Despite plenty of raw materials and huge availability of manpower which would have created a niche in certain sectors for the UT, Kashmir is facing acute economic underdevelopment and unemployment problem.
A place, which has plenty of both natural resources and human capital – two key ingredients for industrial progress – lacks in industrial development as well as uplifting its people. This kind of situation can only be defined as the worst ineptitude of the policymakers and people at the helm of affairs.
Leaving aside the big industries, just talk of a small industrial sector and its employment generation and economic potential. Kashmir being a voracious meat-eating place in the country, around 70-80 lakh animal hides, mostly sheep and goat, are produced annually. In fact, about 8 lakh hides are produced on the day of Edi-al-Adha only.
But due to lack of tanneries and other facilities for leather processing, more than 98 percent of these hides are exported unprocessed. Later some of these animal skins are bought back from different tanneries of Punjab, Haryana and Utter Pradesh in the shape of the finished leather to suffice the needs of whatever little leather production units, mostly the handmade ones, we have here to produce jackets and other leather items.
As per the estimates given by the traders, if the leather industry is developed with tanning and other processing up to the finished product level it can turn into more than a billion-dollar (Rs 10,000 crore) sector annually creating an unimaginable number of jobs.
A similar situation is faced with the 10,000 metric tons of wool produced annually. Not even one percent of the wool produced in Kashmir is processed here despite Kashmir having huge demand for woollen products due to cold climatic conditions.
While we sell these raw materials at throwaway costs and repurchase finished products worth billions, we also lose thousands of jobs and losses in billions due to lack of policymaking and wrong priorities.
And another key ingredient vital for developing this kind of industries is investment and Kashmir does not face the problem for that. As per the credit-deposit (CD) ratio of J&K, for every hundred rupees deposited in a bank, only Rs 45 are invested back or given as credit in the state. While Rs 55 are either invested outside the state or remain with the banks.
If the government can provide policy and planning, Kashmir can not only create the required jobs within the state but will bring economic prosperity and a favourable credit deposit ratio for the state.
Government and policymakers need to prioritise the development of the wool and leather industry, as there is plenty of raw material available for the same.
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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