The Central Industrial Development Scheme for Jammu and Kashmir (J&K IDS 2021) recently announced by the Lt Governor Manoj Kumar Sinha has been welcomed by all the people associated with the industrial sector.
The scheme, which was approved by the PM Modi-led Cabinet Committee for Economic Affairs with an outlay of Rs 28,000 crore for a span of 16 years from 2020-21 to 2036-37, is aimed to boost industrialisation in Jammu and Kashmir, bring outside investment and provide employment for about a half a million people over the time.
While announcing the scheme, the Lt Governor said it will give a boost to local manufacturing, help the J&K industries to compete with national level and make Jammu and Kashmir ‘Aatmnirbhar’— self-reliant.
The scheme, which will encompass both the manufacturing and service sectors, has a number of incentives to lure the investors for investing in otherwise, geographically disadvantaged, and landlocked place. It includes 30% or 50% capital investment incentive on both plant and machinery and construction of physical assets depending on the industrial zone a person or a company is investing in.
Similarly, the scheme provides capital interest subvention of 6% for seven years up to a loan amount of Rs 50 crore, besides GST and working capital incentive. The scheme also promises to take the industrialisation to block level in all the areas of the Union Territory. It has continued the zoning of all districts in A and B category as per the remoteness, industrial backwardness and other disadvantages.
However, the full document of the scheme is not yet in the public domain. Therefore, certain things regarding the scheme are in want of clarification. The question is whether J&K IDS 2021 is just a central scheme or will act as an industrial policy for the UT. Both the experts and industrialists believe that only land banks, incentives and subsidies are not going to revamp the industrial sector here. The main problem, which besides the geographical disadvantage, political uncertainty, and lack of inf, is the policy laggard.
J&K needs a robust industrial policy, which will have a primary focus on basic infrastructures like roads, power, internet and other facilities. J&K figures among the bottom five in states and union territories of the country in ease of doing business. There is a lot of hassle in establishing an industrial unit. Similarly, despite many promises, there is no single window system. Even in industrial zones, environment, electricity and other clearances take months of visiting one office or other. As almost all the industrialist bodies from the Kashmir division want the government to have relook on the zoning given the disadvantage of the Kashmir division and some districts of Jammu division to compete with the industrially advanced districts also needs to be given a compassionate thought.
The need of the time is that alongside all these incentives announced by the government in the scheme there needs to be a well defined industrial policy with the main focus on ease of doing business.
Editorial | Modernise Horticulture
The turbulent political situation in Jammu and Kashmir for about the past three decades has marred its economic development. From being a self-sufficient state in its economic needs once, J&K has now reached a situation where it always has to be dependent on the central funds.
More than 50% of its expenditures are met from the aid and grants provided by New Delhi. Besides, J&K each year raises hundreds of crores in the form of debt. It is becoming extremely difficult for the government to pay back the interest on this debt, not to talk of the debt itself.
The political situation created vested interests and inefficient governments always had something to blame to keep away from prioritising the economic and other developmental needs of the people. An economically weak J&K suited these vested interests, the planning and policies they made never had been for reaping the available resources of the UT. Rather, certain sectors, which are totally dependent and interlinked to external forces, were given priority over the sectors, which have been time tested in J&K and are mostly weathered to external conditions.
J&K in general and Kashmir, in particular, has been an agrarian economy for centuries. And the available natural resources in the state are fertile land, forests and an abundance of water added to temperate climatic conditions, which makes it one of the best-suited places for agriculture, horticulture and other related occupations in the world.
Though the majority of the people here are associated with this profession but the mode of their operations is still primitive with negligible use of technology. Despite that, it is the main contributor to the economy. According to recently issued government figures, yearly export returns from the fruits are about Rs 10,000 crore which is only next to government salaries. Kashmir valley supplies more than 70% of the total consumption of apples in India. But a Kashmir apple fetches only half of what a Himachal Apple gets. J&K has not enough post-harvest infrastructure available and processing of the fruits is happening at a very limited level.
There is no horticulture policy in the state like we have a policy for tourism. Neither there has been any bigger provision in the state budget for the horticulture industry, except for a few tax concessions and schemes introduced in recent years.
Some of the schemes introduced by the government, like high-density plantations look very promising and the results it has shown so far are encouraging. Similarly, the government has roped in some outside investments like that of NAFED for developing high-density orchards and creating infrastructure like cold storage. These tie-ups are very important and will provide the much-needed capital for modernising the horticulture sector in UT. But some farmers have shown scepticism saying that these same are being planned in such a way that will benefit the middlemen and businessmen rather than the farmers.
The UT administration must make sure that all the schemes are formulated in a way that their first priority must be to benefit the poor farmers instead of creating a class of middlemen.
No doubt the horticulture industry needs modern post-harvest technology, processing infrastructure and new marketing strategies. This is only possible if UT makes the sector a priority and there is a long-term policy for it, which particularly revolves around the farmers. Modernising horticulture is the only way to bring economic self-reliance to Jammu and Kashmir.
Welcome to J&K
Increasing tourist inflow promise for economic revival
That more than 72 lakh tourists have visited Jammu and Kashmir since September 2021, according to the Union Tourism Ministry figures, offers a good sign of revival of the UT’s tourism sector which has seen a lot of turbulence in the past. Of these 72 lakh tourists, at least 1.45 lakh have visited the Union Territory in December 2021 alone. This good inflow of visitors comes at a time when the J&K UT, like other parts of the country, has seen recurring waves of the Covid19 pandemic which, among other sectors, badly hit the tourism sector which is considered to be an important area vis-à-vis economy of the UT.
There is no denying the fact that the tourism sector holds a great promise for uplifting the UT’s economy. But that’s only if all stakeholders get serious to realise this goal. It is important that all the stakeholders—government, local tourism players, tourism department, and other concerned members of the civil society—put their heads together and contribute to realizing this goal in a mission mode.
The Central government as well as the UT administration has already underlined its focus on the revival of tourism in Jammu and Kashmir. The government last year announced what it called a “stimulus package” which included an economic package related to the travel and tourism sectors with the larger goal of giving a boost to the UT’s economy. The said stimulus package offers small loans of Rs 10 lakh to travel and tourism stakeholders and Rs 1 lakh each to registered tourism guides for the next five years to undertake their respective activities under the scheme whose validity has been extended till the March of next year. Such a package can certainly help boost the small-time tourism stakeholders who have borne the maximum brunt of the pandemic as well as other turbulences in the Valley including the devastating floods of 2014.
There is no denying the fact that the tourism sector holds a great promise for uplifting J&K’s economy. But that’s only if all stakeholders get serious to realise this goal. It is important that all the stakeholders – government, local tourism players, tourism department, and other concerned members of the civil society – put their heads together and contribute to realizing this goal in a mission mode.
Local tourism players, as well as the UT’s Tourism Department, have a great role to play in ensuring fair practices for a lasting impression among the visitors to different parts of the UT. Even a small bad incident of fleecing of tourists will cause a dent to the tourism sector and its image.
Indeed, peace and tranquillity are important for the tourism sector to flourish in any place in the world, but it won’t be an exaggeration to say that unless and until all tourism stakeholders join hands with a sense of great seriousness, merely citing the tourist inflow figures won’t help in achieving the larger goal of turning the tourism sector to drive the UT’s economic transformation. Local tourism players, as well as the UT’s Tourism Department, have a great role to play in ensuring fair practices for a lasting impression among the visitors to different parts of the UT. Even a small bad incident of fleecing of tourists will cause a dent to the tourism sector and its image.
Moreover, there must also be a great focus of the government to not only explore new tourist destinations in areas of adventure, pilgrimage, destination and sightseeing tourism arenas but also develop the present tourism destinations on modern lines for high-end tourists as per the international hospitality standards. Gulmarg, Pahalgam and other tourism destinations are in great need of revival on several fronts. Unplanned and haphazard constructions taking place in these beautiful tourist places can not only contribute to their ugly looks, it would also cause lots of problems in future vis-à-vis their planning, development and expansion. In this context, it is important for Tourism Development Authorities to step up their vigil of the tourism destinations under their jurisdiction to check these unplanned constructions for the sake of the future of tourism stakeholders in the UT.
Regulating the inflow of vehicles into green spaces in tourist places must also be a priority for the concerned authorities, especially in famed places like Gulmarg, Sonmarg and Pahalgam—as well as important tourism destinations in the Jammu province—to secure these places in all respects in line with the requirements of their environmental settings.
All stakeholders are duty-bound to contribute to strengthening and developing the tourism sector for it to flourish and progress in a planned and futuristic manner.
Editorial | Ambitious Budget
Ambitious Budget | This week Union Finance Minister Nirmala Sitharaman presented the third consecutive annual budget of J&K in the Lok Sabha. The J&K Budget is required to be passed in the Indian Parliament as the newly formed Union Territory continues to be under the President’s rule and due to the absence of the Legislative Assembly in Jammu and Kashmir.
The finance minister presented an outlay of about Rs 1.13 lakh crore for the J&K Budget 2022-23. The budget has seen an increase of about Rs 4500 crore from the budget estimate of the financial year 2021-22. However, the revised estimate for 2021-22 shows an increase of Rs 10,000 crore.
As per the revised estimates for 2021-22, there has been a huge shortfall of estimated tax collection and other resource generation, which has proven a big handicap for the J&K Government in fulfilling its development targets.
In this year’s budget presentation, like the previous one, the focus has been put on the capital expenditure – the portion of the estimate spent on asset creation and infrastructure building, which is a positive development. However, the biggest challenge, as witnessed in the previous years, is that despite allocating funds in the budget for various sectors and projects for development works, there is either lack of resources or the inability of different departments to spend the allocations.
Take the example of Jal Shakti or the Public Health Engineering Department. In the budget of 2021-22 highest capital expenditure of Rs 6346 crore was allocated to Jal Shakti, which was more than a 400% increase. But the revised estimate presented by the Union FM shows that only Rs 2107 crore were spent, which indicates either lack of resources or an inability of the department to undertake the development works. However, a deeper analysis of the budget documents and other publicly available information suggests that both the unavailability of funds and the incapability of the administration to spend are the reasons behind it. The same is the case with many other government departments.
The revenue receipts were short of almost Rs 13,000 crore as per the budget estimate of 2021-22. Similarly, the fiscal deficit during the same period rose to Rs 16,456 against the target of Rs 10,647. The debt to GDP ratio has increased to 53% as compared to 46% in the financial year 2020-21.
As per the revised estimates for 2021-22, there has been a huge shortfall of estimated tax collection and other resource generation, which has proven a big handicap for the J&K Government in fulfilling its development targets. The revenue receipts were short of almost Rs 13,000 crore as per the budget estimate of 2021-22. Similarly, the fiscal deficit during the same period rose to Rs 16,456 against the target of Rs 10,647. The debt to GDP ratio has increased to 53% as compared to 46% in the financial year 2020-21.
The J&K Budget 2022-23 has set an ambitious target of asset creation and infrastructure development in the UT. If there are no unspent budget allocations and all these targets are completed, J&K will witness remarkable changes in the development front.
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