– happened to the reports of other three Working Groups.

The twin reports authored by the same economist has emphasis on an issue that has hitherto been ignored – instead of investing in the government and making the larger society secondary beneficiaries, invest directly in the economy especially in the infrastructure so that every section takes its pie.

His set of recommendations (worth Rs. 7947 crore) envisaged transferring 390-MW Dulhasti Power project that had the price tag of Rs. 4933 crore. (The payments that the central government would have to make to the NHPC were a staggered process starting with Rs. 984 crore in the first year to Rs. 321 crore in tenth year.) Apart from recommending that royalty to the state from NHPC generations should go up, he had suggested re-transferring of 1020 MW Bursar to the state sector with all the finances announced by the Prime Minister as part of the package in November 2004. He wanted many quick yielding projects (QYPs) like Rs. 1750 crore for J&K’s rural roads, an initial corpus of Rs. 300 crore for an Asset Reconstruction Company (ARC) (on 1:2 ratio between state and centre) that would take over the bad assets in public sector and give them a clean slate to start afresh, Rs. 400 crore for adult literacy and urban employment and Rs. 200 crore for Special Industrial Zone (SIZ).

“The SIZ will mimic all the physical attributes and governance structures of SEZs but not necessarily their fiscal and statutory dimensions. Like SEZ, the SIZ too will be a large area with world-class infrastructure, captive power generation, high quality services and utilities but will lack tax concessions and export obligations. They will be free to sell in the country or export,” the report said.

Prime Minister and other central leaders have all along been maintaining that the recommendations of all the Working Groups would be implemented. So far, the only initiative of its implementation was the package of Rs. 1681 crore that Prime Minister announced in Akhnoor for Kashmir Pandit migrants willing to return home.

Expecting a package, many in the state say, does not sound good. “The earlier packages have been unimpressive either in their ideation or implementation or both.” Said Zahoor Ahmad Bhat, a government employee. The observation is not an under-statement.

Kashmir has no history of packages unlike north eastern states or Punjab. With the fiscal relationship left for the next round of negotiations both in 1952 and 1975, J&K has survived on the routine devolutions with the routine legislations taking care of the requirements that cropped up within the system. The ‘package’ was heard for the first time in 1987 when the then prime minister Rajiv Gandhi visited Kashmir and there was a massive snowfall helping him to understand the problems that Kashmir faces during winters. He announced Rs. 10,000 Cr. economic package for J&K. Well before the bureaucracy could ask where it will come from and where it will go, V P Singh succeeded Gandhi in 1989. By then, full-blown militancy had crushed the system leaving civil secretariat with a symbolic control.

The situation forced Prime Minister Singh to “correct the wrongs” in the pattern of devolutions. As special category state, J&K since 1952 would get 90 percent of the central devolutions as grants and 10 percent as loan, a system that gradually became 30 percent grants and the rest as loan. He restored the position that came handy to the beleaguered gubernatorial regimes in Srinagar.

In came H D Deve Gowda who announced an economic package on July 23, 1996 that envisaged spending Rs. 2,500 crore on the construction of Udhampur-Baramulla BG railway track (cleared by CCEA in March 1995), Rs. 77 crore for the construction of Mughal road, an as alternative to the 289-kms Jammu Srinagar national highway (NH-1A). The package was a declaration of intent to implement some projects already on the shelf.

On governor’s recommendation, Gowda government wrote off “all loans below Rs. 50,000 disbursed up to and outstanding on June 30, 1996”. After a protracted exercise, Rs. 301 crore were released favouring 164,636 people. Some of this amount was actually swindled by certain cooperative banks in the ailing state-run cooperative sector.

Atal Behari Vajpayee, however, took up a series of measures to address J&K’s economic concerns. The first came in April 2002 when after a long wait, New Delhi approved the National Conference (NC) demand of a set of incentives to attract new investments.


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