In need of a Big Push
The wheels of our economy need to be oiled
MALIK ALTAF HUSSAIN
Jammu and Kashmir is an agricultural economy. More than 70 percent of population is engaged in agriculture, secondary and tertiary sector is almost absent. Given this scenario, what is going to be the future of J&K economy? Where is it heading? Can we ever achieve the standard of living in other countries and states?
In economics, one of the important arguments supporting the policy of economic growth is that in the long run, the benefits of growth will trickle down to the class of society not directly involved in the growth process and hence not directly reaping the benefits of growth. When economic growth takes place, the industrialists, businessmen, investors etc get the benefits. And these people, in turn, are expected to increase the demand for goods and services and hence have a kind of multiplier effect on the economy. Also the employment of people in industries and factories increases, which transfers the benefits of growth to the lower strata of society. Is this theory relevant for a state like Jammu and Kashmir? Will the benefits of growth trickle down to the people not directly engaged in the growth process? May be not!
The trickle down argument makes sense for an industrially developed economy which Jammu and Kashmir is not. Almost all the people fall in the middle income category. Public sector is the main source of employment. What is going to trickle down and to whom? Given this situation, Government needs to make special efforts to develop the J&K, give it a ‘Big Push’ which will expand the economy, production, and employment sufficiently to sustain the economy in the future without borrowing from centre. The ‘Big Push’ can be in the form of making sufficiently huge investments which, through multiplier effect, expands the economy many times.
Jammu and Kashmir is an unexplored state. Many profitable projects lie unattended; investment avenues are vast like real estate, which is enjoying a boom in the valley, including hospitality industry like hotels etc., mobile and software industry and hydroelectricity generation. Some automobile manufacturing and assembling units can be shifted to Jammu and Kashmir as it is a developing economy and has a huge demand in auto sector. This will create real output along with much needed private employment.
The wheels of our economy need to be oiled; it has been lying idle and is obviously rusting. Agricultural production and expansion has limits, hence it can’t sustain an expanding economy. We need to have an alternative, Plan B, and that is the manufacturing sector. Popularising Jammu and Kashmir as an agricultural state won’t do any good. We deserve the luxuries, the standard of living, the lifestyle people are enjoying world over and in other states of country. And to ensure that secondary (manufacturing sector) needs to take over from primary (Agricultural sector). And Plan B needs to be implemented.
(Malik Altaf Hussain has an M.A. (Development Economics) from South Asian University (SAARC), New Delhi)
Lastupdate on : Sat, 3 Nov 2012 21:30:00 Makkah time
Lastupdate on : Sat, 3 Nov 2012 18:30:00 GMT
Lastupdate on : Sun, 4 Nov 2012 00:00:00 IST
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