Why Jammu and Kashmir Is Not As Bad As It Is Being Officially Projected?

by Haseeb A Drabu

Kashmir is the only place where the house-hold debt is lower than its asset cover. The “balance sheet” of a Kashmiri household is more liquid and less leveraged than even prosperous Punjab, terrific Tamil Nadu and glorious Gujarat.

The incumbent Chief Secretary, who is not given to hyperbole, made some seriously offensive and derogatory comments about J&K to a bunch of journalists on a junket to Kashmir. There have been sharp reactions from political parties pulling him up for exceeding his brief, talking above his pay grade, disregarding service conduct rules and being delusional. Yet, he has not been pulled up by those who matter today. Obviously, he is articulating the view of the system.

An aerial view of Srinagar on Friday during the lockdown that was put in place in the union territory of Jammu and Kashmir two weeks back in order to contain the spread of Coronavirus. KL Image by Bilal Bahadur

Even if we were to kill the messenger, what about the message that, “Governance in J&K was badly managed and broken, and there was no system, no rule and no process”. That the past is an era of administrative anarchy, which along with political deceit, resulted in a developmental disaster.

Do facts bear out what has been publicly stated and was splashed in the newspapers all over the country?

Long Life

The official data, which reflects the progress and prosperity of the country, shows that in Kashmir people live longer, 74 years, compared to the national average of 68.  In fact, except Kerala and Haryana, life expectancy in Kashmir is the best in the country.

An undated photograph showing the village elders in a discussion.
An undated photograph showing the village elders in a discussion.

Notwithstanding the administrative apathy, in Kashmir most of the children, 75 per cent, are fully immunized.  Admittedly not what it should have been but still way better than the all India average of 62. In well managed states like Gujarat it is just 50 per cent, while in the neighbouring Himachal Pradesh it is 64. Immunization, says UNICEF, is the key to child survival. As a result, even with a creaking health care infrastructure, Kashmir had an infant mortality rate of 24 per 1000 in Kashmir. By global standards, this is still high, but when we look around from the depths of despair, J&K has been better than the rest of the country. The all India infant mortality rate at 34 is worse than even Africa. Paradoxically, India’s island of misgovernance, Kashmir, sits in the company of South-east Asia’s Indonesia.

Better Schooling

It would appear that we even managed to send our children to schools; decrepit and dilapidated; many without proper buildings, many more without toilets especially for girl child. Yet, 87 per cent of the girls in Kashmir are in school compared to 65 per cent in Gujarat, the model state. Once out of the ram shackled schools, the youth in the state managed to eke out a living too. According to estimates the unemployment rate of 5 per cent in J&K is lower than the all India average of 6 per cent.

Low Debts

The primordial Kashmiris have been conservative in borrowing money; the “30 families who milked J&K Bank”, notwithstanding.  In fact, Kashmir is the only place where the house-hold debt is lower than its asset cover. The “balance sheet” of a Kashmiri household is more liquid and less leveraged than even prosperous Punjab, terrific Tamil Nadu and glorious Gujarat.

While the average income of a Kashmiri is lower than the national average, his/her quality of earnings is much better. Almost 25 per cent of the income is from “self-sources” which cushions against deprivation caused by market fluctuations. Given this income generation dynamic, the poverty ratio in Kashmir at 10.4 per cent is less than half the all India ratio of 21.9 per cent. The incidence of income inequality is also among lowest in the country.

Higher HDI

When all these different indicators are combined to make a Human Development Index (HDI), it turns out that the HDI for Kashmir is 0.688, which is not only higher than the national HDI (0.641) but also better than even middle income states like Karnataka, Andhra Pradesh and Gujarat. To put is in simple terms, the people were better off than most places in the country.

Lt Governor chairing meeting of Administrative Council in May 2020

The moral of the story is that while we could have done much better but even when we did badly, it was better than states which are ostensibly governed with “rules, regulations, systems, processes and ethics”.  Welcome to a “broken system”.


As regards, the “system designed for corruption”, while the local politicians worked it, who designed it? Outstanding civil servants like P K Dave, N K Mukerji who served here in the 70s? Or maybe B K Goswami, Moosa Raza, or V K Kapoor, all respected seniors of the current crop.  Or was it the iconic civil servant Ashok Jaitley, who ran the state for a good eight years? Unless, of course, the reference is to the post-2002 period, when the state was run by home bred IAS officers – S S Bleoria, Vijay Bakaya, C Phunsog,  B R Kundal, Iqbal Khandey and B R Sharma?

For someone who has worked in the World Bank, it should have been obvious that a system gets designed for corruption wherever there are “weak democratic institutions, poor accountability, and political instability.  The incidence of corruption is high in situations where the political process is questionable, civil liberties and political rights are curtailed, and the quality of public services provisions is poor” (World Bank Working Paper 2196, “Governance Matters” by Kaufmann, D, et al, Washington DC).  It is this that underlies systemic corruption in Kashmir; not the DNA of its people.

The Ponzi Past!

But all this is history now; the Ponzi past, we are told, is well and truly behind us. Now everything is rule, norm and procedure based. Really? Two examples should suffice. The government recently appointed 4,000 teachers in schools, and regularized 30,000 rehbar-e-talim. This, despite the fact that the pupil-teacher ratio in J&K at 16:1 is not only much better than the national average of 24:1, it is even better than that of China at 19:1. Gujarat has a student- teacher ratio of 32:1 and Bihar is at 57:1. On what norm was this decision taken? This completely ad hoc decision will make the people of Kashmir pay for the next 50 years and break the fiscal back of the state government. Historically, the state has been fiscally wrecked during Governor’s rule; just look at the emergence of non-plan revenue deficit of the state government over the last 30 years.

JK Bank

Another shining example of newly instituted “rules, systems and process” based transparent governance” relates to J&K Bank. Like all financial institutions, the Bank had got examinations conducted by an external agency: the Institute of Banking Personnel Selection, a Government of India Undertaking.  One fine morning, the then Governor, ordered the Chairman — he said it publicly on record – to absorb all the “dropees”, i.e those who had not qualified or who were below the cut off mark. In what capacity, under what rule was this done? What does this do to merit of those who had qualified? Be that as it may, was it not for the Board of Directors of the Bank to decide? Publicly, it was about recruitment, privately it could have been about giving loans. The decision, which sounds the death knell for corporate governance, amounts to superseding the board of a listed company.

J&K Bank Corporate Headquarters Srinagar. KL Image

As regards the lack of transparency, much has been said about Central RTI not being applied to J&K for opacity reasons. The reason why it was not extended is because J&K had already enacted its own RTI Act in 2004, i.e. one year earlier than in the rest of the country. Same with the Right to Education. While the Constitution of India enunciated this right in 2009, the J&K Constitution gave it in 1956. It may be of help to know that J&K was the only state that has the Right of free and compulsory education.

It is not that the winds of change from rest of the country didn’t reach Kashmir; it is the other way round!

Tail Piece

A sampling of factual errors, to set the record straight.

“Kashmir did not have a single World Bank project 10 years ago. The first World Bank project of Asian Development Bank came in 2011-2012“.

J&K was an early bird state to get a World Bank project. Way back in 1978, a US $14 million project (Project ID P009731) for improving the marketing and production of apples, walnuts, and mushrooms was started in the state. There have been quite a few projects even after that. Also, the reason why the state had difficulty in accessing developmental assistance because the multi-lateral funding institutions had issues about the UN sanctified “disputed” tag of Kashmir. Many a time, Pakistan has objected to any multilateral funding for J&K.

“All other PSUs (public sector undertakings) in other states submit their report to the assembly, the PSUs in other states come under RTI, CVC (Central Vigilance Commission). But the JK Bank is accountable to none”.

Such an astounding statement, coming from the promoter of a publicly listed bank, could have lead not only in an equity market sell-off but a run on the Bank.

Haseeb Drabu

The J&K Bank, before change of ownership — from state government to Government of India – was under Section 22 of the Banking Regulations Act 1949, (extended to J&K in 1956), an “old generation private sector bank”. It still is. It is regulated by the Reserve Bank of India, which not only does an annual inspection as it does for all banks in the country but ensures compliance to all banking, prudential and regulatory norms.

Even though, it was not a PSU, but being a government company, J&K Bank was under the ambit of the Comptroller and Auditor General of India. The CAG also, unlike any other bank in the country, appointed the statutory auditors. The CAG, itself, did an annual supplementary audit of the Bank. In addition to this, being a publicly listed entity it was also accountable to the Securities and Exchange Board of India. The J&K Bank is also under the purview of the Registrar of Companies, Ministry of Corporate Affairs.

The reason why J&K didn’t present its accounts to the legislative assembly of J&K is because it was not a PSU and banking is not on the state list.

(An economist and former editor, the author is former finance minister of Jammu and Kashmir. The write-up appeared first in Greater Kashmir)


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