The Structural Erosion and the Decline of Tourism’s GDP Share in Kerala, India
Ann Mary Cherian
Department of Economics, Christ College (Autonomous), Irinjalakuda, Kerala- 680125, India.
Jean Maria George *
Department of Economics, Christ College (Autonomous), Irinjalakuda, Kerala- 680125, India.
*Author to whom correspondence should be addressed.
Abstract
The paper analyses the role of foreign exchange earnings from tourism in Kerala, India. Tourism in Kerala has been often hailed as a key driver of economic growth in the state. The findings confirm a statistically significant positive relationship between foreign exchange earnings and state GDP. However, the descriptive evidence reveals a paradox: the overall share in of FEET in SGDP has steadily declined over the past three decades. The paper has revealed the structural erosion in the sector relative significance by analyzing the data from 1991 to 2023. This is mainly due to the explosive growth of non-tourism sectors in Kerala. The paper concludes that while tourism remains a vital sector, its capacity to drive overall state growth is diminishing relative to external economic flows, necessitating targeted policy interventions to enhance tourist yield and diversify high-value tourism offerings.
Keywords: Tourist arrivals, foreign exchange earnings, structural erosion, SGDP