In addition to a set of 12 incentives that J&K government was offering to the new units, the package envisages 100 percent exemption of excise duty for a decade for new ventures and substantial expansion of the existing ones; capital investment incentive of 15 percent within three million rupees ceiling; full reimbursement of insurance premium on capital investment; and three percent interest subsidy on capital investment. Though it has led to around Rs. 4000 crore investment in Jammu, Kathua and Samba in all these years, withdrawal of the excise concessions component has triggered closure of many units and the flight of capital to neighboring states.
In May 2002 during his first visit to J&K, Vajpayee announced a package of 26 projects involving a cost of Rs. 8,687.13 Cr. It actually was the “boldest political statement made in economic terms”. A quid pro quo, an officer of the state government said that package conveyed in plain terms that development of J&K has to remain subservient to the security concerns and the central government was primarily interested in helping only those whose antecedents are not questionable, have contributed in counter-insurgency and are not to fence sitters.
Most of the projects he announced were related to either defence roads or fight against militancy leaving a small fund to take care of horticulture and handicrafts, the mainstay of Kashmir economy.
A whopping sum of Rs. 1,335 crore was taken by the ambitious and strategically vital 474-kms Manali (Himachal) – Leh (Ladakh) road. It also includes the Zangal-Padam-Dracha road in Leh to connect with Manali-Sarchu in Himachal and would cost Rs. 195 crore. Though 200 km of this road lacks any kind of life on either side, its development will free Ladakh, especially, Siachin from depending on Kashmir for supplies. Of this over Rs 700 crore will be needed for the the 9-km tunnel at Rohtang pass (now Rs. 1450 crore).
For the Udhampur-Baramulla railway track and doubling the Jammu-Jullundhar line, the package kept a total of Rs. 5,986 crore. While Rs. 620 crore was set aside for various border development schemes and to take care of the border migrants and Rs. 62.25 crore for the police and anti-militant forces, the package left Rs. 416.55 crore to be spent on various schemes in horticulture and handicrafts and Rs. 253.53 crore for the otherwise upcoming Batote-Kishtwar-Khanbal road, laid by BRO by debit to defence budget.
In his second visit, a year later, Vajpayee announced many things lacking a “strategic tag”. The upgrading of Srinagar airport to international standards was the most important one. “There was the announcement of 100,000 jobs but most of them were wage employment and self employments that were otherwise taking place under routine schemes and course,” a senior official of the government said. Though he had announced return of the Kashir Channel to Srinagar, it never happened.
After cobbling a coalition between its party and the newly emerged Peoples’ Democratic Party (PDP), Prime Minister Dr Manmohan Singh’s package – the PMRP of November 2004, was perhaps the major initiative in helping a turmoil devastated economy with lowest infrastructure index in the federation to recover. When it was announced in the lawns of Raj Bhawan, it surprised everybody. “We had been consulted on this and we expected around Rs. 7000 crore stimulus to the economy,” a policy maker associated with the exercise said. “But it was a pleasant shock that it was whopping Rs. 24000 crore.”
It took the babus in Srinagar quite some time to understand the ‘package’. It was an intelligent shot by the economist Singh who created a huge cocktail by rolling most of the central government projects – planed and under implementation, besides major initiatives falling under central sponsored schemes into a major public relation exercise. Baring rail, almost everything from Mughal Road of Gowda package to Padam-Darcha road of Vajpayee package, everything is part of the PMRP now. It even triggered fierce reactions from certain quarters in the mainland saying the tax payers’ money is being used to lure a rebellious race. The subsequent follow up added new facets as “for monitoring purposes” all the major developmental activities were added to it. Coupled with time and cost overruns, the Rs. 24099.47 crore “package” has already reached to a revised cost of Rs. 30,980.56 crore.
Almost 67 percent of the PMRP would go to the energy sector. Though it would suggest that the move was aimed at helping an energy-deficit state but the fact is that Rs. 16634.38 crore goes to the NHPC for implementing various power –