Tracing the pattern of development of transport in Kerala the present paper seeks to identify the most efficient transport network necessary for the economic development of the state. On the basis of an efficiency analysis of the different modes of transport the paper concludes that inland water transport has benefits to offer which are not being adequately exploited due to the decline that this particular mode has undergone on account of government neglect. The paper makes a plea for the revival of inland water transport and an increase in the share of rail traffic in order to remove the high burden on the road transport system.