Prof. A.N Sadhu
The economy of a region primarily depends upon its resource base besides its accessibility to rest of the country and the world. Unless any particular region of a country is integrated in the national and global economy, its development remains inhibited. The integration of a regional economy besides depending upon road, railway and air connectivity also relies upon the social quality of its people marked by their entrepreneurship, competitiveness and efficiency. Both, the physical and social infrastructure are of utmost importance to promote the integrated development of a regional economy. In a state like Jammu and Kashmir, sustainable development cannot be achieved unless there are strong linkages with the national and global economy through market channels, investment channels and skill formation.
As far the entrepreneurship is concerned, the people of the state are well equipped with handicrafts exhibiting their exclusive skills in a larger number of trades run as household enterprises and small industrial units such as shawls, carpets, embroidery and wood work. The state enjoys a distinct advantage in horticulture produce, both in fresh and dry fruits besides a high quality timber primarily deodhar which grows in plenty in some exclusive forests of the state.
The developmental potential of the state primarily depends on the following : –
1. Tourism including pilgrimage tourism
2. Agriculture and Horticulture
3. Hydro-electric power
4. Physical infrastructure
5. Entrepreneurship and skill formation
6. Establishing small and medium term industrial units
As regards tourism, it has a great potential in the state. It had started growing along the right lines till 1989 and received a serious blow thereafter due to militancy. Even though the influx of tourists grew gradually till 1989, but the state’s tourism policy remained seriously lop sided in many respects. One of the serious drawbacks of tourism policy has been its failure to diversify tourist destinations, on the one hand, and to ignore its qualitative integration with national and international standards, on the other. Failure to diversify the tourist locations resulted with a sharp fall of tourists to few thousand in 1990 as compared to around six lacs in 1989, when only Kashmir witnessed unprecedented turbulence while other tourist destinations in different parts of Jammu could have significantly contributed to maintain the previous figure. Even now when with relative peace in the valley, the tourism has picked up but again new destinations are neither opened up nor advertised for information of the incoming tourists. A very efficient and friendly tourism infrastructure is the need of the hour. Even this infrastructure has to be so diversified as would cater to the requirements of different sections of tourists as per their economic status and as also meet the requirements of domestic tourists. The tourist spots which fairly compare to Pahalgam, Gulmarg, Kokernag and Mughal gardens, in other parts of the state should be properly and adequately developed to attract tourists which will go a long way in enhancing the influx of tourists to the state as also distributing the economic gains of tourism in all parts of the state. A strong monitoring and advisory mechanism should be in place to ensure a pleasant experience to the tourists of all classes. Good deal of attention needs to be given to pilgrim tourism, adventure tourism, mountaineering and sports.
As regard agriculture and horticulture, the state has done reasonably well by setting up agricultural Universities in both the regions of Jammu and Kashmir but again not much of attention has so far been given to its diversification. The state experiences extreme weather conditions which limits the duration of crop season and restricts its scope for large scale diversification, but there is plenty of scope for establishing food and fruit processing units in the state. With revolutionary developments in food and fruit preservation technology, the state should harness immense advantage, it can enjoy by setting up such processing units and exporting processed products to the world markets. Again what is required is opening up to collaborations and quality integration with global participants in the trade. The forest produce, particularly medicinal herbs and floriculture should receive a good deal of attention to establish exclusive intellectual property rights in the production of herbal medicines and cosmetics.
The state has utterly failed in proper planning of exploiting its Hydro-electric power potential. Unlike the planners of neighbouring state of Himachal Pradesh led by their first Chief Minister Dr. Y.S Parmar, who always worked to get all their resources mobilized for building the all weather road network which brought the state immense advantage of getting integrated with national markets for trading the agricultural and horticultural produce in time, the state of Jammu and Kashmir did not place the right emphasis on building the power infrastructure for which it has an immense potential. Even, at present, out of around 20,000 M wts of Hydro-electric power potential, only about fifteen percent alone has been exploited. Had the right emphasis been placed on it, the state would have been net exporter of power and revenue generated by exporting power would have stood in good stead to steer the state to a higher growth trajectory as is the case in neighbouring Bhutan. The state will have to generate funds to aim at greater generation of power and enhance its resource base to ensure future sustainable development for all the three regions of the state. The state needs more power for its own requirements of domestic and industrial consumption.
The economy of the state is in great need of a sound physical infrastructure comprising of all weather roads, railways and transportation. Keeping in view the topography of the state, road network serves as a life line of economic sustainability and facilitates mobility of people besides ensuring uninterrupted supply of goods and services to the remote areas of the state. As the state is a border state, the fast movement of defence personnel is always the requirement for safeguarding the international border and the LOC. It may not be out of place to mention that defence personnel has played a significant role in boosting the state economy by generating effective demand, by maintaining and building roads in the remote areas and also investing in its social infrastructure. In the wake of hostile environment across the border, the state heavily depends on an efficient road and transport system. The emerging world economic order would also warrant that a strategic state like Jammu and Kashmir develops its connectivity to harness the advantages of global integration.
Having described the current economic environment in the state, it is time to dilate on its future prospects. Sustainable development heavily depends upon
(i) peace and hormony,
(ii) healthy investment
(iii) sound institutional framework and
(iv) economic integration with the national and global markets and economic players.
The state witnessed unprecedented violence during the last quarter of a century, more particularly, in the last decade of the last century. It served a serious set back to economic infrastructure of the state. The security agencies put up a commendable effort in containing the violence, but the state is completely not free from this incidence. The civil society as also the state agencies will have to join hands to promote peaceful environment and let the economic forces have a free play to achieve a higher rate of growth. Although the GSDP has been rising at a steady rate of about ten percent, but the state’s productive base is narrow and unless it widens, the sustainable development cannot be achieved. Peace is imperative and all out efforts are required to be made to achieve it.
The investment climate of a state depends on tax incentives, investment subsidies, availability of finance, incentives for foreign direct investment (FDI) and profitability of the industry. It also depends on physical infrastructure, power, information structure and social infrastructure. Govt. of India is providing adequate incentives in terms of tax exemptions, subsidies and procedural facilitation. However, the ground situation is still not of the level as would generate confidence among the investors, both national and foreign. Although GOI has been giving counter guarantees to international funding agencies such as World Bank, United Nations Development Programme (UNDP), the Asian Development Bank (ADB) and other international financial institutions for disbursing funds and giving technical support to various developmental projects in Jammu and Kashmir. Govt. will have to strive hard to maintain peace and tranquility in the state to attract investors in a big way for boosting the industrial environment in the state. A very sound institutional frame work shall also have to be set up for facilitation and procedural ease to motivate investors to invest in the state.
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