J&K's State of Economic Destitution

Empowerment will lead to effective change


There are two ways a government starts its tenure – it either starts by working within the contours of a structure that is flawed or exhibits the political will to reform administrative structures that have failed to be channels of effective governance and development. Tragically all past governments in J&K, including the present one have gone with the first option – of defining good governance as more ribbon cuttings and inaugurations – general conservative, non-drastic movements from the median. In treading the path of survival and paranoia, the government has invested all its efforts in battling controversies, anti-incumbency and the paralyzing grease that comes with a system that is carved out to fail, a bureaucracy that is in a default mode of caution and apprehension.
During the last decade India has seen a number of follow-up policies, reviews and reforms in infrastructure, economy, healthcare, education, agriculture and social welfare – progressively moving away from a pre-90s nationalized core to an increasingly liberalized economy. The recent step to open the retail sector to FDI is another such step that aims at consolidating and organizing the retail market and also developing retail infrastructure and logistics across the country. The education sector is witnessing drastic changes thanks mainly to Kapil Sibal’s vision of a productive, systematic and efficient system of education. The HRD ministry’s policy of opening government schools to Public Private Partnerships (PPP), the Health ministry’s initiative of involving private players in revamping the existing Healthcare infrastructure are courageous steps that  aim at capacity building and reform – re-orienting the way this economy exploits it’s strengths. There are States like Bihar and Gujarat that have gone 10 paces ahead of the Central initiatives by actually revamping and reorganizing the way a government functions – in dealing with investment, growth and day-to-day governance.
Jammu & Kashmir, thanks to years of misrule and misgovernance that continues to this day, has been left out of this story – suffocated between the twin traditional families’ never-ending love affair for power.  Our State’s government expenditure has grown consistently – helped along by the government’s reluctance to disinvest and disempower. Government Revenues on the other hand have suffered grievously because of a delayed tax-reform and the ruthless exploitation of our water resources at a pittance thrown at our State.
While capacity expansion and modernization of most industrial sectors in India has been delicensed, J&K continues to reel under an unofficial License Raj as investors are shooed away by officers and ministers who are either inept, unwilling or most often than not – both. Industrial Competition has changed the fate of nations and civilizations – taking the shape of economic revolutions but combined with corruption and vision deficiency, our subtle policy of protectionism has kept healthy market competition at bay. Our conservative policy and repulsion towards private institutional investment and FDI has meant that there has been no significant inflow of either capital or technology – elements without which modernization is and will remain a pipe-dream. The thickness of government monopoly on certain industrial sectors and public sector units that have great potential has meant that industrial houses within the State and outside have been deprived of opportunities to ease out government equity, reducing overall government expenditure and increasing our State’s gross productivity. Our industrial sector continues to gasp for oxygen and hangs in midair between excessive government and bureaucratic regulation and control.
Jammu & Kashmir, as of the last fiscal year had 23 Public Sector Units (PSUs) which include 20 government companies/departments and three corporations. 3 out of the 17 PSUs have registered profits in the last fiscal year, while the remaining 14 PSUs have registered a net collective loss of around 160 crores. 99.5% of collective profit registered by the remaining profit making PSUs has been the contribution of J&K Bank – a public sector bank that has bailed out the government, giving it overdrafts and being the lender of the State – in return developing and exerting it’s own monopoly on the State’s Banking Sector.
Around 5 lakh Kashmiri families and households are directly or indirectly involved in fruit cultivation and packaging. Unfortunately the government has dragged its feet in measures from the roll out cold storages, packaging units and increasing the per hectare productivity in horticulture. The per hectare yield of apple in Kashmir ranges between 5 to 7 Mega Tons per hectare as compared to around 12 Mega Tons in Himachal Pradesh and 40 to 50 Mega Tons in European Countries. In the absence of scientific research and development – another area the government sees at its rightful monopoly, our horticulture sector – especially the apple sub-sector is now lagging behind Himachal Pradesh, adding to the comparative disadvantage of the strategic proximity Himachal has to the markets in Punjab and North India.
The Handloom and Handicraft sector is mostly unorganized and faces a monstrous challenge due to imitation and changing trends. Our Tourism sector is faced with an acute capacity deficit when it comes to the number of hotel rooms that exist in Kashmir today as opposed to the potential growth in tourist influx in the coming years. Our State stands at its economic grave. Political issues will get resolved with time, mostly dependent on extraneous conditions that neither the State nor its citizens can influence. But, once in the grave of deprivation, poverty and economic doom – our State will forever remain colonized by our own state of destitution. Empowerment will lead to effective change. The guardians of our problems cannot be the prefects of solving those problems.

(Junaid Azim Mattu is the Srinagar District President of Jammu & Kashmir People's Conference. Views expressed are personal. Feedback at junaidazimmattu@gmail.com)

Lastupdate on : Fri, 2 Dec 2011 21:30:00 Makkah time
Lastupdate on : Fri, 2 Dec 2011 18:30:00 GMT
Lastupdate on : Sat, 3 Dec 2011 00:00:00 IST

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