Human Development Parameters
The quantification of economic growth performance has been debated for a long as it does not reflect the fruits of growth trickling down to the different strata of population in an equitable manner across the development parameters. Therefore, how far the investment-outcomes, in terms to all social and economic amenities, are accessible to people can be gauged from the available data on human development parameters that needs to be assessed to arrive at development performance. These parameters are broadly housing conditions, access to education, healthcare, access to safe drinking water, sanitation conditions and access to electricity. Among the economic parameters, besides income, the holding size, assets, and employment are reasonable to demonstrate the achievements in development.
According to Census estimates, 2011, the literacy level has reached 67.16 percent in case of rural sector and 77.12 percent in case of urban areas in Jammu and Kashmir. However, the recent NSS estimates (2017-18) show that the literacy percentage stands 80.5 percent among males and among 62.3 percent among females. While the highest education level, that is, ‘graduation and above’ the proportion of persons stands 8.3 percent in Jammu and Kashmir as against Himachal Pradesh 12.1 percent, Haryana 14.8 percent, Punjab 11.9 percent and All India average of 10.6 percent. In respect of education, Jammu and Kashmir is lagging behind the other states and national average.
The Census estimates 2011 show that the households living in good housing conditions has increased from 34.90 percent 2001 to 48.33 percent in 2011 in rural areas and the same has risen from 57.16 percent to 70.86 percent in urban Jammu and Kashmir during the reference period. The Census estimates show that the households living in good and livable conditions comprise 96.11 percent in 2011 and the NSS estimates of 2018 show that 95.5 percent households in Jammu and Kashmir live in good and satisfactory housing conditions and 88.6 percent live in pacca houses as against All India average of 83.3 percent. As per NSS estimates, (2012), there are 98.3 percent households in rural areas and 97.5 percent in urban sector in Jammu and Kashmir who live in their own houses and 73.5 percent live in pacca houses in 2012. There are 78.8 percent households in Jammu and Kashmir having exclusive access to bathrooms (NSS, 2018) as against All India average of 58.7 percent.
In addition to the access to the good housing, access to the safe drinking water is considered to be an important parameter for social and economic development. The official data shows that the number of villages covered by potable water increased from 6506 in 2004-05 to 9213 in 2011-12 registering an annual increase of 5.94 percent with population coverage of 60.23 lakh and 98.65 lakh in the reference period demonstrating an annual increase of 8.73 percent. On the other hand, the number of villages with access to potable water increased from 10055 in 2012-13 to 14315 in 2018-19, registering an annual increase of 7.06 percent, while the population coverage from 104.81 lakh to 126.45 lakh registering an annual growth of 3.44 percent. The NSS report 2012 shows that ‘households having sufficient drinking water throughout the year’ stood 71.5 percent in rural areas and 85.0 percent urban areas of Jammu and Kashmir. The NSS Report 2018 further reveals that percentage of households having access to piped water stood 56.4 percent in Jammu and Kashmir, 39.8 percent in Himachal Pradesh 44.3 percent in Haryana and 21.4 percent at All India level. The report further shows that excess to the piped water by’ exclusive use of households’, both rural and urban areas, stands 76.3 percent in Jammu and Kashmir, 57.7 percent in Himachal Pradesh, 69.1 in Haryana percent and 51.7, on an average, at national level. The report further reveals that the households in rural and urban areas of Jammu and Kashmir have access to ‘exclusive use of latrines’ to the extent of 88.3 percent in 2019 as against All India average of 79.8 percent These data demonstrate that the human development parameters in Jammu and Kashmir are much better than its neighboring states and national average and more robust prior to 2013 in many respects than at present. Similarly the supply of electricity as per NSS report 2012 for domestic use in respect of Jammu and Kashmir has been 95.4 percent in case of rural areas and 99 percent in case of urban areas and official data of Jammu and Kashmir shows that 98.30 percent inhabited villages have been electrified by 2012 and 99.94 percent in 2018-19.
In its routine feature, the National Sample Survey Organization (NSSO) has carried out recent debt and investment surveys and in the present analysis, we make a comparison of two periods, 2014 and 2021 in respect of J&K and a few neighboring states. The data pertain to an ‘amount of debt per household with an outstanding liability’ (ADOL) which in respect of Jammu and Kashmir stands Rs. 100562, Himachal Pradesh, Rs.180396, Haryana Rs. 193312 and the national average Rs 10345 in case of rural sector and in case of urban sector the ADOL for Jammu and Kashmir stands Rs.410484, H.P Rs.514719, Haryana Rs. 930757 and the national average of Rs.378237. The Jammu and Kashmir has the lowest incidence of debt burden in rural sector as compared to neighboring states and national average and the debt burden is lower compared to H.P and Haryana in case of urban sector. In the year 2021, (NSS 77th round), the Jammu and Kashmir shows Rs 136000 ADOL, H.P Rs. 267000, Haryana 294000 with national average of Rs 171000 in case of rural sector and in respect of urban sector the Jammu and Kashmir households stand with the debt liability of Rs.352000, H.P Rs.588000, Haryana, Rs. 828000 with national average of 537000 in respect of urban sector. In both rural and urban sectors and in both the periods the household debt burden is lesser in Jammu and Kashmir if compared with the national average and may other neighboring states. Therefore, the economic and social and human development parameters of in Jammu and Kashmir have been robust than many neighboring states and the national average prior to 2014 and has been maintaining the trend.
Fiscal performance and debt ratio
The economy continues to rely on external fiscal support, partly statutory entitlement and partly in the form of grants. The leakage-effect continues to rise unabated as a result of lack of import-substitution policy. So is true with the central devolution of funds, owing to lack of efforts to enrich fiscal capacity building, the economy is bound to be severely in debt. The recent budget estimates reveal that out of the total receipts (2019-20) 81.15 percent goes into revenue expenditure, mostly salary, wage, pension and related expenditures. In 2020-21 fiscal, out of budgetary receipts of Rs 92341 crore, the revenue expenditure amounts to Rs. 62486 crore, that is, 67.67 percent and 63.34 percent for the fiscal 2021-22 (estimate) with fiscal deficit Rs. 10647 crore (Budget Estimates). During the current fiscal 2021-22 among the estimated budgetary resources, the own tax and non-tax revenue constitute 23 percent, central grants 34 percent, borrowings 11 percent, additional resource mobilization (ARM) 23 percent and centrally sponsored schemes and Prime Minister’s development programmes 23 percent of the required resources. The current budget has also estimated expenditures on account of salaries, pension, interest payments around 43 percent of the total expenditure and total revenue expenditure 63 percent. The capital expenditure has been rising for last several years with 37 percent in the current fiscal which primarily aims at capacity building in the economy unlike the revenue expenditure. Efforts have been made to augment the internal resource mobilization (IRM) by the successive governments in the past. During 2004-05 to 2010-11 period, the own resources have increased from Rs.2140 crore to 5984 crore, registering an annual average increase of 29.94 percent, while during the period 2013-14 to 2020-21,fiscal the own tax and non-tax revenue have increased from Rs. 6198 crore to Rs. 17030 crore, registering an annual average increase of 24.97 percent. Therefore, the resource- economy has performed relatively better in the period the 2004-05 to 2010-11 in comparison to the period 2013-14 to 2020-21.
The debt burden has been a serious problem in all states, despite FRBM Act in place. The public expenditure compression measures, particularly on the revenue front, have not been as robust as contemplated since the enactment of FRBM, Act. The total debt burden in the fiscal 2006-07 was Rs 13505 crore and with GSDP at current prices Rs. 29115 crore, the debt-GSDP ratio stood 0.46 as against 0.27 for 2013-14 and 0.26 in 2019-20 fiscal. The public debt increased from Rs.18567 crore in 2010-11 to Rs. 26490 crore in 2013-14, that is, an increase of 42.67 percent and further to Rs. 46702 crore in 2019-20,that is, a rise of 76.30 percent during 2013-14 to 2019-20. During the entire period from 2010-11 fiscal to 2019-20 the total public debt has increased by about 152 percent.
From the fiscal 2010-11 to 2013-14, the internal debt as percentage of gross state domestic product (GSDP) is reduced from 28.47 percent to 26.34 percent, while the same has decreased from 25.38 percent in fiscal 2013-14 to 25.28 percent in the fiscal 2018-19. The fiscal parameters demonstrate relatively better performance in the earlier period than post 2013-14 fiscal. Similarly the aggregate fiscal liabilities, which stood Rs.28724 crore in 2009-10, that is, 59.36 percent of GSDP at current prices, 51.61 percent in 2010-11, 45.84 percent in 2013-14 (Rs. 44646 crore) and further increased to Rs. 83573 crore or 46.47 percent of the GSDP. The borrowings have been reduced and ways and means overdraft from J&K Bank came to close, there by reducing the liabilities since 2012-13. Analyzing the budgets estimates, the total tax and non-tax revenue of Rs.2486 crore in 2006-07 and Rs. 8186 crore in 2013-14, the annual growth of IRM emerges 32.73 percent. On the other hand, the internal resource realization, that is, tax revenue and non-tax revenue, are estimated Rs.17305 crore in fiscal 2020-21, and Rs.8187 crore in the fiscal 2013-14, thereby registering an annual growth of 15.91. Further, from the budget estimates, it appears that the public expenditure has substantially increased from Rs 67008 crore in 2018-19 to Rs.108621 crore in 2020-21, that is, by 65.65 percent in just three years and ordinarily should demonstrate development progress. One of the critical bottlenecks on J&K’s resources has been the power purchase from CPSU which stood Rs. 4320 crore in 2014-15, Rs.4667 crore in 2016-17 and is estimated in budget 2020-21 Rs. 5500 crore.With internal capacity building this leakage effect could be reduced to minimum.
One of the serious problems, deserving immediate attention, is the problem of unemployment. The NSS estimates for October-December, 2019 and 2020 reveal that the labour force participation stands 38.4 percent (age group 15-29) and unemployment rate has risen from 15.5 percent, in October-December, 2019 to 17.8 percent during the same period in 2020. The unemployment rate at the national level for the same period also has gone up from 7.9 percent to 10.3 percent but is lower than Jammu and Kashmir. The demand push investment opportunities in the economy with business climate of certainties possibly may retrieve the Jammu and Kashmir economy to self-sustained growth.
Professor Nisar Ali is former Head Economics Department &
Dean of Faculty, University of Kashmir.
Disclaimer: The views and opinions expressed in this article are the personal opinions of the author. The facts, analysis, assumptions and perspective appearing in the article do not reflect the views of GK