In his maiden budget proposals when state’s finance minister Dr Haseeb Drabu said he intends to make government services unattractive, he was not announcing a favour to the private sector. He was referring to his compulsions, instead.
By the end of March 2014, J&K government had 4,66,553 people on its rolls and if at all the 40,000 vacancies are filled, more than four percent population of the state will be on rolls of its government. And that has a cost: of the Rs 46473 crore that the government plans to spend in 2015-16, Rs 20,328 crore would be the net outgo as employee salaries and pensions – a clear 43.74%. Never ever has the state government even spent half of this amount on state’s development in a calendar year in its recent history!
Traditionally the government jobs in J&K are considered to be the ultimate aim in life. With less accountability, adequate wage structure, better social security cover, and chances of ‘other’ incomes’ have made government employment so lucrative that government employees prefer taking a fellow employee as their spouse. It gradually is becoming a class in itself which could easily have comparisons with the political or the business class.
But now the government is facing a sort of saturation. Even as the federal fiscal structures are gradually easing fund devolutions to the states, new benchmarks of performance on fiscal deficit and reduction in revenue expenditures are making the situation even more difficult. Efficient privately run systems are fast encroaching upon various government functions including service delivery leaving lawmaking, enforcement and monitoring with the governance structure. J&K is no exception to this.
Post-partition J&K tried to build its economy on the ruins of a ruthlessly exploited human and economic resource. With the historic land to tiller initiative in hand, the first target was to grow enough to feed itself. Though the target was partially achieved, the subsequent political instability prevented from making better use of what J&K had and it could have. Public finances retained the key in giving a certain direction to the economy but it could not do much, for lack of ideas. The grey areas in the state’s economy became starkly visible after India opened up in early 1990s. Unfortunately by then, J&K had landed in a different crisis.
More than two decades later, Kashmir still is a depressed consumer market with clear disparity between priorities in academic curriculum and demands in the labour market. Political conflict and the consequential instability continue to negatively affect the economic well being and accelerate youths’ economic disengagement. In this situation, the ‘stable’ government job is still a priority over risky and unstable forays in private sector. Unlike Jammu, manufacturing activities in Kashmir are still an uphill task for topographic, climatic, and energy reasons.
But the new narrative that emerged during the jackboot days is reassessing conflict beyond tragedies and losses and is willing to consider the lost opportunities and un-measurable infrastructure deficit. Now people on streets and the civil secretariat have started thinking aloud about engaging state’s youth bulge in economically meaningful ways. If 2011 census is any indication, J&K has never been so young before: 71% of the population falls below the age of 35 and 48% in the 18-35 age group would require jobs. There is a willingness to encourage fragile politics to improve labour market and link it with the curriculum. A process has actually taken off.
But this gloomy situation has a rosy other side. Creation of jobs in private sector requires activity that essentially has three major elements: the market, the human resource and the funds. J&K as a consumer market makes yearly purchases of Rs 50,000 crore. This gives a fair idea about the scope of interventions in import substitution. Banks in J&K are flush with funds: Rs 76,484 crores was in their vaults by December 2014 and barely Rs 35,235 crore was advanced within the state making the balance Rs 41,249 crore to be deployed outside the state. To link the three key elements for triggering a major change and dictate a new trend, only leadership and policy intervention is required.
In EDI, J&K already has a model institution having an impeccable record of triggering a change. It has been implementing three schemes: Seed Capital Fund Scheme (since 2010), Youth Start Up Loan Scheme (YSLS since 2012) and a special entrepreneurial initiative sponsored by the National Minority Development Fund Corporation (NMDFC since 2011). Its working detail is worth the praise. Of around 4750 initiatives it implemented, more than 80% are functioning. This rate is much above the international (62%) and national (57.6%) success rate for new start-ups, a rare feat for an organization operating in J&K. These successes in an apparently discouraging ecosystem have neutralized the self-serving systemic firewalls that were created over the decades.
Kashmir Life has been supportive of businesses as a matter of policy and has extensively profiled most of the new initiatives in last six years. The idea is to offer new career choices to the new generation and to encourage them think beyond the ‘government box’. This is precisely why this special publication dedicated to the idea of entrepreneurship is in your hands. We genuinely consider the entrepreneurs showcased in this publication, trained and mentored by the EDI, as J&K’s role models for the new generation.
Editor
