A development revolution in J&K is a pipe dream but Modi’s ability to usher in quick changes is on test

Amidst the encircling economic gloom, the Prime Minister appears to have stumbled upon the perfect solution. Reduce the states to Union Territories and voila ! Investment would pour in. At least that is his expectation for Ladakh and Jammu & Kashmir.

It’s a different issue that even in the Prime Minister’s home state of Gujarat, textile and diamond cutting industries are struggling to remain afloat. Automobile manufacturers, dealers and ancillaries are cutting down on contract labour and investment is turning away from Assam and the North-East because of the uncertainties over NRC there.

The justification for scrapping Article 370 and reducing J & K to two Union Territories as given by the PM in his speech is lame at best. No doubt the Government is planning to host an investors’ meet in Srinagar and the redoubtable surgeon Naresh Trehan has gone on record to say that just one additional hospital, naturally a branch of his Medanta Group, would generate 34,000 jobs.

But when Gujarat, Maharashtra, Karnataka and Tamil Nadu are learning to cope with a slowdown, to expect a windfall in Ladakh and Kargil is highly optimistic. The Prime Minister is of course a masterful peddler of hope and optimism, notwithstanding the jibe of his critics that he is a snake oil salesman.

Tourism has been the biggest industry of Jammu and Kashmir as well as Ladakh. It remained so even when insurgency and terrorism were at their peak and even during the Kargil War. So in spite of lofty mountains and little scope for the establishment of big plants the economy of Jammu and Kashmir is much better than several other states.

The number of people living below the poverty line in Jammu and Kashmir is only 10.35 per cent against the national average of 21.92 per cent. The economic situation of Kashmir has improved much, than in comparison to what it was in 1970s when it used to occupy the last three or four positions. So a degree of autonomy may actually have helped J & K do better than the PM’s home state, for example.

In the land-starved Jammu and Kashmir as well as Ladakh there is relatively little scope for setting up manufacturing units. They can come up in the plains of Jammu division and Kashmir Valley only. The latter, which is roughly 135 km long and 32 km wide, is very rich for agriculture and horticulture production. The region is known for the production of apple, dry-fruits, saffron, timber, rice, etc. Apart from that, tourism as well as pilgrimage forms the mainstay of the economy.

Notwithstanding this fact, Hindustan Machine Tools (HMT) watch factory came up in both Srinagar and Jammu. They need to be revived as they have fallen sick.

So far the plains of Jammu are concerned this district, like other bordering places, is not suitable for the establishment of any heavy industry––obviously because of military and strategic reasons.

Not only that there are no big mines in Jammu district and it is too far away from the coastal belt, which suits the growth of industries. In contrast the mountainous region of Jammu division as well as Kashmir Valley and Ladakh are known for marble, limestone, gypsum, granite and some anthracite coal. At most the region can attract investment in cottage, small and medium sectors. Jammu has a substantial number of such industries.

It needs to be mentioned that the purchase of land by outsiders was not only prohibited in Jammu and Kashmir but in other regions of India also. It would be wrong to suggest that this was the only factor which prevented the fast economic growth of Jammu and Kashmir.

Successive state governments have taken land on lease for setting up industries. Now the big question is, why wait for private investments from outside and not nurture the local entrepreneurs, as it had happened in neighbouring Punjab where cycle, sports goods, woollen cloth, garment, etc. industries have come up? Should the local people only work as labourers or get lower grade jobs.

We have failed to develop indigenous entrepreneur culture in many regions of the country and always looked for big investors from outside. Assam too is a case in point. There is scope for the growth of service sector and software industry in Jammu and Kashmir, which does not require huge tract of land.

The problem with industries is that they are now not providing so many jobs as in the past. Mechanisation and automation have compelled many lower-grade workers to undergo occupational shift. The negative aspect of this phenomenon is that many of the workers are not prepared for frequent occupational shift.

Contrary to the general perception Jammu and Kashmir used to attract lakhs of masons, painters, carpenters and other types of skilled labourers.

Besides, the presence of large number of armed forces and central-para-military personnel and their family members have indirectly given a boost to the local economy. Their presence has certainly increased the purchasing power of the people. Markets in the cantonment towns everywhere are always bigger than other places. So it would be wrong to paint a dark picture of the economy of Jammu and Kashmir. In many respects the condition is much better than several other north-eastern states where it is difficult for the tourists to go––thanks to the Inner Line Permits and other factors.

Investors from outside are keeping their fingers crossed after the August 5 Presidential order, yet they will have to see that things are normalised at the earliest.