Research & Analysis

Impediments to J&K’s industrial growth

The Union Territory of Jammu and Kashmir which is located on the extreme of Northern India is famous for its scenic beauty and fascinating landscapes all over the world. Agriculture has been the chief sector of its economy, employing a major portion of the total work force of the territory. Due to limited cultivable land and severe agro-climatic conditions, the development of agriculture at large scale is ruled-out in the union territory. The peculiar physical conditioning of the state, like, extreme location, difficult mountainous terrain, transportation bottlenecks and extreme climatic conditions which cannot be improved upon except transportation to some extent, limits the scope for industrialisation where state does not enjoy the advantages of natural resources. Such industries can be taken-up at a very small scale mostly to cater the local demand.

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After independence, the Indian Union chose the socialistic pattern of society. The term was mentioned in the second five year plan as “fundamentally this means that the basic criterion for determining the lines of advance must not be private profit but social gain, and that the pattern of development and the structure of socio-economic relations should be so planned that they result not only in considerable increase in national income and employment, but also in greater equality in income and wealth”. The benefits of economic development must accrue more and more to the relatively less privileged classes of society and there should be a progressive reduction in the concentration of income and wealth. The country decided not to follow a policy of total nationalisation, but favoured to operate with the framework of a mixed economy, however they assigned a greater role to the public sector. To realise these socialistic objectives, the country commenced the economic development in a planned way. The planning commission of India got established in 1950 and entrusted with the task of formulation and the implementation of five-year plans. Being one unit of the Indian Federation, the state of Jammu and Kashmir, as other units of the federation, followed a socialistic pattern of society. From the quantum of central assistance, the requirements of Jammu and Kashmir, Assam and Nagaland were met first and then, the balance was distributed among the remaining States and Union Territories. Approximately, 30 percent of central assistance was given in the form of grant and the balance by way of loans. Further, by the end of 1994, the Central Government had just invested 0.91 per cent of the total investments in central public sector in the State.

The per capita plan investment in Jammu & Kashmir was found to be higher even than the national average. Still, its economy had to contend with a retarded growth. There is no denying the fact that the cost of raising infrastructure in the State is much higher than in other States. Therefore, in actual terms, the per capita investment may not be as high as it apparently appeared. The process of Industrialisation in the state was started on a planned basis aiming at achieving the development mostly on socialistic pattern. The sectoral allocations under different plans reveal that industry and mining has received very low share as compared to other sectors right through the First plan to the Eight plan.


Also Read: J&K: An agrarian history


 

Power development and social services sectors have got most of the investable funds under all the plans, following which a series of hydro-electric projects were taken up in Jammu & Kashmir over the years. At the same time, a number of social sector schemes also received a focussed attention. However, the investments in industrial and mining sectors under various plan periods lagged behind than that of the country’s average investment as a whole in these sectors.

On the positive side, the state is well endowed with some proven natural resources, like limestone, gypsum, quartzite, coal and lignite and also rich in forest resources, and in some agricultural and horticultural produce. However, majority of the natural resources like forest and minerals existing in the state have largely remained unexplored and untouched. Due to temperate climatic conditions, it is the only place in the country highly suitable for rearing uni-voltine and bi-voltine silk worm races which are famous for high quality silk. The definite comparative advantage enjoyed by the state in these natural economic resources provides a sufficient scope for industrialisation in the lines based on these resource endowments.

The state is also gifted with world-famous health resortsand historical legacies in craftsmanship skills, thus enjoying a distinct and important place in tourism and handicraft industry. Thereare a number of incentives and supporting services that are available to the industries in the state. A web of banks has appeared across the geographical area of the state. Moreover, a network of institutions has been created to promote the development of industries in the state. Further, economic, environmental and competitive conditions in theStateare not favourable to conducive industrial environment. However, the greatest weakness to the conducive industrial environment in the state has been its undesirable socio-cultural imperatives. Industrial infrastructural facilities in the state has remained far from satisfactory,particularly in Kashmir valley. Electric power is in short supply, railway networking is missing, capital scarcity, some technical skills are not available locally and peace essential for smooth functioning of the industries is absent in the state. The state has remained unfortunate with regard to its political stability right from 1947. The state still remains the bone of contention between India and Pakistan and so far, many wars have been fought by these two countries over Kashmir. The political uncertainties are looming over the state. Further, the entrepreneurship skills which are highly essential for better utilisation of natural bounties are almost scarce in the state. The youth of the state in particular, in Kashmir Valley have shown little preference toward entrepreneurship. It is also that the state is overlooking the need for entrepreneurial development. The above deficiencies in the industrial environment can be improved upon without any difficulty which calls for both political and administrative will. Power supply, technical skill base and entrepreneurship is expected to improve in the years to come, however, political uncertainties seems unlikely to settle down to its logical conclusions in the near future.

 

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