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Service tax is a federal tax which first goes to Delhi, and is then distributed among different states.Kerala's biggest advantage - high literacy - has become a strange liability: the vast majority of educated unemployed have to go elsewhere for work.More than 30 million people live in the densely populated state, a third of which is covered by forests More people here are taking their lives than anywhere else in India.

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The argument goes that radical unions, bolstered by successive communist governments, have acted as "pressure groups advancing particular vested interests".

In the process, the general prosperity of the state has been neglected.

It also has the highest literacy rate (more than 90%) and life expectancy in India, lowest infant mortality, lowest school drop-out rate, and a fairly prosperous countryside. In contrast to India's more prosperous states, like Punjab and Haryana, Kerala can boast a very healthy gender ratio - women outnumber men here.

Life expectancy for women is also higher than for men, as in most developed countries.

The central government is busy tackling poverty and illiteracy in most states, so doesn't have time or money for Kerala.

And successive governments in Kerala have not been able to take it forward," says Dr George.

Yet, today, Kerala is a straggler economy almost entirely dependent on tourism and remittances sent back by two million of its people who live and work abroad, mostly in the Gulf.

Joblessness is rife due to the lack of a robust manufacturing base - more than 15% in urban areas, three times the national average.

And thanks to pioneering land reforms initiated by a Communist government in the late 1950s, the levels of rural poverty here are the lowest in India.

Decent state-funded health care and education even made it the best welfare state in India.

Its famed model of development, which is still touted as the most inclusive one, appears to have hit the buffers.

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