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Major industrial activities in J&K – II

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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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Economy

Major industrial activities in J&K – I

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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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KU’S Economics Deptt lauds Tanveer for securing second rank in IES  

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Economics Deptt lauds Tanveer

Srinagar,  Aug 1:  Kashmir University’s Department of Economics congratulated it’s alumni Tanveer Ahmad Khan for securing All India Rank-2 in the prestigious Indian Economic Services (IES) 2020.

Tanveer a student of batch 2016 -17 is the first candidate to qualify All India Economic Services Exam, which is an extremely professional service engaging with economic administration and development policy implementation.

Department of Economics is one of the oldest economics departments in North India. “It has a tradition of training extremely talented students and scholars. Remarkably, over the recent past our students have made it to the highest research centres and Universities across India and abroad,” it said in a statement.

“Within J&K our students constitute the majority in Higher Education, Department of Planning as well as in the Subordinate Services.”

In this march towards excellence this rare feat achieved by Khan is going to give a new “big push” to the efforts underway at the department to scale new heights in shaping the future of extremely talented youth, said HOD Economics Department Prof Imtiyaz Ul Haq.

The entire faculty, supporting staff, students and alumni of the department congratulate Tanveer Ahmad Khan and wish him all the best for his future.

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National Statistics Day: Status of ‘End Hunger’ in J&K

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Status of ‘End Hunger’ in J&K

Altaf Hussain Haji

Crowdfunding for businesses in J&KHunger is a burning issue for every UN member country. This is the reason that commemorations of this year’s National Statistics Day in our country has been aligned to create awareness about hunger as per the UN target of Sustainable Development Goals. In India, Statics Day is celebrated every year on June 29 in remembrance of Prof  PC Mahalanobis for his contribution in the field of economic, planning and statistics. The theme of this year Statistics Day, June 29, 2021, is ‘End Hunger, Achieve Food Security and Improved Nutrition’. Hunger and malnutrition badly affect the development and wellbeing of the States/UTs of the nation and the progress of the reduction of percentages of hunger at the national level is still off track. Jammu and Kashmir is also among one of the UTs where hunger exists as per the current report of SDG released by the government of India. There is also a long road ahead to reduce hunger and malnutrition by or before 2030 in Jammu and Kashmir.

Undernourishment, malnutrition and wasting are different ways of hunger found in every country in the world. Undernourishment occurs when people do not intake enough calories to meet minimum physiological needs. Malnutrition is caused when the peoples have an inadequate intake of protein, energy and micronutrients. The third way of hunger is wasting which usually the result of starvation or disease of acute malnutrition with substantial weight loss.

 Status of ‘End Hunger’ in J&K

As we know that second goal of Sustainable Development with agenda Zero Hunger is one of the important goals out of 17 Sustainable Development Goals. It is to mention here that the United Nations (UN) General Assembly held on September 25,  2015, adopted the document titled “Transforming our World with the 2030 Agenda for Sustainable Development”.  The SDGs are a comprehensive list of global goals integrating social, economic and environmental dimensions of development. Zero Hunger is the second Sustainable Development Goal (SDG2) with the aim to end hunger, achieve food security and improved nutrition and promote sustainable agriculture. The SDG2 has 7 targets such as beneficiaries covered under the National Food Security Act (NFSA), 2013, children under five years who are underweight, children under five years who are stunted, pregnant women and adolescents aged 10- 19 years who are anaemic, the rice and wheat produced annually per unit area (Kg/Ha) and Gross Value Added (constant prices) in agriculture per worker (in lakhs/workers)  to measure the availability of food, improvement in nutrition and promotion of sustainable agriculture respectively.

The composite index score of the UT Jammu and Kashmir in SDG-2 goal has improved by 8 points from 62 in 2019-20 to 70 in 2020-21 as per SDG report 2020-21 released by NITI Aayog.  The UT Jammu and Kashmir among the Seven States and four UTs bagged a position in the category of Front Runners and said as the increase in overall score, the Jammu and Kashmir in Sustainable Development Goals will achieving Zero hunger in time.

Here are some indicators of Jammu and Kashmir in comparison at national level figure regarding the progress of End hunger by or before 2030 of the agenda of SDGs.

At the national level the percentage of beneficiaries covered during 2019-20 under the National Food Security Act, 2013 ((NFSA) is 99.51 percent and for UT Jammu and Kashmir, it is 97.02 percent achievement as the target fixed to achieve it 100 percent by 2030.

At the national level, the percentage of children under five years who are underweight is 33.4 percent and for UT Jammu and Kashmir, it is 13 percent as the target to reduce it 1.9 percent.

At the national level, the percentage of children under five years who are stunted is 34.7 percent and for UT Jammu and Kashmir, it is 15.5 as the target to reduce it 6 percent.

At the national level, the percentage of pregnant women aged 15-49 years who are anaemic is 50.4 percent and for UT Jammu and Kashmir, it is 38.1 as the target is to reduce it  25.2 percent.

At the national level, the percentage of adolescents aged 10-19 years who are anaemic is 28.4 percent and for UT Jammu and Kashmir, it is 15.8 as the target is to reduce it to 14.2 percent.

The rice and wheat produced annually per unit area (Kg/Ha) was found 2995.21 Kg/Ha at the national level and for UT Jammu and Kashmir it is 2339.65 Kg/Ha as the target is to achieve it 5322.08 Kg/Ha

The Gross Value Added (constant prices) in agriculture per worker (in Lakhs/worker) was calculated as 0.71 at the national level and for UT Jammu and Kashmir, it is 0.88   as the target is to achieve it 1.22.

The above indicators pertaining to Jammu and Kashmir showed that there is still a long road ahead to reduce hunger and malnutrition by or before 2030 in Jammu and Kashmir and it is too difficult to achieve or reduce targets due to disturbance and law and order situation, unique features and a strategic location. Further, the index score at the national level for end hunger is 47 while UT Jammu and Kashmir have 71 which seems that the situation is somehow better.

As UT Jammu and Kashmir have unique features and a strategic location, the speedy sustainable development of Jammu and Kashmir needs an integrated approach. The top priority of the government should be to create a secure environment by improving the law and order situation. State finance should also receive proper attention in order to ensure better fiscal management. A sound policy should be devised to exploit the potential in the sectors of strength. In a nutshell, sound policy and good governance can lead the UT of Jammu and Kashmir to a faster development path and is able to achieve the SDGs well in time. Further, there should be a sizable increase in the utilisation of funds for rural development schemes in the UT and the pace of implementation of programmes needs to be accelerated.

Also, efforts are needed for the development of infrastructure, generation of employment and alleviation of poverty in rural areas to bring about the desired socio-economic development of Jammu and Kashmir.  There is also an urgent need to undertake an impact assessment study of the schemes implemented by the government on the socio-economic conditions of the people. Such a study would help in assessing the ground realities of the impact of various schemes on the social and economic conditions of people inhabiting these areas.

At the last, I want to mention here that by working on SDG2 last few years, the measures are taken such as promoting sustainable agriculture, supporting small-scale farmers and creating equal access to land, technology and markets in order as a fundamental rule to the eradication of hunger in Jammu and Kashmir, a number of initiatives have been taken by the Government of India and UT government to ensure food for all and has launched food security programmes owing to the National Food Security Act, 2013. The stress on sustainable agriculture may be observed from the fact that one of the missions under the National Action Plan on Climate Change (NAPCC) is the National Mission on Sustainable Agriculture (NMSA). In the end, as per the current report, UT Jammu and Kashmir have made significant progress in the area of food security despite having several challenges.

Altaf Hussain Haji, ISS, is Deputy Director General National Statistical Office, Shimla. He can be contacted at [email protected]

 

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