JK economic scenario

Prof. Y P Sharma
The territories of Jammu, Kashmir, Ladakh and Gilgit form the State of Jammu & Kashmir. The State of Jammu & Kashmir which had earlier been under Hindu rulers was ruled by Afgans for some time before it was annexed to the Sikh kingdom of Punjab in 1819. In 1820 Maharaja Ranjit Singh handed over the territory of Jammu to Gulab Singh. In 1846 Kashmir was also given to Gulab Singh under the treaty of Amritsar. Ladakh was annexed by Maharaja Gulab Singh in 1830. Thus, this northernmost State was founded by Maharaja Gulab Singh in 1846 and was the biggest princely state in India before the partition of the country in August, 1947. The total area of the State is 2, 22,232 sq. km with certain portion under illegal occupation of Pakistan and China.
On the map of India, the State of Jammu & Kashmir looks like a crown. To its north lie China and Russian Turkistan. On its east is Chinese Tibet. On the west is the North West Frontier provinces of Pakistan, China and Russia. The nearness to the boundaries of foreign countries has made the position of the State most important from military angle.
The natural beauty and picturesque locations have made it a favoured destination for tourists across the world. Jammu is famous for its temples while the Kashmir valley is known for its lakes and gardens. During 2016-17 the total number of foreign tourists in J&K was recorded to be around 25 thousand. In addition, the number of pilgrims to Shri Mata Vaishno Devi is quite large.
J&K has agro- climatic conditions best suited for horticulture and floriculture. Horticulture is the mainstay of the rural economy providing employment to large number of local inhabitants. Apple production in the State reached 1.73 million metric tons (MT) in 2016-17. The State is also a major exporter of walnut and its international market share is about seven per cent.
At the current prices, the gross state domestic product (GSDP) of Jammu & Kashmir grew at 14.9 per cent to reach USD 22.64 billion in 2016-17. As of October 2017, J&K had a total installed power generation capacity of 3,297.28 Megawatts (MW), comprising 1,733.43 MW under central utilities.
The State Government has an industrial policy that offers attractive incentives along with a single- window clearance mechanism. Land is allotted at concessional rates in industrial areas on lease for 90 years. The cost of setting up operations is comparatively lower than other states. The Skill Development Policy 2012-17  and the Sher-e-Kashmir Employment and welfare programme for the Youth 2009 are the policies undertaken by the government to develop the skills of the indigenous people of the state and offers better employment opportunities. J&K stands 29th among Indian states in ranking based on ease of doing business and reforms implementation, according to a study by the World Bank and KPMG.
The State of J&K like Chandigarh, Punjab and Haryana has attracted Foreign Direct Investment (FDI) equity inflow worth USD 6 million during the period April 2000 to June 2017 according to data released by Department of Industrial Policy and Promotion (DIPP).
Economy of Jammu & Kashmir is predominantly dependent on agriculture and allied activities. The Kashmir valley is known for its sericulture and cold water fisheries. Wood from Kashmir is used to make high quality cricket bats popularly known as Kashmir willows. Kashmir saffron is very famous and brings the state a handsome amount of foreign exchange. Agricultural exports from Jammu & Kashmir include apples, barley, cherries, corn, millet, oranges, rice, peaches, pears, saffron, sorghum, vegetables and wheat while manufactured exports include handicrafts, rugs and shawls.
Horticulture plays a vital role in the economic development of the State. With an annual turnover of over Rs. 3 billion (USD 47 million), apart from foreign exchange of over Rs. 800 million (USD 12 million), this sector is the next biggest source of income in the state’s economy. The region of Kashmir is known for its horticulture industry and is the wealthiest region in the State.
Doda region has deposits of high grade sapphire. Though small, the manufacturing and services sector is growing rapidly, especially in the Jammu division. In recent years, several consumer goods companies have opened manufacturing units in the region. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has identified several industrial sectors which can attract investment in the State and accordingly, it is working with the union and the state government to set up industrial parks and special economic zones. In the fiscal year 2005-06 exports from the State amounted to Rs. 11.5 billion (USD 180 million). However, industrial development in the state faces several major constraints including extreme mountainous landscape and power shortage. The Jammu & Kashmir Bank which is listed as S&P CNX 500 Conglomerate is based in the state. It reported a net profit of Rs. 598 million (USD 9.3 million) in 2008.
The Government of India has been keen to economically integrate Jammu & Kashmir with rest of India. The state is one of the largest recipients of grant from New Delhi totaling USD 812 million per year. It has a mere 4% incidence of poverty- one of the lowest in the country.
The major economic activities in the State include–
i)   Tourism
ii) Major Crops [Apples, Walnuts, Almonds, Cherries and Pears]
iii) Handicrafts [Kashmir Rugs (Carpets) ; Kashmir Shawls &  Stole ( Women’s Shawls ) ]
iv)  Wood Carving (Scandinavian Flat – Plane, Caricature Carving, Chip Carving & Whitting )
Militancy in Jammu & Kashmir may have severely damaged the economic structure of the State but has not been able to decimate it. While the State remains dependent on the Central grants, parts of economy have not survived but thrived. The production and sales of handicrafts and agro- products ensured that the state maintained its economic activity. The state’s infrastructure lies in ruins, more is being spent on government personnel than on development. There has been flight of capital from medium and large units. Small scale sector is plagued by sickness but in the midst of scenario exports from the State rose from 150 crore in 1989-90 ( when the militancy spread its tentacles), to Rs. 1150 crore in 2005-06. It is likely to exceed Rs. 1500 crore in the current fiscal.
In economic terms the buoyancy in the handicrafts, fruit, horticulture and agro- products, especially carpets, seems to have offset the losses in tourist trade. In the initial couple of years after the militancy set in, the sales of handicrafts plummeted as there were no tourists in the State to buy the products. The traders then spread out and set up a network of shops in the country to sell their wares, experts say. It was supplemented by the efforts of the government which organized special exhibitions in the cities like Delhi, Udaipur, Chandigarh, Bangalore and Ahmedabad to provide sales outlets to the producers.
The economy of the State is fast growing, but still there remains a lot to be done. The role of un-organized sector in economic development of the State has been significant. Government must come forward with certain new policies to give a boost to the economy of the state. National Bank of Agriculture & Rural Bank (NABARD); Industrial Credit & Investment Corporation of India (ICICI); Small Industries Development Bank of India ( SIDBI ) and other such agencies must  step ups to contribute towards the economy of Jammu & Kashmir.
(The author is Professor  & Head of                  the Department of Commerce Govt. Post Graduate College Rajouri)


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