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Kerala...its having near 100% Literacy. It has achieved 100% in the year 1991 at the time where the National Average was below 50%. Kerala stands forward among the most educated states in India.

Check the link from Wikipedia

http://en.wikipedia.org/wiki/Education_in_Kerala

Kerala90.86% according to 2001 census

100% according to National Family Health Survey (NFHS) designated by the Ministry of Health and Family Welfare (MOHFW), Government of India, 2007

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