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Budget 2021: Colourful but hollow



Budget 2021 Colourful hollow


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Young Kashmiri banker winsBudget 2021 was paperless. It was presented from a tablet. Before the budget announcement, there were widespread speculations about an upswing in healthcare, fiscal harmony, education, vaccination, and joblessness. Economists had a hybrid sentiment concerning fiscal levelheadedness and the ration of resources. While some economists surmised in fiscal tactfulness, others foretold unpacking of spending spans. Some other economists thought that GDP transition, fiscal vocation and spending can linger; joblessness and health have to be dealt with. Monday’s Budget was an endeavour to stay balanced and cover all perspectives. It was triumphant to a tangible breadth. Yet, it circumvented many fundamental matters like Education, Employment and Tax.

The introductory and leading highlight was the outlay for the healthcare vicinity. From a minuscule allocation of 96,000 Crores, this sector is going to win a mega carton of cash as gigantic as Rs 2.23 lakh crores. This is a whopping upgrade of 137%. Hopefully, now common man will be in a position to avail of better healthcare services. We, however, will have to gaze and gawk how the policies are carried out in verity. Besides, this allocation is going to be bolstered in the future years as affirmed by the Finance Minister. Succeeding acuity of Monday’s Budget was Rs 35,000 Crore crate for corona vaccination. On a flip side, nonetheless, we have rationales to surmise that it may be beguiled. That is because, several sub-sectors—that are not directly healthcare sectors—have been accommodated. These are areas like Aayush, etc. This has to be scrutinized in the coming days when there is unmistakable translucence.

Our incomes are axed by taxes. We needed a robust and comprehensive financial policy. We need clear-cut employment, education, livelihood policy. The policymakers at the helm of the affairs should devise practical strategies.

There were a few exemptions concerning Income Tax Return (ITR). Those senior citizens who are over 75—and are earning only pension and bank interest—are exempted from filing of returns. This does not mean that there is any concession in tax for such people. It is just a respite regarding who has to file a return. Likewise, ITRs for the salaried class would be prefilled with the earnings from salary and bank interest. This would make the filing of return slightly easier. These are not concrete windfalls or exemptions.

One of the heftiest punchlines of Sitharaman’s budget speech was that of Fiscal Deficit. She announced that the Fiscal Deficit is pegged at 9.5%. She also added that this gap would be narrowed down to 4.5% in the years to come. An economic analysis, however, makes it clear that this would not be a cakewalk for the NDA government. She said that the government would resort to borrowings and would approach the market to fulfil the announced appraisals. This, however, seems unlikely. All governments so far have been unable to maintain a narrow fiscal gap. Hand in hand with fiscal discipline and balance, the government has shifted its gear towards spending. This is in line with what was predicted.

There were some statements in the Fin Min’s speech which neutralised each other. For example, she induced an agricultural cess over petrol and diesel. This additional cess was, on the other hand, neutralised by a reduction in import duty. This would leave the overall effect over the prices of petrol and diesel unchanged for consumers. On the same lines, an additional duty was announced over imported apples, etc. This is also unlikely to affect the prices of domestic produce. The overall impact of these changes is negligible.

A ’Bad Bank’ has been introduced. According to Sitharaman’s speech, it would be a new bank that takes care of the bad debts of other banks. It would be like shaking the balance sheet of other banks, accumulate all bad loans and put into the Bad Bank. For now, the idea seems promising. It would focus on the recovery and management of Non-performing Assets (NPAs). The other banks may carry out normal business without bothering about their bad debts. How constructive the plan may prove would depend upon the capital infusion, policy framework, execution and other details of the newly proposed bank.

Moving toward the disinvestment and privatisation front, it has been a lamentable budget. To the amazement of any sane economist, the government announced that an Insurance Company and two Public Sector Undertaking (PSU) banks would be privatised. In common parlance, it means it is going to auction its assets. Their reasons are not reasonable. If some banks are not in a strong position, it doesn’t mean you would sell them. You need to make a targeted and planned intervention and cure their rotten balance sheets. Deal cannot resue. Who sells assets, after all? In multiplication to this, disinvestment will be made in the Life Insurance Corporation (LIC). Where are we heading to? It is just like selling an aeroplane and buying a kite. It would fly for some time. But it would soon come tumbling down. Tough times are truly ahead. On the other hand, a layout of Rs 20,000/- Crores as a capital infusion to Public sector banks has been made. This is aimed at making them able to comply with the regulatory norms.

On the social impact side, some budget outputs would affect common masses. There is a vehicle scrapping policy. Now, old vehicles that are more than 20 years old—and 15 years in case of a commercial vehicle—will have to pass a check before they are allowed to ply on roads. If they fail—which is quite a possibility—you will have to sell it and buy a new car. Another option is to station it in a corner of your courtyard and keep it fresh for memory and display! Coming onto what a common man asks after every budget: What is dearer and what is cheaper? Well, gold and invaluable metals are now cheaper. TV sets, Washing Machines, LED lamps, Air Conditioners, etc will be expensive. A common man and a middle-class man needs food, shelter, clothes, some affordable gadgets. These are dearer now. However, fair news comes for those whose wedding is in the offing. Buy gold now or wait for some more days. The yellow metal is going to get cheaper.


A government is for the people. It must listen to the people. The public has been reeling under joblessness. The education of our children is in the doldrums. Their future appears uncertain and dark. Our incomes are axed by taxes. We needed a robust and comprehensive financial policy. We need clear-cut employment, education, livelihood policy. The policymakers at the helm of the affairs should devise practical strategies. They must not beat around the bush. Hope good sense thrives in the days to arrive.

The author is an MBA, NET, IBPS qualified. He works as Manager Scale-II in the Middle Management of a reputed PSU Bank. The views are personal

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J&K’s simmering unemployment



J&K’s simmering unemployment

Exacerbated due to the ongoing COVID19 pandemic, unemployment is an ongoing issue in J&K. Meer Nida and Salman Jeelani analyse the causes and consequences of J&K’s simmering unemployment problem.

The COVID19 pandemic has already been through multiple waves globally, and there seems no hope of any light at the end of this dark tunnel anytime sooner. The economic recession due to COVID19 and its subsequent consequences, like loss of livelihoods and rising unemployment, have already affected the mental health of people. Besides, there is uncertainty looming around the globe. However, the problem in the Union Territory of Jammu and Kashmir is more severe considering the prevalent consequences of the pandemic, added with the unattended issues of unemployment in the valley for a very long time. A recent report from the Centre for Monitoring Indian Economy (CMIE) indicates that Jammu and Kashmir has an unemployment rate of 22.2 percent, the highest among all the states and union territories of the country. It is more perturbing to state that the unemployment rate of J&K is much higher than the average national unemployment rate of India, which was at 7.1 percent as per the report.

J&K’s simmering unemployment

The soaring unemployment in Kashmir is a serious concern. The pandemic, along with ongoing uncertainty, has severely damaged the prospect of a stable economy. And the rising unemployment puts the final nail in the coffin of economic stability. The job markets have been pushed to the edge, both in the public and private sector, with no fresh opportunities visible. As the valley doesn’t have a vibrant private sector in place, the burden of employment ultimately falls on the public sector, which, unfortunately, it is unable to tackle as the absorption rate is low.

The government and its various departments do not seem, at all, serious about these rising figures. There are not enough or even requisite posts advertised in the government departments, and even, if advertised, they are never worked out effectively – lack of proper schedules and criteria, relapsing of the advertisements as per their whims, corruption, backdoor entries, favouritism etc. are the main loopholes. There seems to be no proper policy in place in the institutions, which is highly detrimental considering the unemployment issue in the valley. Last year, when the Directorate of Employment created a portal for registering unemployed persons, it is disheartening to mention that around three lakh research scholars and postgraduate degree holders enrolled on the website within a few days. Even when the Jammu and Kashmir Service Selection Board (JKSSB) advertised around 8,000 Class-IV posts, more than five lakh aspirants applied for the same. However, it underwent a controversy considering that the aspirants with higher qualifications were not considered for the posts. The burgeoning figure is an indication enough about how sorry the state of affairs concerning employment is in the valley. And then there is this looming question – Where do the ones with higher education go? The low demand and absorption rate is so alarming that people with higher qualifications and professional degrees, in order to support themselves and their families, have to set for menial jobs and meagre salaries. Especially in the minuscule private sector available in the valley, this often results in their exploitation.

Even in the government sector many people work on a daily wage or contractual basis. And the government is head over heels in deep slumber and pays no attention to the demand for regularisation of their services. The government disengaged a number of contractual lecturers in the Education Department from their services, despite having served various institutions for several years together. Now, in their late thirties and about to cross the upper age limit, they are jobless and have nowhere to go except raise their demands for regularisation. Many daily-wage workers in other departments, like Urban Local Bodies, Social Welfare Department, are hoping against the hope for the regularisation of jobs. It is a vivid example of how the government itself became the root cause for the apathy of these youth who are victims of its ‘use and throw’ policy and have to fend for themselves amidst the already prevalent uncertainty.

While the apathetic attitude of the Education Department was in the news for a long time, the government rarely bothered to care. It contends that its policy of absorption of Rehbar-e-Taleem (ReT) and Sarva Shiksha Abhiyan (SSA) teachers leaves no vacancies for fresh recruitments in the teaching department and is likely to continue for upcoming many years. However, this contention is a root issue itself. The teacher-student ratio in many schools and colleges is highly disproportionate. There are many examples where there are too many teachers for very few students and vice-versa, leaving minimum chances for the highly educated youth to render their services as skilled and learned teachers in the Education Department. Often, government schools in the valley show poor results, and there are complaints about inefficient staff and teaching-learning scenarios. Besides, colleges and universities not advertising various teaching posts regularly also become a hindrance for the livelihood of educated youth. One of the reasons behind this is the extension of services of staff members beyond superannuation or enhancing the retirement age from time to time. This tendency heavily weighs over the employment opportunities for many deserving candidates who are highly learned and skilled. Plus, the system of backdoor entries and nepotism has favoured people who, with an approach to government corridors, secure jobs for themselves, thereby rendering many deserving candidates jobless.

Also, every year, thousands of students pass with professional degrees. The moment they get the degree, it is disheartening to mention that they end up shifting their courses according to the job availability around the state. It, in turn, leads to doctors working as administrative officers, engineers working in banks, students of commerce working in a sector where Liberal Arts and Humanities students could have got absorbed. It has led to the dilution of professional skills and talent. But is the youth to be blamed for this intermingling of professions? The answer is a clear-cut NO. When there are no decent job opportunities available, how will the youth fend for themselves in a society which provides them literally no ‘proper’ avenue to exercise their skills?

J&K's simmering employment

With the introduction of the All India Quota (AIQ) for securing admissions in prestigious medical colleges of the valley — though deferred for implementation from the next academic year — the students from Jammu and Kashmir will have to compete for securing admissions in prestigious medical colleges of the UT with students across the country. The state quota has five hundred seats for post-graduation in the medical field. Around 3,000 students used to compete for them within the valley itself. With the implementation of AIQ, 50 percent quota from each of the Government Medical Colleges shall be granted to the national pool, and for prestigious deemed institutions like Sher-e-Kashmir Institute of Medical Science (SKIMS), a perfect hundred percent will go to the all-India quota. The work bond of the candidates who get selected outside J&K will be around 8 to 10 years, which if one fails to fulfil could end in a penalty, but for the candidates from across the country who get admitted to the institutions in the valley, there is no such thing as bond in place. The results of this policy shall be dire. Each year, the number of postgraduate aspirants rises due to the lesser seats available for the J&K domiciles, which, in turn, shall be distributed among reserved and unreserved categories, thereby delaying the postgraduate studies, which diminishes prospects of healthy employment.

The same stands the case for various job advertisements. Earlier, the jobs in J&K were reserved for state subjects only. But now, people from across the country may compete for the posts advertised by the public sector departments. This step is another blow to the already poor unemployment scenario in the valley. Moreover, this is an unhealthy and unequal sort of competition as the students and aspirants from the valley already suffer a lot due to shutdowns and uncertain internet clampdowns or speed restrictions, whereas students from across the country do not face these restrictions. This unfair competition will result in the possibility of Kashmiri people lagging behind due to mismanaged policy-making.

The figures of the Jammu and Kashmir Public Service Commission (JKPSC), the recruiting agency behind the Combined Competitive Examination (CCE) show that the number of posts has been decreasing year on year. On the other hand, the government reduced the age bar of the unreserved category aspirants from 37 years to 32 years, leaving the youth high and dry. This criterion was a bolt from the blue for the JKAS aspirants since the CCE, which is already irregularly patterned and conducted after a gap of three years. However, the government did listen to the woes of the aspirants and put the new criterion on hold for the year 2021, giving only a one-time relaxation which was indeed a good step, though most chances are it will get implemented from next year onwards. The minimum age bar and reduced number of posts is another obstacle for the aspirants. Considering the fact that they have to prepare for the UPSC-modelled exam amidst all the political uncertainty and internet restrictions, it is a grave injustice to the youth of the valley. Moreover, some other states in India do have the upper age limit of 37-40 years to appear in their state service exams. J&K Government seems to be whimsical in adopting this separate criterion, which has perturbed the youth and done nothing positive to ease their miseries. Rather than reducing the age bar, the government and the recruiting agency should have looked into how the number of posts could be increased and how the exams could be streamlined and conducted more regularly. Moreover, it should have lent a helping hand to already distressed youth with free coaching and other facilities.

As far as the private sector is concerned, it is almost non-existent in the valley. Industries and corporate sectors are non-existent. While the government expects the private investment will create new jobs in the valley, these promises are yet to show any results on the ground. The existing private sector keeps receiving severe blows due to successive lockdowns, especially since 2019- whether the post-abrogation shutdown or the harsh Covid19 lockdown.

Moreover, the order of awarding mining contracts of sand, stone quarrying, etc., to non-J&K residents has also led a blow to the livelihood of natives. This step has snatched the bread and butter of hundreds of families who priorly relied upon the same. The conversion of forest and agricultural land into industrial estates is another grave issue J&K faces after removing its special status. The demolition drive by the state for the extraction of land for industries has rendered the tribal community without homes and affected their livelihood.

Another initiative by the Government of India to allow the processing of globally acclaimed Kashmir Pashmina in Varanasi town of Uttar Pradesh will also hit the livelihoods in Kashmir and Ladakh. The Khadi and Village Industries Commission (KVIC) has reportedly roped in institutions in the Varanasi town (parliamentary constituency of PM Modi), where raw Pashmina wool will be processed and further weaved into fabric. While the KVIC claims that the step will ensure the availability of genuine and affordable Pashmina wool products, the decision is a cultural shock for local artisans in J&K and Ladakh, who believe, it will affect their livelihood. The cultural imbibition has also impacted the employment of local tailors, designers and boutiques in the valley. Many people are of the view that earlier, the native traditional dress, Pheran (long, warm Kashmir cloak), was manufactured in Kashmir only, but now many fashion designers and outlets across the country are producing it at cheaper rates, which has also resulted in a cultural as well as an economic loss to the valley.

In a nutshell, the economy of Jammu and Kashmir has been suffering since dawn, with unemployment being the major debacle as it concerns the youth of the society, who are the pillars of a sound and stable future. However, on account of rising unemployment despite professional degrees, skill training, and education from top-notch universities in the country and abroad, the youth of Jammu and Kashmir are beset in a terrible crisis. They have no vision for better prospects and better opportunities as the government is far from providing them. It has, in turn, led to a depressed and under-confident youth. The job losses and rising unemployment scenario with no bright prospects consume the Kashmiri youth silently. It is indicated through the abrupt rise in suicide cases of young people during the pandemic. Moreover, a recent study revealed that Jammu Kashmir has about six lakh people involved in drug-related issues, and 90 percent of these drug users are in the age group of 17-33 years. These figures are alarming, and the percentage of youth involved in drugs indicates how distressed they are.

Post the abrogation of Article 370 and conversion of the Jammu and Kashmir State into a Union Territory, the government has been promising development and making claims of a Naya (new) Kashmir which will see betterment in all aspects. When the country’s Home Minister Amit Shah visited J&K in October last year, he said he preferred talking to Kashmiri youth and “extend a hand of friendship” to them and sought their “support and co-operation for peace and development” in Jammu and Kashmir. The Government of India needs to demonstrate what practical steps it has been taking for the youth in the valley, for their betterment, and their role in strengthening infrastructure and bringing about development. It is disheartening to see that rather than pulling the drowning youth from the sea of unemployment, the government has been taking bizarre steps which hamper their claims of positive development in the Union Territory. Instead of fostering plans and policies for the employment generation, the initiatives taken by the government in the name of progress only push the people in general and youth in particular to the brink of unemployment, joblessness and hopelessness. The situation becomes dire as the people have no representatives to represent them at the national or UT level. There is neither the promised statehood nor peoples’ representation in the government, leaving the people with no choice but to tackle the consequences of economic collapse and unemployment themselves. The government of India should show a keen interest in restoring all the rights of people and come up with plans, policies, and strategies, which not only promise development in general and employment in particular, not merely on paper but factually on the ground. Moreover, policies and schemes already implemented need a review with the people for whom these are meant — be it students, job aspirants, businessmen or artisans. An effective administration with keen interest and robust work on the ground is the need of the hour to pull Jammu and Kashmir out of shackles of unemployment to the oceans of peace and prosperity.

Meer Nida is pursuing her Masters in English literature from Jesus and Mary College, University of Delhi, and Salman Jeelani is a final year student of English Honours at Islamic University of Science and Technology, Kashmir

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Major industrial activities in J&K – II



J&K's major industrial activities

Dhaar Mehak M

Major industrial activities in J&KThe informal sector is the part of an economy that is not registered with the relevant government authorities. The birth and growth of this sector is non-linear and follows no set pattern or the existing theoretical prediction. The empirical investigation following the developmental paths and trajectories of various developed and developing nations shows that birth, growth, decline and death hasn’t been the same. While the experiences of developed nations validate the eventual decline and end of the informal sector, the experiences of developing nations put the informal sector in an important position to usher in the process of industrial development.

In the developmental context of India, the informal sector has been an important source of providing sustenance to families, generating employment and meeting the local demand. Given the limited availability and access to public resources at the national level, the government policy and public sector have not been able to cater to the needs and demands of the people. As a coping strategy and a way out, people have found their ways towards the informal sector engagements. Over time the sector has rather shown an overall growth across the nation as against the prediction of the theories visualizing an end of this sector as one of the pre-requisites of development.

Agriculture for years has been a dominant economic activity in the region however mountain agriculture is not able to come out of subsistence to commercialization. As a result the returns from this sector have been low, pushing people out from it. Tourism has been another comparative advantageous economic venture in the region. Fragility and political instability has kept this sector from flourishing. As a result, people in J&K have steadily been pushed into the informal sector.

In Jammu and Kashmir, the trend corresponds to the national level evidence. The informal sector in the region has also registered growth over time as is validated by various national level data-sets including the NSSO and PLFS. Agriculture for years has been a dominant economic activity in the region however mountain agriculture is not able to come out of subsistence to commercialization. As a result, the returns from this sector have been low, pushing people out from it. Tourism has been another comparative advantageous economic venture in the region. Fragility and political instability have kept this sector from flourishing. As a result, people in J&K have steadily been pushed into the informal sector.

The Table ranks the dominant activities in the informal sector in Jammu and Kashmir as per the latest data availability. The ascendancy of these units points to their viability as low risk and viable profit ventures. Like the formal sector, the informal sector too mainly consists of need-based units. Most of the units deal in the retail sale of household perishable goods. These units which are in the form of shop establishments are found in all the localities of the region across rural and urban belts.

There is always business viability associated with these types of ventures. People from the households prefer to buy groceries from the nearest possible retailer and thus the normal profit is the least and assured return promised by these types of businesses. Tailoring activities rank just next. Given the changing seasons in Jammu and Kashmir and the distinct clothing style of both men and women, they prefer to stitch their clothes than buying ready-made and at the same time need different fabrics across the seasons. The investment in these ventures is small and can be household-based too. At the same time, this sector has the potential to empower women through household-based flexible employment.

J&K's major industrial activities

Being a consumer economy, the demand for all types of goods is very high in the region across the year, opening scope for the transportation industry. Over time there has been the development of the trend among the locals to invest in the freight transportation sector at the individual level. Though very popular among the lower-middle-class sector it has come to witness some decline in recent times due to a number of natural disasters and political fragility shocks. The current viability to invest in the sector is not too high however a huge number of existing informal sector participants is involved in this business activity.

Another related sector ranks just next. Despite the loss faced by the tourism sector the demand for Jammu and Kashmir tourism still exists in the country and across the globe. As a result, the taxi service in the region has been yet another promising venture in the informal sector. The use of taxi services has been rather limited among the people and startups like Kehwa and Jugmu cabs for the general public have just begun.

To begin with, the current major potential lies in the necessity-based industrial ventures. Based on the level of investment in hand both formal and informal sector are equally viable. If given proper consideration based on entrepreneurial instincts and government support, the businesses mentioned in formal and informal sector are low risk ventures.

The development of the beauty industry in the region appeared late but grew quick. Women especially have been involved in this sector. Opening and growth of the beauty parlours and salons can be seen spanning across the lengths and breadths of the region. This sector has especially shown growth in the region. Many women have opened these ventures inside their household premises making their operation flexible and demand localized. The local embroidery styles including hand Tilla and Aari are very famous across the globe. Families have been involved in these skill laden trades and have been passing on the same.

Both the demand and supply are high and being skill-based this sector always promises returns to the participants. The beginning of restaurant and café culture is equally novel in the region, the growth equally rapid! This sector has lately been growing and receiving an immense response, especially from the youth population. The startups in this industry have been doing well and the potential still exists for further diversification.

The construction and allied industry in Jammu and Kashmir, especially the Kashmir region has always had high-end potential given the local demand. As a result, the informal sector has shown some considerable growth in the manufacturing, production and sale of items corresponding to this sector. From the wood-based requirements to furniture and flooring and beyond the potential of this sector is yet to be explored completely. Given the innovations, people at the micro and household level can get involved in the customization of these items and expect a genuine profit and growth of the business over time.

From the analysis of both the formal and informal sectors in Jammu and Kashmir, it can be seen that the scope and potential of industrialization in the region is very high but specific. To begin with, the current major potential lies in the necessity-based industrial ventures. Based on the level of investment in hand both formal and informal sectors are equally viable. If given proper consideration based on entrepreneurial instincts and government support, the businesses mentioned in the formal and informal sectors are low-risk ventures. The future policymaking should be informed about the specific business potential in the region and the industrial policy push can be given based on these considerations.

Specialising in the industrial process of J&K, the author is a Senior Research Fellow in the University of Kashmir’s Economics Department. She can be reached at [email protected]


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Major industrial activities in J&K – I



Major industrial activities in J&K

Dhaar Mehak M

Major industrial activities in J&K The economy of Jammu and Kashmir is known for its ironic characteristics. Being a mountainous region the agricultural potential does not go beyond subsistence. Climatic extremities with geographic remoteness limit the viability of the industrial sector. The services sector like the rest of the nation has been pacing up. The contrary facts include a low incidence of poverty in the region as compared to the rest of India. Low levels of inequality and possession of some or other assets by every household. All this comes in the business environment of fragility characterised by conflict. The major business shocks in the previous decade can be broadly summed up as (i) the 2010 agitation resulting in mass lockdown, (ii) 2014 flood, (iii) 2016 agitation, (iv) blanket curfew of 2019, and (v) ongoing sprouts of pandemic lockdowns since 2020.

All these features can be visualized through two lenses. The first and obvious one that of loss of economic opportunities. The second one not so obvious is the resilience that has developed among the people over time. Given the fragility in the region that has lasted for decades on a stretch, the businesses having the least shock resistance have ceased to exist and the businesses having the resistance to face the jolts and challenges have continued to exist.

The business viability in Jammu and Kashmir is focused on necessity-based goods over any other type be it non-necessity items or luxuries. Jammu and Kashmir continues to be a hotspot consumer economy feeding on the output from the industrialization process concurrent with the rest of the county. This increases the leakages from the local economy, boosting the rest of the nation. As a result, the overall growth in general and industrial growth, in particular, in a crippled form currently.

Every economy consists of the formal and informal sectors. On the same lines, the economy of Jammu and Kashmir can be bifurcated into the formal and informal parts when it comes to major economic activities excluding agriculture. Broadly the formal sector can be defined as the firms that are registered with the relevant government authorities and have fixed working hours and wages. This part of the economy is stark visible and open to scrutiny all the time. On the contrary, the informal sector is hard to locate and lacks features like formal registration, fixed wages and working hours, labour unions and formal channels of business.

State-level secondary data shows that the major economic activity that has continued over time in the formal sector is the manufacturing of insecticides, rodenticides, fungicides, and herbicides etc. The reason for the persistent survival of these units is the inelastic demand for their output. Jammu and Kashmir economy is predominantly an agrarian economy and lately has been turning into a horticulture economy. Given its association with the land, it is unmoved by factors like conflict and pandemics. Thus, the viability of this business in the region is the greatest with a fair possibility of supernormal profits given the excess of demand for the output as compared to the existing level of supply in the region.

This is followed by the flour mills. The demand for flour in the region is high as people habitually as a matter of culture consume approximately three teas a day. The tea in the region unlike the rest of the country is taken with either homemade or ‘Kandur’ made roti. This factor keeps the demand for flour inelastic in the region and the business turns out to be shock resistant. In the region, several households prefer to go directly to the mill and buy fresh flour than to buy the packed versions from the store. This business, though small in scale has sustainable potential in the region.

The manufacturing of allopathic medicines and allied goods is also a viable and sustainable business here. Given the necessity-based demand for the goods produced by these firms, no kind of shock impacts the demand for the medicines. In light of the harsh winter, a high-intensity conflict in the past and the current pandemic people in Jammu and Kashmir tend to hoard and stock medicines that last for more than a month. At the same time, the frequent change in weather throughout the year makes people more vulnerable to seasonal illnesses like flu and the common cold. This factor has always kept the demand for regular medicines high. The Kashmir region especially has a culture of having high-fat foods, dairy products, spicy and sweet foods all leading to diabetics and high blood pressure. These factors additionally contribute to the high demand for pharmaceuticals in the region.

Major industrial activities in J&K

The mountainous geography coupled with harsh climatic conditions increase the wear and tear cost of the transport goods. As a result, people have to take extra care of their vehicles. This increases the potential of the businesses to sustain that deal with the maintenance and repair of motor vehicles. One of the basic characteristic features of the local population, predominantly in the Kashmir region is owning at least one motorized vehicle per household. Given the experience of the locals with uncertainty and the frequent shutting down of the public transport because of the same has made the motorized vehicle a basic necessity in the region. The existence of more vehicles in a region points out the high demand for maintenance for the same thus the viability of the business in the region. Another business sector closely associated with the geographic, climatic and conflict-related conditions is the need and necessity of the Kashmiri households to have a permanent, pucca and owned roof over their head. This has spiked the demand for all the raw materials used in the construction of the house. Now that the construction process has modernized the demand for cement is higher than ever-increasing the viability of this type of business activity in the region.

Demand for power generators is high in the region because of the lack of regular electricity. Though Jammu and Kashmir has a very high potential for hydro-power, a number of technical and political factors have kept it from the Pareto-improvement. As a result, the region has been facing a severe shortage of electricity, especially in the winters. To keep the houses and offices lit and warm the demand for alternate sources has always been high. As a result, the viability of the firms manufacturing and assembling power generators is high in the region.

For the local youth seeking entrepreneurial ventures, the good news stand hidden as a blessing in disguise. The necessity goods industry has a huge scope of potential with the least risk of failure. The indigenous formal industrialization process in Jammu and Kashmir can begin with the startups producing the inelastic necessity goods.

While having more and different types of clothes is a luxury for people across most parts of the country, it is a necessity in this part. The frequent change in climate and four strongly different and influential seasons demand different types of clothes. Extreme weather in January declines to minus 10 degrees sometimes while summer goes beyond 30 degrees. The poorest of the poor need accommodating clothes. At the same time by tastes, an average Kashmiri is highly considerate about what (s)he wears. These factors have always sustained the viability of the clothing industry in the region. The demand is very high while the supply is extremely short. The clothes market of Kashmir has been the hotspot of producers across the country. Consequently, the importance and viability of this particular type of business can’t be ruled out from the high viability rating.

There are a limited number of places where the Willow tree grows. As a matter of comparative advantage, Kashmir is one such region. The highest demand for Willow wood comes from the cricket bat industry. However, the lack of relevant policy intervention from the government and a lack of market boost have crippled the sports goods industry in the region for a long time continuing to date. In light of the same, one of the prime business segments in the region is the sports goods industry. In the current state of affairs, the potential is very high but the current situation is way below efficiency. A relevant policy intervention can change the whole potential of this business and increase the overall viability of sports goods production in the region.

It can be concluded that the business viability in the region of Jammu and Kashmir is focused on necessity-based goods over any other type of good be it non-necessity items or luxuries. Jammu and Kashmir continues to be a hotspot consumer economy feeding on the output from the industrialization process concurrent with the rest of the county. This increases the leakages from the local economy, boosting the rest of the nation. As a result, the overall growth in general and industrial growth, in particular, is in a crippled form currently. However, for the local youth seeking entrepreneurial ventures, the good news stands hidden as a blessing in disguise. The necessity goods industry has a huge scope of potential with the least risk of failure. The indigenous formal industrialization process in Jammu and Kashmir can begin with the startups producing the inelastic necessity goods. … to be continued …

Specialising in the industrial process of J&K, the author is a Senior Research Fellow in the University of Kashmir’s Economics Department. She can be reached at [email protected]

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