The liberal industrial policy has led to the acceptance of around Rs 50K crore investment proposals in less than a year, of which Rs 3000 crore was negotiated during the 10-days Dubai Expo. Ranjan Prakash Thakur, the top industry policymaker, offers details of how this investment will create new assets and jobs and why the industry in Jammu and Kashmir will have to rediscover its competitive advantage
KASHMIR LIFE (KL): Dubai is so famous for Expos. So what happened in the one last week where Jammu and Kashmir had a huge presence?
RANJAN PRAKASH THAKUR (RPT): This Expo was not an ordinary one, it was a global exposition, taking place every four years and 190 countries and major companies participated in it. More than 10 million people have already visited this Expo. If Covid did not impact, the numbers will reach 25 million.
I had visited the Expo in Hanover 20 years ago. Asia witnesses a small number of Expos’ for limited financial resources. This Expo brings together the Gulf Corporation Council (GCC) countries and tourists from all over the world and in this 10-day event, we displayed and demonstrated the progress of Indian and in Jammu and Kashmir. This was not about the change that took place in Jammu and Kashmir recently. It was about displaying the heritage and culture of Kashmir. We displayed our capacity physically.
We had taken famous musician Padmashree Ghulam Rasool; we provide Kashmiri cuisine and we showcase Kashmiri items, beauty, and nature. On January 6, we performed jugalbandi (sort of a fusion in music) between Dogri and Kashmiri music. Two talented females participated from Kashmir and Jammu performed brilliantly. We displayed this jugalbandi in front of UAE residents and some Indian residents. We undoubtedly performed admirably and put up a spectacular show. We demonstrate Kashmiri heritage while also demonstrating current advancements.
KL: And many Memorandums of Understanding (MoU) were signed?
RPT: On October 18, DP World Chairman Sultan Ahmad Sulayem visited Kashmir, as did Commerce and Industry Minister Piyush Goyal, and we announced the MoUs. It was the follow up of the MoU that we signed in Dubai on October 8, with the highest authority. Under this MoU, the government of Jammu and Kashmir and Dubai decided about investments in Jammu and Kashmir in a variety of sectors including hospitals, hotels, logistics parks, real estate, and many other areas. Under this collaboration, investment from Dubai will be encouraged.
DP World Chairman personally flew to Kashmir in his personal jet, had breakfast with LG, and was very happy to see Kashmir. It was then that the MoU was displayed. DP World is one of the world’s top three-four companies.
We have already identified and for the dry port in Jammu and the next phase they will establish one in Kashmir. This will help us move our export cargo from Jammu and Kashmir to Dubai, wherefrom it will go to other destinations, such as America and Europe. We have cultural affinities with Dubai and a lot of people from Jammu and Kashmir live there so that is the advantage.
This is the hub and spoke model we have adopted to reach the larger world. This dry port will help us and by then we will have a railway line through by July 2023, after which containers will be moved to other regions of the world and communication will get properly established. Within 10 days a container from Kashmir will be able to reach Dubai.
We also signed an MoU with Lullu Group, a major retail chain in the GCC countries. It is the largest group of companies in the region. They acquire products and sell through their own chain. It also distributes the merchandise. We have started exporting to them already. Gucchi, the special Kashmir mushrooms are being sold through this chain right now. This chain will help us market the expensive and exclusive products from Jammu and Kashmir in Dubai and other markets.
We also signed an MoU with the Emaar Group that will develop mall and IT towers in Kashmir and Jammu.
We also signed another MoU with Noon.com, which is a competitor to Amazon.com and is promoted by Saudi Arabia and Dubai. This company will open its rare office within a month and will recruit 250 to 300 people.
Besides, we signed MoUs with two major supermarkets al-Maya and al-Adil. They will acquire their stuff from Kashmir as well. Our international cargo terminal will be ready within a month.
We already have a direct flight between Srinagar and Sharjah. Efforts are on to have flights to Dubai from Srinagar and Jammu and it must happen within two months. Pakistan refused to let the aircraft flying from Kashmir use its airspace so Kashmiris are unable to go to Dubai via Pakistan, which is ridiculous. Interestingly, people from Delhi can use the air space but not Kashmiris. We expect better sense will prevail and the Kashmiris will also get this right.
Century Finance will invest Rs 800 crore in Jammu because its promoter, Bal Krishan belongs to Jammu. Many Kashmiris living in Dubai are interested in investing in Kashmir in hospitals, hotels but I will not be able to name them because they are yet to formally sign the MoUs. There is a lot of interest in the hospitality sector. A major group Sharaf Group is also interested.
The LG met with DrThani, Minister of State for Trade, in which India and the UAE are negotiating free trade agreements. Dr Thani is committed to flying to Srinagar in March along with the Dubai ambassador in Delhi, Dr Albana, as Chief Guest on the (inauguration) of the Tulip Festival. Dr Thani would attend the celebration with a delegation.
It has also been announced that a global investor summit would take place in Srinagar in May that will be attended by investors from Emirates and Saudi Arabia. They are really interested in visiting and investing in Kashmir. They have affinities with Kashmir and they believe they can earn well here.
KL: In Dubai, around 10-15000 Kashmiris live and some of them are into business. Was there any outreach to them?
RPT: I won’t tell who, but many of them have already applied for setting up hotels, hospitals, and CS stores. We are about to allot them land. They are opening medical colleges, nursing schools, and five-star hotels. I can confirm that Kashmir-based groups are more active have a lot of money and are investing. Kashmir has changed, the situation has improved, there are no longer strikes, no internet outages or traffic is not off the roads. This is not so small, this is hugely encouraging. Some groups that had left Kashmir are returning back.
I have collected some data about air travel in December. Some groups have done record business in December. The highest number of flights in 2021 was in October – 1230, and November was 2400 and the higher number of visitors – both to and fro – were 3,31,000. In December, we had 3,24,000 visitors. Despite being cold, neither the number of flights was down nor the number of passengers, which indicates that everything is all right. I am not claiming false normalcy but I am giving you numbers. There is no hotel room available in Kashmir and no seats on flights. Barring a day, Srinagar witnessed 30 flights a day. The high fare that the sector was witnessing has changed. This has encouraged people and restored their confidence.
KL: How much investment do we expect from Dubai?
RPT: I am expecting Rs 3000 crore. Only Centuries Finance has committed the US $ 100 million. I do not go by MoUs because these can be signed and forgotten. The fact is that I visited Kathua on Sunday and saw the place of dry port that the DP World is building. I am an operations man, I saw the place, its ownership, and feasibility, and that is why I am announcing this. So these MoUs are real, it is sold Rs 3000 crore.
In the last 75 years, the overall investment has been slightly more than Rs 14000 crore. In the last seven and a half months, we have DPRs uploaded and people have paid their money for projects with an investment of Rs 45000 crore. I am not talking about MoUs, I am talking about DPRs. So I am talking about an investment of Rs 50,000 crore in a year! This investment you will see on the ground.
The package that the centre has given us was not given to any state ever. For every Rs 100 crore investment, the package will give you Rs 400 crore, which is four times the minimum value. How can anybody ignore this?
KL: Nobody is ignoring all this but the sense in Kashmir is that while the per capita income is getting down and purchasing capacity is in a free fall. So where is the balance?
RPT: Pandemic made world suffer and India did witness negative growth. So if the boat sinks, it will take everybody along. Kashmir is not excluded. We are attempting to come out of it and the Prime Minister is working a lot on this and has taken a variety of initiatives.
We are trying to deepen our development. Under KVIB and PMEGP, we created one lakh jobs in this financial year. We are investing Rs 50000 crore to create jobs. Apollo Hospital alone will create 1000 jobs in Jammu. One hospital bed creates seven jobs.
This investment is not for production, this is for new jobs. Investment is about asset creation and job generation and not production, which can happen anywhere else.
In the three years, I am creating 3000 beds in Kashmir which will fetch 10000 jobs. There will be good hospitals and students will study in Kashmir or Jammu. Why should our students go to Bangladesh, we will create infrastructure here and prevent this capital flight.
We are creating soft industries, not steel or cement plants. In industry, job orientation is the focus. I am highly choosy in picking the investment. We require the IT sector, hospitals, CA stores for horticulture. There is a conscious call that there we should not destroy the ecology of the place but get a soft industry that will benefit us for generations.
KL: Many local players accompanied you to Dubai. Was there some Joint Venture effort? Otherwise, the feeling on the ground is that only land is being taken?
RPT: I would want to share two things with you. One, the industrial estates at Lassipora, Khonmuh, and Khrew and other places are on the land that Government owns. Not even an inch of land will be taken forcibly, not even for industrial uses. Change of land use is an option and it is up to you whether you wish to change it or not. Nobody will force you.
For the sake of understanding, consider me a farmer with eight kanals of land that is located near a highway. I asked people about the returns from eight kanals in a year and nobody could calculate even one lakh rupees. So if you build an educational institute on the same land, you calculate how much money will you earn? World over the land is closer to the highway goes into the use of hotels, educational intuitions and industry, CA stores.
So we are unlocking the value of this land. You do not wish to change it, there is no coercion. There has never been a change in land use policy in Jammu and Kashmir so we brought in a time-bound transparent policy. I insist, there is no coercion and the government will have no role. It will not purchase anything but the government will create an enabling environment, Rest is up to you, you wish to sell or not to sell.
Now, let me ask you a question. I am from Bihar where the last Sultan of Kashmir is buried, I have visited his grave. Tell me how many Kashmiris have purchased land in Bihar? Perhaps none. Not even in Punjab where you can purchase. I have the option but I am not purchasing because I wish to live where I am living. This I am saying that there is no coercion and there should not be fear over this. The majority population of a place anywhere cannot be displaced. I am trying to dispel the apprehensions.
KL: But is there any hope of any JV between locals and the potential investors?
RPT: There were many. If Lulu comes, or a real estate company – who will work with them, collaborate with them? From whom will they purchase products?
Let me give you some news. Reliance is opening a global chain called Swadesh in which handloom and handicrafts would be marketed. Kashmir is becoming a major sourcing centre for this chain. We are exporting wool. In Rajbagh Silk factory, we have increased its capacity from 40,000 to 1.5 lakh. We have to integrate the economy with the bigger one.
The delegation that accompanied us, is returning after a lot of meetings. Syed Hamid of JKTDC is coming home after 15 meetings with the sole idea of how the tourists will reach Srinagar. We did a lot of publicity, why, because we want people to come, see Kashmir. Why are we inviting Dr Thani because he will come with hundred others. The world needs to recognize that Kashmir is a wonderful area where people must travel and do business with. That is exactly what we are doing. Unless there is talk, people do not start coming, see what Kashmir is all about and then the business will happen. I told there that paradise was lost and it is being regained. I said we are creating a situation where you can visit and do business.
KL: We have horticulture and handicrafts as key sectors? A lot of capital is blocked in handcraft inventory because of Covid19. Is there something happening in these two sectors with respect to Rs 50K crore investment?
RPT: We are promoting handicrafts, and Reliance was our first option. We are improving our capacity to sell. We are improving the capacity for wool and in Bemina, the facility is being expanded within a month. We already expanded in Rajbagh. Covid19 is a serious issue and a lot of people including secretaries are sitting at home. The economy is affected.
We are now going for promotional events like that in Dubia where we showcased Ghulam Rasool Sahib, Pashmina Shawls, Kani Shawls, and the method of carpet making so that the rest of the world could grasp the manufacturing process. The DP Chairman was unaware that the carpet is manufactured in Kashmir. It was shocking. He was happy to see it. We have to go for reach out. Because of Covid, our collaboration with Surajkund Craft Mela is cancelled where for the first time in 20 years, we were a partner state. We are attempting to promote the commercial sector.
We had some problems in Pashmina. Some machines we are installing in Srinagar. We will soon establish venues for exporting commodities from Srinagar to Sharjah and eventually to the Gulf market. We will improve logistics, create awareness and it must help.
KL: But some people who have already invested believe the industrial policy is exclusivist and not beneficial to them. They say if there is no intervention, they may go out of business?
RPT: We are intervening in a limited way because we do not have a lot of cash. The Home Minister, however, has stated that we need to invest in new areas, such as hotels because there is a scarcity of hotels in Srinagar. Many meetings were cancelled as a result of this. A meeting of commerce Ministry was cancelled because we had no adequate number of rooms available. We require hotels in Gulmarg, Sonamarg, and Pahalgam. We require hospitals, milk processing facilities, and CA stores.
I want to be honest. Many industries are no longer feasible. It was in a meeting. When this was a separate state and the local manufacturers were getting preferential support. It is not possible now because the economy has integrated. So we must do what we can do better. There is no possibility of having Gulmarg or Pahalgam in UP. I should create a cement plant here because I can do it in Madhya Pradesh or UP because it will impact the ecology. By doing this we will lose the competitive advantage that we have in Jammu and Kashmir – good environment and ecology and a local product basket.
I will use the term “creative destruction” which is part of life. In America, whenever a firm closes, ten more are established. We must accomplish the thing that will offer us rewards. This is creative destruction. It is simple, the products that are sold cheaper outside, we must get it. And the products that we can make better, we must do. Every state works in its own way and not every work is being in every state. Orissa has mines so they will go for tourism because they lack that weather. So we should choose things which we can do better.
There will be creative destruction on basis of which new industry will emerge. We produce 25 lakh ton apples of which only six lakh is A category so this must improve. Our CA store capacity is not even 1.5 lakh tones so we go for distress sale. So we must prefer the CA store over cement. So some factories will close because that is natural. We will still extend the possible support but they will have to defend the market on their own.
America is not a production-oriented country, but rather a technology-oriented one. Apple imports most of the items from outside but the money is earned by America.
So we must do things which we do the best. Change is not good because it pains but we must adopt a competitive advantage. At the same time let me ask you – can we survive without a change? We have to reorient ourselves. Some industries will not survive. For example, Bajaj Scooter does not manufacture scooters now. It is the world’s largest manufacturer of motorcycles. It more money is coming from Bajaj Finance. IBM is no longer producing hardware. So let us reorient ourselves. Times change so must we. Earlier there was no IT but we have it now.
(Insha Shirazi processed the interview)