Thiruvananthapuram: Noted Economist Bibek Debroy said Kerala could break the development impasse in the state only by removing all restrictions on private investments, not only in industries, but also in education, health and similar social sectors.

Making a presentation before the members of the state assembly and state government officials on ''How the states are doing,'' he said Kerala has already slipped a notch from its pre-eminent position in education and health during the period 1991-2001.

He based his observations on a study he and Laveesh Bhandari, another economist, had done for a national magazine recently. According to their study, Kerala fared 10^th among 17 major states in the matter of speed of prosperity achieved during the period 1991-2001. The study evaluated over 250 variables in sectors like law and order, education, health, infrastructure, consumer market, investment, agriculture and overall prosperity.

Kerala fared first in law and order, second in education, third in health and infrastructure, fifth in consumer markets, 12^th in investment, 13^th in agriculture and 10^th in overall prosperity among the 17 states studied.

Debroy said the state receives huge inflow of remittances from those who work abroad. "Without adequate production in the state, these remittances can help only to jack up the prices of commodities here. In cost escalation, Kerala is among the top states. The worst to be hit by this phenomenon will be the poor sections of the society."

The quality of education and even healthcare too cannot be said to be of the top order here, he added. "The real bottleneck seems to be the restrictions on involving the private sector in these areas."

Debroy strongly favoured the government withdrawing from the labour market. He is not so convinced about the state''s present policy of ''restructuring public undertakings'' since it can only lead to a further drain in the exchequer. Quoting statistics, he said the government is already spending Rs 40,000 of the taxpayers'' money on each employee in the public sector. "This is, in fact, an injustice to the poor who require support."

Bhandari too was with Debroy during the presentation, attended by Kerala Chief Minister A K Antony, Speaker Vakkom Purushothaman his cabinet colleagues and several MLAs.