Packaged Oddly

Prime Minister Modi’s Rs 80068 crore TAMIER package has its intent rooted in the heart of the right-wing. But how will J&K use this investment to improve its capacities and maximize the cascading impact, asks R S Gull

Modi-and-Drabu-editedOn November 7, crowds were getting restive after listening to Modi’s verbose speech for almost 30 minutes. Then the visiting Prime Minister came to the subject that had motivated people to reach Srinagar despite the ‘million march’ sword dangling on their heads – the economic package. “Not only Delhi’s khazanay (treasure), but Delhi’s dil (heart) is always for the people of Kashmir,” Modi said, sending the crowds get into frenzy. “This is just the beginning.”

Chief Minister Mufti Sayeed and his economist Finance Minister Dr Haseeb Drabu who were feeling tense throughout the speech, felt relieved when Modi put the cap to his package: Rs 80,000 crore. He excluded it from Rs 34000 crore, the investment slated to create an alternative to the ailing highway connecting Kashmir to the mainland India. Modi’s vision for creating naya aur adhunik (new and modern) Kashmir impressed his hosts.

This ‘package’ that took almost half a year to get finalised and reams of newsprint to be written, had its figures changed several times. It once was pegged around Rs 120 lakh crore, then 108  lakh crore but was eventually announced at Rs 80068 crore. The most interesting part was that after being announced in Srinagar, it took almost a week to get basic details of what it is all about.

Being branded as TAMIER (The Aggregative Macro Economic & Infrastructure Rebuilding Plan) by the state government, the package takes care of five spheres of activity: humanitarian aid (taking care of flood impacted population, Kashmiri Pandits and the refugees), crisis management (flood infrastructure), social structure support, developmental works across sectors and the creation of new economic infrastructure.

 TAMIER projects fall under four different categories. Insiders in the government said that around 40 new projects have been taken up under the package which makes most of the package: Rs 62393 crore.

The second category takes care of the existing projects which lacked resources. Almost 10 major projects involving a cost of Rs 7427 crore would be taken up under this set of activity.

Almost nine projects with a cumulative investment of Rs 7663 crore is the third category of the package. These are existing projects which have resources available within the budget line.

Then there are four road projects, mostly about four different highways of the National Highway Authority of India which are being implemented under PPP mode. These would require Rs 2985 crore.

State government sources said that these projects falling under all categories will be taken up by various state and central government agencies. “Central government will implement projects involving Rs 35043 crore and the state government will handle the rest projects worth Rs 46225 crore,” Finance Minister Dr Haseeb Drabu said. “We do have cash transfers also taking place which will improve liquidity situation.” He said state government will make all efforts to improve the absorption and project implementation capacity of the state.

Investments trigger changes. While the infrastructure that will come up will contribute to change and improvement, the government faces a challenging task in managing part of the project implementation locally. This will have an instant impact on flight of capital and engagement of local workforce.

It was anticipated that Central government will invoke its rights in forcing its priorities on the package it announces on the eve of Bihar results. But there were hopes that flood related issues and the energy sector will get top priority. Flood-related issues dominated the entire discourse from the days of 2014 polls to Modi’s arrival because the floods had largely decimated the capacity that Kashmir economy had developed over the years.

Unlike the government, trade and civil society is unhappy with the flood related resources TAMIER envisages. Shakeel Qalander, civil society activist and an industry lobbyist even suggests that given the meager resources made available for the government to manage the post-flood Kashmir, Mufti Sayeed should have returned the package.

TAMIER envisages offering Rs 1200 crore (including Rs 400 crore in Jammu region) for rebuilding homes, Rs 800 crore for interest subvention to flood impacted trade, Rs 2000 crore for permanent restoration of damaged infrastructure, and Rs 1458 crore for comprehensive flood management of Jhelum and its tributaries. Besides, the package has converted Rs 1350 crore loan from the World Bank into grant under the same package. Against these allocations, expectations were slightly inflated.

Modis-Package-for-KashmirPDP, however, is disappointed over the raw deal that energy sector got. When it inked its Agenda of Alliance with BJP after hammering its nuances for nearly 60 days, PDP had explained to the BJP-run centre that energy was the key destabilize of state finances. If that was solved, it had argued, J&K would emerge as a revenue surplus state. During the discussions on the package, informed sources said, BJP government had agreed to provide almost Rs 5000 crore to the state for buying back two of the four projects from the NHPC.

But once the detailed breakup reached Jammu, this part was omitted. “This could have been a huge relief,” Drabu admitted. “But given the fact, that this idea is a part of the alliance agreement, things will move forward on it eventually.”

Power was actually expected to be the top sector in the package but once the details were revealed, connectivity had taken over. The energy related resources had nosedived from anticipated Rs 38000 crore to merely Rs 11700 crore.

Apart from creating two 20-MW solar power stations, one each in Kargil and Leh for Rs 250 crore and Rs 195 crore required for T&D management in power distribution, TAMIER has three major elements: Rs 2000 crore for small hydro power projects, Rs 1115 crore for implementing the Leh-Srinagar power transmission line, hanging fire for a long time, and Rs 4153 crore for equity requirement of the Pakal Dul power project to be set up by the Chenab Valley Power Projects Ltd (CVPP). CVPP is a JV between state owned SPDC and the NHPC.

There is thinking in the state government that given the fact that Pakal Dul may not require the entire money as its equity, there is a possibility of investing the “savings” as equity in some other state power project.

Security situation in the state, especially Kashmir has remained key concern for the successive governments. With PDP seeking reduction in the deployments and BJP unwilling to do so, TAMIER offers an apparent compromise. The package suggests that Rs 500 crore is being invested in security-sensitive Kashmir for ‘high end security and law-and-order systems’. While it may take some more time to understand details of this amount being spent in next five years, apparently it seems the electronic surveillance will take over the physical presence. Recently, even Ms Mehbooba Mufti suggested state police to look for alternatives to the pellets, chili grenades in their ‘non-lethal’ arsenal.

Compared to connectivity, investment in ‘home’ sector is little. Apart from Rs 300 crore spent to raise five additional India Reserve battalions, relocating 2016 transit camps with Rs 150 crore, TAMIER offers Rs 450 crore for enhanced remuneration to the Special Police Officials (SPO). Literally working as police’s ‘human shields’ SPOs are engaged for a petty sum and lack any hire and fire set up.

What is apparent, however, is that the centre has clearly spelt its preferences while formulating the package. With Rs 5268 crore for Pakal Dul and Leh-Srinagar transmission line, the two state sector projects, set aside, the balance resource is oddly divided: Jammu gets Rs 29706 crore, Ladakh Rs 20276 crore and Kashmir Rs 24764 crore. Modi’s treasure has eventually followed his heart!

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