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This study examines the emerging economic problems which are affecting this once thriving Indian state. In the early nineties Kerala's growth rate was high due to the enhanced performance of the secondary and tertiary sectors. Unable to sustain this steep development, Kerala is now in severe recession due to a number of factors including a rapidly aging population, rising urban poverty, growing numbers of educated unemployed, a steep fall in the prices of commercial crops, and migration, both inter-regional and to the Gulf.