MANAGING ECONOMY

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Omar did spare a lot of time to listen to the FCIK meetings but Qalander says the “follow up at official level was missing”.

The larger problem in the governing set up, says Punjabi is its failure in appreciating the reality that Kashmir remained in coma for more than two decades and lagged far behind in the overall growth story. “Now they want to implement the systems and procedures that are in place in Gujarat and elsewhere without accepting that the gaps need to be addressed first,” says Punjabi. “The survival of the industrial activity in trying circumstances is the real big story and there is nobody who could help in reviving the units that have gone sick because of the situation,” says Qalander. “Even now, we have many of the industrial estates fully or partially under the occupation of the security forces but who cares.”

Umer Khursheed Tramboo is the executive director of the Khyber Industries, one of Kashmir’s major industry groups, now in cements, milk, hospitality and healthcare. He is one of the few young men who studied abroad and took the first flight back home after graduating. “For all these years, I have been desperately seeking and suggesting that why in this part of the world we cannot have policies about areas and sectors which could help entrepreneurs plan their investment,” Umer said. He says it is ridiculous that a state getting more than one crore of tourists in Ladakh, Kashmir and Jammu cannot have a solid tourism policy. “While single window clearance is just a routine in all other states, why cannot it be possible in J&K as well?”

Umer Khursheed Tramboo

J&K is a peculiar economy. Barring certain manufacturing bases in Jammu, Kathua and Samba, it is one of the surging consumer markets in the region. From eggs to mutton, clothes to shoes, almost everything comes from neighbouring states especially Punjab, Haryana, and Delhi. J&K consumes around 75000 metric tonnes of food brought from outside in addition to the 1.6 million mts it produces a year. “We are a market worth around Rs 35000-Rs 40000 crore a year,” says lobbyist Shakeel Qalander. “And there are concerted efforts to blunt the possibilities of import substitution.”

This has created a situation that the government is the ultimate spender and the employer of last resort. The policy interventions that could trigger changes also rests with the government. Private investments are low and almost piggyback the public spending by one or the other way.

For the current fiscal, J&K would be spending Rs 31212 crore, more than 8.63 percent than 2010-11 and a whopping 73 percent of it is the revenue expenditure leaving barely 27 percent for the development. Of this Rs 15916 crore (50.99%) goes to salary, pensions would require Rs 2651 crore and red PSUs would require grant in aid of Rs 727 crore that eventually gets consumed as salary. Besides, Rs 1174 crore will go for debt re-payment and an additional Rs 2363 crore is the debt servicing. “Salary is going to be a real big crisis as we anticipate the wage bill touching Rs 27000 crore by the end of twelfth plan,” says a very senior officer posted in a high office, insisting that “it is unviable and unsustainable in long term.”

For 12548926 people living in J&K (2011 census), this much of expenditure on salaries of around half a million souls is a huge investment. It has created classes of its own. If per capita income of the state and central government employees is calculated separately then almost two-third of the population of the state hovers around the BPL standards. The situation arising out of this state of affairs is that securing government employment is still the most desired option.

It is this “fostered dependence” that experts refer to as the chains of gold that Pandit Nehru had famously talked about in the parliament saying: “l will bind Kashmiris’ in chains of gold.” The government is funding itself in such a way that the public finance dominates overall economy of the region as if it is its indirect extension. Reversal of this trend is the only scale on which successive regimes shall continue to be judged by a highly conscious lot of young population. And Omar Abdullah is no exception.

The only option with the government is to discourage hiring youth in the government sector. This can happen only if ample opportunities are created outside the government.

Dr Haseeb Drabu as economic adviser of J&K was behind the state’s fiscal architecture for around six years. He says options of managing the unemployment were always there.

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A journalist with seven years of working experience in Kashmir.

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