Unlike many states, especially the developed ones, it is the government in J&K that is the biggest spender. By an average, not less than Rs 10000 crore are spent by the state government alone. If the expenditure that various central government organizations are booking in Kashmir, is added, especially in the development sector, it become a substantial investment for a place with a population of less than 13 million.
But everybody is worried why this huge expenditure is not creating jobs as it does in other states. Does J&K lack willingness to grab the jobs the investment creates? Are the companies which spend on state’s behalf unwilling to share part of the ‘booty’ with the people they apparently work for? This riddle has evaded answers from the best policy makers in Srinagar and Jammu.
But trade has a different take. In most of the mega projects in all sectors – power, roads, constructions, the trade says, they are not eligible. For most of the major projects the companies who are eligible need to have a huge turnover and the high-end core competence. Most of the companies and the businesses in J&K are small enterprises and mostly family run concerns. They are left out at the first stage.
Once the biggies bag the contracts, they slice the work in small sub-projects and outsource to local players. The cream goes to the successful bidders and the local players are left with fractions to manage it. Working with shoe-string budgets, the local players end up manage to keep the show go on. This is what exactly happened to the Srinagar bypass in which the bidders managed most of the job through locals.
Likewise in IT sector the government was routinely offering its jobs to the major blue-chips. As the local small players were seeking their bit, they lacked the status to even bid for them. Finally, they created a consortium that made them eligible to bid for government works. But techies have proved to be an exception.
In the power sector the government got all the big players for implementing a major project, locals felt left out. Finally the government suggested the companies to procure material locally especially the transformers. As the new system was implemented, trade traced companies purchasing material from Jammu manufactures. This was despite the fact that Kashmir producers some of the best high end electric transformers in north India that are supplied to far away states like Rajasthan.
Another major grey area is the lack of efforts for skill up-gradation. There are a number of such institutions funded by the government or sponsored by the financial institutions but there is no evident success. NHPC had promised to create an institute but it is much concerned to improve its generations. Unless the spending is not made directly proportional to the jobs it creates, it is a job half done. As the state government is busy drafting its budget estimates, the policy makers must ponder over this perennial crisis that is becoming part of the governance culture.