1 and Table 7.12 respectively. The first factor (Fl) has high positive correlation with all the variables except with two variables- number of schools for general education and percentage of total literacy. Hence the first factor can be termed as 'general development in tertiary sector'. The high factor loadings corresponding to the number of arts and science colleges, health facilities and banking facilities show that the first factor is a combination of all these variables, This factor explains 57.88 % of the total variation in tertiary sector development. The second factor (F2) is highly correlated with number of schools Ibr general education, number of IT1 IlTC and percentage of total literacy. Hence this factor can be identified as 'improvement in general and technical education'. This factor is negatively associated with variables related to higher education, health facilities, banking and postal facilities. It explains 18.62 %of the total variation in tertiary sector development Table 7.11: Total Variance Explained: Tertiary Sector Development, 1990-91 Component Extraction sums of squared loadings E~gen Values % of Variance Cumulat~ve O/u I 6.367 57.878-57.878 2 2.048 18.618 76.496 Extraction Method: Principal Component Analysis '

Table 7.12: Factor Loadings of Principal Components: Tertiary Sector Development, 1990-91 Sectoral lndlcators Factor Loadings 1 Fl F2 1 Number of schoals for general education per 10000 student? -. 130 Nuniber of arts and sc~ence colleges per 100 sq.km..936 -.03, - 1 Number of ITls 1 ITCs per 100 sq.km,177,865 I Percentage of total literacy -,032 x-1 Number of allopathic ~nst~tutions per I00 sq.km.,949 -.I61 Number ofbeds in allopathic mst~tut~ons per 100 sq.km.,932 1 -.066 Number orcornrnerc~al banks per 100 sq km.,968, _%. 1 Number of PACs per 100 sq km.,854 (n6 _ I Length of PWD roads per 100 sq km.,880.18')- Total number of registered vehlcles per 100 sq.km.,668,230 Number of Post offices per 100 sq.km.,887 -.I45 Extraction Method: Principal component Analysis: Two components extracted. Tertiary Sector Development, 2000-01 For the year 2000-01, two factors, which together expla~n a total variation of 84.164 % were extracted and retained in (lie analysis. The total variance explained and the factor loadings of the principal components are given in Table 7.13 and Table 7.14 respectively. It can be seen from Table 7.14 that the first factor (FI) has high positive correlation with all the variables except with number of schools for general education. This factor with high factor loadings corresponding to the availability of higher and technical education facilities, medical facilities, banking facilities, development of road transport facilities, increase in the number of vehicles and postal facilities can be termed as 'general development in tertiary sector'. This factor accounts for 68.80 %of the total variation in tertiary sector development. The second factor (F2) is

highly correlated to two variables- number of schools for general education and percentage of total literacy. It is negatively associated with variables relating to higher education, health facilities, banking facilities. growth in the number of vehicles and postal facilities. Hence the second factor can be termed as 'progress in general education'. This factor explains 15.37 % of total variation in tertiary sector development. Table 7.13: Total Variance Explained: Tertiary Sector Development, znnn-ni I Component Extraction sums of squared loadings Eigen values 1 % of Variance Cumulat~ve values 1 7.568 68.799 68.799 4 2 1.690 15.365 84.164. Extraction Method: Principal Component Analysis Table 7.14: Factor Loadings of Principal Components: Tertiary Extraction Method: Principal component Analysis: Two components extracted. A perusal of the factor loadings indicate that all the variables selected for analysis have been represented by the factors extracted

in different years. The high factor loadings corresponding to the different variables indicate their relative importance in determining tertiary sector development of the region. The factor scores, total scores, ranks and development status of the districts in the year 1970-71 are given in Table 7.15. Alappuzha and Thimvananthapuram are the highly developed districts. Emakulam and Thrissur qualify as developed districts. Kozhikode, Palakkad, Kollam, Kottayam and Malappuram categorise as moderately developed and Kannur is the only backward district. The 'overall development in the tertiary sector' promoted by socio- economic overheads and 'development in road transport' were the two factors identified in the year 1970-71. Among the highly developed and developed districts, Thiruananthapuram, Emakulam and Thrissur have positive values for both the factors. Alappuzha has high positive scores for the first factor but has negative values for the second factor 'road development'. Among the moderately developed districts, Kozhikode, Kollam, Malappuram and Kottayam have negative values for both factors. Palakkad has negative value for the first factor but has high positive value for the second factor 'road development'. Kannur is found to be backward in both socio- economic overheads and development of road transport.

Table 7.15: Factors scores, Total scores, Ranks and Development Status of Districts - Tertiary Sector Development, 1970-71 Extraction Method: Principal Component Analysis HD - Highly Developed, D - Developed, MD - Moderately Developed. B - Backward The factor scores, total scores, ranks and development status of districts for the year 1980-81 are given in Table 7.16. The table indicates that Alappuzha and Emakulam are the highly developed districts and Kottayam, Thiruvananthapuram and Thrisur are the developed districts. All these districts have positive values for the total scores. Kozhikode, Kollam, Kannur and Malappuram are the moderately developed and Palakkad and Idukki are the backward districts. These districts have negative values for the total scores. In the year 1980-81. 'the overall development in tertiary sector' promoted by socio- economic overheads and 'improvement in

general education' were the two factors identified. Alappuzha and Kottayam are the two districts having both factor scores positive. Thiruvananthapuram, Emakulam, and Thrissur have positive values for the first factor and negative values for the second factor Kannur and Malappuram have the second factor positive and the first factor negative. Kozhikode, Palakkad, ldukki and Kollam are the districts having negative scores for both factors Table 7.16: Factor scores, Total scores, Ranks and Development Status of Districts - Tertiary Sector Development, 1980-81 Extraction Method: Principal Component Analysis HD - Highly Developed, D - Developed, MD - Moderately Developed, B - Backward An inter-temporal analysis reveals that Kottayam, Ernakularn, Palakkad and Kannur are the districts, which improved their position in the year 1980-81. Kollam. Alappuzha. Thrissur.

Malappuram and Kozhikode were able to retain their previous positions. Thiruvananthapuram is the only district, which showed a reverse trend. The factor scores, total scores, ranks and development status of districts in the year 1990-91 are given in Table 7.17. Kottayam and Alappuzha are the highly developed districts and Thiruvananthapuram, Emakulam, Pathanamthitta and Thrissur are the developed districts. Kollam, Kozhikode and Kannur are considered as moderately developed and Malappuram. Palakkad, Idukki, Kazargode and Wayinad are the backward districts. The two factors extracted in the year 1990-91 represent 'overall development in tertiary sector' promoted by improvement in socio-economic infrastructure and 'progress in general and technical education. Alappuzha and Kottayam have positive values for both factors. Kollam is another district having positive values for both fhctor scores but the values are comparatively low. Among the developed districts, Thiruvananthapuram, Ernakulam and Thrissur have the first factor positive and the second factor negative Pathanamthitta have high positive values for the second factor and negative values for the first factor. Among the moderately developed districts Kozhikode is having the first factor positive and the second factor negative and Kannur is having the first factor negative and the second factor positive. All the backward districts except ldukki have both factor

scores negative. factor positive. Idukki has the first factor negative and second Table 7.17: Factor scores, Total scores, Ranks and Development Status of Districts - Tertiary Sector Development, 1990-91 HD - Highly Developed, D - Developed, MD - Moderately Developed, B - Backward An inter-decadal comparison reveals that Kottayam is the only district, which improved its status in the year 1990-91. Ernakulam and Malappuram are the two districts, which showed a reverse trend. Ernakulam depicted negative factor scores for the second factor 'progress in general and technical education' mainly due to the fall in the number of technical institutions per 100 sq. km. from 1.12 in the year 1980-81 to.33 in the year 1990-91.

Malappuram depicted a fall in the number of schools per I0000 students from 24.33 to 16.52 in the year 1990-91. The factor scores, total scores, ranks and levels of development of districts for the year 2000-01 are given in Table 7.18. Alappuzha, Ernakulam and Kottayam are the highly developed districts. Thiruvananthapuram, Kozhikode, Thrissur and Pathanamthitta fall in the category developed. Kollam, Kannur, Malappuram, Kazaragod and Palakkad are moderately developed and Idukki and Wayanad are the backward districts. All the highly developed and developed districts have the total scores positive. In the year 2000-01, the two factors extracted were identified as 'general development in tertiary sector' promoted by development in socio-economic overheads and 'progress in general education'. Alappuzha, Kottayam and Kollarn have both the factor scores positive. Ernakulam, Thiruvananthapuram, Thrissur and Kozhikode have the first factor positive and second factor negative. Kannur and Pathanamthitta have the first factor negative and the second factor positive. Palakkad, Malappuram, Wayanad and Kazaragod have both the factors negative. An inter-temporal comparison reveals that over the decade Ernakulam, Palakkad, Malappuram, Kozhikode and Kazaragode improved their development status. All other districts remained in their previous positions.

Table 7.18: Factor scores, Total scores, Ranks and Development Status of Districts -Tertiary Sector Development, 2000-01 I Extraction Method: Principal Component Analysis HD - Highly Developed, D - Developed, MD - Moderately Developed, B - Backward A review of inter- regional variations in tertiary sector development for the years 1970-71, 1980-81, 1990-9 1 and 2000-01 reveals the existence of wide disparities in the development pattern of districts. There has been no significant change in the development status of districts over the years. The slight changes that have taken place have been confined either among developed districts or between moderately developed and backward districts. An inter- temporal analysis of the development status of districts indicate that four districts- Alappuzha, Emakulam, Thiruvananthapuram and Thrissur have retained their developed status in all the four years. Kottayam that was moderately developed

in the year 1970-71 was categorized as developed in the subsequent years. Pathanarnthitta a newly formed district was included in the developed category in the years 1990-91 and 2000-01. Kozhikode was considered developed only in the year 2000-01, in all other years, it was a moderately developed district. It can be observed from the above analysis that all the developed districts except Kozhikode belong to the former Travancore- Cochin region. Only two districts - Kollam and ldukki from the Travancore- Cochin region failed to be categorized as developed. While in Malabar, all the districts except Kozhikode were either moderately developed or backward. It can be inferred that inter- regional differences in tertiary sector development, which existed before state formation still exist in Kerala. A number of socio- economic factors may have contributed to the persistence of regional differences in development. An attempt is made to find out whether commercialization of agriculture which was a prominent factor contributing to interregional disparities before state formation is still significant in explaining inter-district differences in development. A comparison of the ranks obtained by the districts in terms of growth of plantation sector and tertiary sector development shows that the ranks are moving in opposite directions. In the year 1970-71, Ernakulam is the only district, which ranked high in both variables- plantation sector development and tertiary sector development. Allapuzha, which ranked last in the growth of

plantation sector gets the first rank in tertiary sector development. In the year 1980-81, only Kottayam district gets high rank in terms of both development variables. Idukki, which secured the first rank in plantation sector development stood last in tertiary sector development. Alappuzha, which stood first in tertiary sector development, got the last rank in plantation sector development. In the years 1990-91 and 2000-01, Kottayam, Ernakulani, Pathanamthitta and Kollam obtained high ranks in both development variables. Idukki, which stood first in plantation sector development in the year 1990-91 stood last in tertiary sector development. In the year 2000-01. Wayanad, which got the third rank in plantation sector development, was the most backward in terms of tertiary sector development. To find out whether there exist any correlation between the growth of plantation sector and tertiary sector development. Spearman's Rank Correlation Coefficient was computed between the ranks obtained by the districts in terms of area under plantation crops and tertiary sector development and also between value of plantation output and tertiary sector development. In both cases, negative results were obtained for all the years, which show that the ranks are moving in opposite directions and there exists negative relationship between the two variables. The values of correlation coefficient were -.55, -.38, -. 1 and -.29 for the years 1970-71, 1980-8 I, 1990-91 and 2000-01 respectively for the variables area under plantation

crops and tertiary sector development. The correlation coefficient between the value of plantation output and tertiary sector development also gave negative results -.45, -.42,-.09 and -.31 respectively for the years 1970-71, 1980-81, 1990-91 and 2000-0 1. Among the fourteen districts, only four districts Kottayam, Emakulam, Pathanamthitta and Kollam rank hlgh in plantation sector development and tertiary sector development.

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