Economic Revival Plan

ForKashmiris lockdown has been a way of life, experiencing it not since years butthroughout decades. Past experience has taught us various ways in combating withuncertain situations. From starting summers in Kashmir, there is always aspeculation that the worst is yet to come. What we have seen over the years inKashmir is a cycle of lockdowns, often stretching on for months. But this timethe story is all together different. The question that arises here is to howwill Kashmir’s economy behave post Covid-19?

Subsequentto ‘Gupkar Declaration’ we already faced crisis volatility; sharp economicdownturn and severe loss of business confidence. As if conflict wasn’t enoughin digging the grave for our economy, a new global pandemic is now toppling oureconomic structure upside down. Like any other place, we cannot think of doingbusiness in isolation.

   

Economic ways of coming out from the crisis:

Revival of Existing Industries:

Kashmir is apoor farming economy, publicly coordinated investment can breakunderdevelopment trap in Kashmir. Large and massive reaching ventures can behelpful in bringing monetary advancement. On the off chance that theachievement of program is required, we need a minimum amount of resources forformative projects. Taking the case of J&K Cement Limited, the company hasthe capacity to produce 600 tonnes per day. But the company is in parlousstate, facing massive losses since 2013. For year 2016, balance sheet of thesaid company shows hefty loss of an amount of Rs 3173.62 lakhs. Acquisitionscan work for J&K Cements. Financial stress on the balance sheet of J&KCement is a significant factor for its poor quality appetite to invest in. Governmentof the day should strategically tie up J&K Cements with other privatecement companies, so that it moves beyond break-even point; with this profitswill start rising and costs will decline automatically. Similarly J&KIndustry Ltd. needs major rectifications, company had been incurring colossallosses since decades. Thereby the short term strategy is to focus on investingin leading sectors of the economy.

Focus on healthcare Infra and afterward on university system

Time toconcentrate on priorities; Coronavirus has taught us hard lessons, therebythere are a couple of things that J&K administration should lay stress on. “Contextof choice has to be made now”; Government spending on the public health caresystem should be increased. The hard truth for Kashmir valley is thatdoctor-patient ratio is 0.26 doctors to 1000 patients. Recent budget estimate(J&K) has allocated Rs1268 crore on health and medical education for theyear 2020-21. Contrasted with earlier year’s spending portion just 500 croresum has been increased. Keeping an eye on rural development allocation, anamount of Rs. 1951 crore has substantially increased than the earlier year’sspending portion. Solution? “Context of choice” we must give up something ofone good to get more of the other good; J&K Administration should forfeitcertain amount for quite some time being from rural development and invest thatamount in healthcare infrastructure. Covid19 has exposed Kashmir’s poorhealthcare framework, it has likewise revealed insufficiency of our universitysystem. Henceforth, after healthcare infra we should focus on buildinguniversities. Looking at the current situation, particularly in J&K, weonly focus on learning; reading old theories and re-writing the same inexaminations. This needs to be changed. Universities like Central University ofKashmir, Islamic University of Science and Technology need to come on theforefront; focus needs to be made on research oriented activities. Governmentneeds to allocate more funds for research projects. Universities in J&K arenot able to subscribe basic database and journals; it’s high time to shift frombogus research papers to quality ones. What needs to be done? Building premieruniversity in J&K will take decades. A short term solution is that currentuniversities across J&K should collaborate with foreign universities forresearch oriented programs. For instance, if researchers from J&K willcollaborate with foreign institutes, we would be able to build models of spreadof the virus that would help in influencing public policies in our region.

A big push is required:

J&Kneeds a fiscal push for infrastructure modernization on a massive scale. IfKashmir is to emerge from the crisis, it is very crucial that we should adjustalleviation measures and financial jolt endeavors with a medium- term remakingeconomic plan. For reviving Kashmir’s economy, a massive reconstruction plan isof great importance; this will help existing business units to get back ontheir feet. What we have seen throughout the years is, unemployment at itspeak, wages being drastically reduced, firms facing delayed payment issues.Authority in J&K must ease cash streams; it should provide easyaccessibility to cheap credit to the existing companies operating in the region.The question that arises is how will the government of the day find money forreconstruction expenditure? The only way for J&K is to be financed byrunning large fiscal deficits. Twofold effects of fiscal deficits; investorswill start inducing investment projects, marginal propensity to consume willstart increasing; in simple language consumption will also start kicking. Onthe other side money supply will increase in the economy, new demand depositswill infuse capital into the J&K Bank, it will prompt unexpected spurt inthe circular flow of income in the region.

Tackle unemployment crisis:

Immediatesteps should be taken by the J&K administration on pipelining smart cityprojects in Srinagar and Jammu. This will open opportunities to jobless youthin J&K to secure livelihood for time being and will act as an engine ofdevelopment over the longer term. Bringing private ventures from all over theworld will take decades. Let’s think afresh; Gig economy can contribute inlessening joblessness to an enormous degree. Taking the case of engineers inKashmir valley, analyzing through demand-supply dynamics, we see oversupply ofengineers is persisting in the valley. Gig economy jobs can help in making thememployed. Let me take it in this way; for instance the power transmissioninfrastructure developer ‘Sterlite Power’ has started investing Rs3000 croreproject for evacuation of electricity in J&K. The local administrationshould devise a methodology to adjust these involuntary unemployed technicalengineers in getting employed on contract basis. Now that companies like TataSolars, Quality Council of India, Rural Electrification Corporation and RodicConsultants are in line for putting resources into ventures across J&K.Government of the day should strategically adjust these engineers in the saidcompanies, thereby it will help in diminishing joblessness emergency in thevalley to a good degree.

(Author is pursuing Master’s in Economics from AMU)

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