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Synopsis Kerala is really at a crossroads in terms of its economic development. The crucial role of public action in the realization of high human development indicators is now widely acknowledged. Despite impressive achievements on the human development front, the state has been struggling to achieve economic progress.This is evident from the low productivity of agricultural and industrial sectors, high levels of educated unemployment, inadequate infrastructure facilities, poor industrial climate, lack of private initiatives in industrial development and a poor state of government finances. No doubt, the state-interventionist approach for economic development has helped in attaining high standards of living, but the inefficiency afflicting the public sector has placed severe constraints on the government s ability to sustain this achievement. In the case of economic reforms, when compared to the center and many other states, Kerala was late in initiating reform measures. Besides the state is at the bottom of the league of reformers. More importantly, Kerala has not benefited much from any of its reforms.