SWOT Chapter 4 The State Government with the liberal financial support of the Central Govt. has taken a plethora of initiatives under various ambitious plans/ programmes to boost development in the State. In view of being a strategically and geo-politically sensitive State, Govt. of India is giving focused attention on bridging the gaps in infrastructure, communication, health, education, Agriculture development, livelihood initiatives and other integral areas of development to bring it to equal play ground with the rest of the country. A multi-dimensional approach in an integral manner is adopted for full utilization of natural resources to ensure rapid, sustainable and inclusive growth. Concerted efforts of the Central and State Governments are helping in providing a thrust to the process of socio-economic development of the state for fostering sustainable growth to make the economy increasingly self sufficient. This chapter attempts to look at the Strengths, Weaknesses, Opportunities and Threats (SWOT) to the socio-economic scenario of the State. Apart from socioeconomic and infrastructural sectors of the economy, SWOT is a comprehensive analysis of other development parameters linked with the economic performance of the State. Thus while discussing the problems of development of the State it is of great interest to look at the resources position of the State. Strengths One of the most marked characteristic feature of the State is its low density of population. As against the national average of 382 persons per sq.km. density of population of the State is 124 persons per sq.km. On low density, J&K ranks 8 th among the States / UTs of the country. The overall receipts of the State have gone up from `13279 crore in 2007-08 to ` 24782.96 crore in 2011-12 registering growth of 86.63% during this period. The revenue receipts of the State from all sources have continuously enhanced over the years. In terms of percentage increase, the revenue receipts for 2011-12 grew at 11.47% over the previous year. State s own revenue receipts i.e., tax as well as non tax revenue registered an impressive growth of 47.46% during 2011-12 over 2010-11 with 36.26% in tax revenue and 83.12% in non-tax revenue. Revenue on account of central tax transfers constituting 14.10% of total revenue receipts for 2011-12 posted sharp increase of 13.96% over previous year. The state has been successful in recording revenue surplus. The revenue surplus for 2011-12 has been recorded at ` 2103 crore. Notwithstanding the fact that revenue surplus has dwindled, by ` 1664 crore in comparison with previous year due to Pay Commission arrears. 1
Due to successful management of the VAT regime tax revenue has clocked a figure of ` 4745.48 crore during 2011-12 recording robust increase of 36.26% over 2010-11. Expenditure on social services which shares 27.44% of total expenditure has increased by 16.35% during 2011-12 as compared to 14.82% increase in 2010-11 over corresponding previous year which will definitely enhance the welfare of marginated sections of the society. With the twin objectives of balanced development of sensitive border areas through adequate provisions for creation of infrastructure facilities and promotion of sense of security among its local population, the current year s approved allocation amounts to `128 crore under BADP. Agriculture including allied activities account for 20.56% of GSDP at 2004-05 prices in 2012-13 as compared to 21.19% in 2011-12(QE). Interms of composition, out of total share of 20.56% in GSDP in 2012-13, agriculture including live stock accounted for 17.10% followed by forestry and logging at 3.04% and fishing at 0.42%. Notwithstanding the declining trend in agriculture s share in GSDP, the importance of this sector to the economy is best understood with reference to its share in employment value chain, livelihood for major chunk of its population, besides macro economic stability. The growth in agriculture and allied activities is very important for inclusive growth. The performance of agriculture influences the overall growth of the economy. Apart from being the provider of food and fodder, its importance also stems from the raw material that it provides especially to the industries and particularly agro based industries. The economy of the state is essentially agro based with 49% of working population engaged in agricultural activities. About 70% of J&K population directly or indirectly derived livelihood from agriculture. Agriculture continues to be a primary employment providing sector, the services sector (including construction) is the primary source of employment in urban areas. As per the National Sample Survey Office s (NSSO) report on employment and unemployment situation in India 2009-10 for every 1000 people employed, 597 and 110 people are employed in agriculture sector in rural and urban areas respectively (measured in terms of usually working persons in the principal status and subsidiary status). The relative figures for India are 679 and 75 of every 1000 persons in rural and urban areas respectively. On the other hand, the services sector (including construction) accounted for 316 and 662 of every 1000 persons in rural and urban J&K respectively. The State is endowed with large natural resources and tremendous potential for growth in the agro- horti- forestry. Horticulture is emerging as a fast growing sector of the economy which has a great potential for further development. In horticulture the state shares around 3 percent of all India production of fruit. Almost 45 percent of economic return in agriculture sector account for horticulture produce. Around 6 lakh households with 30 lakh people are involved in horticulture trade directly or 2
indirectly. Diverse agro-climatic conditions, varied soil etc. have endowed with promising horticulture and value added products that can be marketed within the country and abroad. Horticulture plays an important role in the foreign exchange earnings. During the year 2011-12, the state exported 9796.65 metric ton dry fruit i.e. almond and walnut both in shell and kernel and earned foreign exchange of ` 232.86 crore recording impressive growth of 11.69 over previous year s foreign exchange earnings. The state is abounding in crops like Apple, Almond, Mango, Walnut, Cherry, Apricot, Plum, Kiwi, Litchi, Olive, Citrus, etc. which have high commercial value. High growth in horticulture sector can contribute to generation of gainful and permanent employment to sizeable number of people. Potential for bringing additional area under Walnut is enormous. As per preliminary estimates about 0.50 lakh hectares are still available on which walnut cultivation can be undertaken successfully. This will help to create green cover in hilly areas and conserve soil from erosion, besides, providing high value wood for wood carving industry, as well as walnuts for export purposes. New species/kinds/cultivars are being introduced suiting to the agro climatic conditions of the State to boost horticulture sector. Kashmir s Agriculture has an international identity. Saffron, an agriculture produce, is cultivated in Valley (Pulwama and Budgam districts). J&K ranks 1 st in the country in the qualitative production of saffron. To encourage cultivation of Saffron in other districts of Kashmir as well as Jammu province, the Govt. of India has launched National Mission for Saffron development in the J&K state for a period of 4 years from 2011-12. J&K is blessed by nature with tremendous biodiversity and extremely congenial climate for growing of various kinds of ornamental crops. Thus floriculture holds promise for improving the economy of the state. J&K is the most important beekeeping area in India. Vast diversity of natural resources, excellent climate replete with all types of climatic conditions ranging from sub tropical, temperate make the state suitable for beekeeping. The raw silk production is continuously increasing, during the year 2012-13 expected to be 115 MT. J&K is the only state of India which is in the same altitude in which leading Bivoltine Sericulture countries of the world lie. The state offers enormous potential to produce Bivolatile silk of international grade which can help to reduce the import of Bivolatile silk. Average price for A grade silkworm cocoons remained ` 450/kg per green during 2012-13 as against ` 350/kg per green during 2011-12. J&K ranks first among northern States/UTs and is the 4 th state in India interms of silk cocoon and raw silk production. it is 3
Around 28000 rural families have Sericulture as subsidiary occupation. About 900 MT of cocoons is produced annually in the state and employment opportunities amounting to 4 lakh man days are generated. The state has a great scope for allied agriculture activities. With enough of grazing land in hilly areas, live stocks farming is a distinctive advantage. Live stock population is about 2 percent of the country s total as per 2007 Live stock census. It is another fast growing sector making significant contribution to the economy. Livestock sector engages a sizeable number of workforce not only in rearing of animals but also in processing, transportation and sale of animal products. The estimated livestock population of the State as per the latest available integrated sample survey data is 155.867 lakhs. The state has splendid swathes of forests harbouring massive varieties of fauna and flora. Forests play an important role in maintaining the ecological balance by moderating the climate, maintaining the soil mantel, improving soil fertility, minimizing soil erosion, purifying the air, preservation of wild life and in regulating the flow of water in rivers and streams. Forests are also main source of timber, fuel, fodder, medicines and other non timber minor products. Forests also provide grazing facility for our livestock, besides ensure good agriculture produce. Revenue receipts on account of sale of timber, firewood, resin, minor forest produce etc. amounted to ` 49.29 crore during 2011-12 recording sharp growth of 11.43% over previous year. Per capita forest area accounts for 0.17 hectares as compared to 0.07 hectares in the country. The fish production is increasing year by year. To give boost to the fish culture, the state is making concerted efforts for development of requisite infrastructure on this account. The infrastructure established interalia contain 2 Regional Fish Farmers Development Agencies under Extension Programme, 752 carp and 197 trout units under Private fish farming, 1 recreation Park for trout fishing, 1 Mahsheer fish seed farm, 2 reservoir fisheries and 2 Aquarium including one underground as on 31.03.2012. During 2012-13, an amount of ` 286.11 lakh has been realized as revenue from all sources under fisheries sector upto November, 2012. The state has a rich heritage of handloom and handicrafts. In fact, this sector occupies an important position in the economic structure of the state and has world wide acclaim for high quality craftsmanship, attractive designs and functional utility. Handicraft goods of the state occupy an important position both in the national and international markets. Carpet industry is making a great contribution towards foreign exchange earnings. Handicraft a labour intensive sector engaged around 4-5lakh artisans in the state. 4
The State is a major exporter of superior quality carpets, wooden shawls, embroiderical clothes and many other valuable crafts Both production as well as export of handicraft goods have made a substantial performance over the years. Numerically, production of handicraft goods reached to ` 1815.33 crore during 2011-12 and export of handicrafts increased from ` 595 crore in 2003-04 to ` 1643.37 crore in 2011-12 i.e. it has increased by about 3 times during this period. In the export figures, share of woolen shawls is highest (37%) followed by carpets (35%) during 2011-12. The department of Industries & Commerce J&K is focusing on key sectors like food processing, pharmaceuticals, biotechnology, textiles, sports goods etc. to accelerate industrial growth in the state. In addition to existing 50 industrial estates, 10415 kanals of land are being acquired for setting up of new Industrial estates in various districts of the state. The large and medium industries are mostly in the State public sector with a few units under the control of Central Govt. 177 industrial units are being set up in the large and medium sector with an investment of ` 5440 crore providing employment to 38,870 persons. Out of these 177 units, 55 units with an investment of ` 2400 crore providing employment to 18000 persons have been set up as on January 2013, 23 units with an investment of ` 1021 crore employing 3200 persons are under implementation. As per 3rd All India Census report, 2001, the total number of functional industrial units in the state were 15253 generating employment for 50643 persons. The annual turnover of these functional SSI Units was estimated to be ` 2062.27 crore with an investment of ` 937.56 crore. The state is also abounding minerals deposits. During the year 2011-12, the Geology & Mining Deptt. extracted minor minerals valuing ` 23994.90 lakh. Khadi and Village industries play dominant role in providing employment opportunities to rural artisans specifically the socio economic weaker strata of the society. Under Prime Minister s Employment Generation Programme, during the year 2011-12 the Khadi and Village Industries Board sanctioned 1224 cases there by providing employment to 10251 persons. The Khadi Village Industries Board has recorded sales turnover of ` 549.66 lakhs in the year 2011-12, recording sharp increase of 31.67% over the previous year s sales of ` 417.45 lakhs. The Crude Death Rate (CDR) per 1000 population stood at 5.5 as against the national average of 7.1 in 2011. The Crude Birth Rate (CBR) per 1000 population of the state is 17.8 and well below the national average of 21.8 but the neighboring states like Himachal Pradesh (16.5) and Punjab(16.2) have lower CBR than J&K. 5
Total Fertility Rate (TFR) per woman is 2.2 in 2009 as compared to 2.6 at national level. Infant Mortality Rate (IMR) a very sensitive demographic indicator is 41 per 1000 live birth in 2011 in J&K where as at national level it is 44 in the same year. In the health care sector J&K has a vast network of 3850 institutions as on 31.12.2012 which include 112 district/sub-districts hospitals, 651 PHCs & Allopathic dispensaries and 2606 sub centers/medical aid centres, besides 481 others. Average population per health institution during the period 1950-2012 has considerably decreased from 26240 to 3337. J&K s Literacy rate has increased by 13.24% points during 2001-2011 i.e, from 55.50% as per 2001 Census to 68.74% as per 2011 Census while female literacy rate has increased from 43.00% in 2001 to 58.01% in 2011. Gender gap in literacy reduced from 23.60% in 2001 to20.25% in 2011. Population covered per school (from Primary upto secondary level) in the state during the year 2011-12 stood at 446 as compared to 890 at national level in 2009-10. The state succeeded to a great extent in establishing primary school within the radius of 1km, upper primary school with in the radius of 3kms, high school within 5kms radius and higher secondary school within the radius of 7-10 kms. Teacher-pupil ratio at primary, upper primary and secondary level in the state in 2010-11 was 1: 20, 1:15 and 1:11 respectively, the relative indicators at all-india in 2009-10 were 1:42 (primary school) 1:34 (upper primary school) and 1:30 (secondary level). During the year 2012, 13.09 lakh tourists visited Kashmir valley, 1.79 lakh tourists visited Ladakh, 101.54 lakhs devotees to Mata Vaishno Devi Ji and 6.21 lakh to Amar Nath Ji Holy Cave. Tourism is not only a growth engine but also an export growth engine and employment generator. The sector has a capacity to create large scale employment both direct and indirect, for diverse sections of society from the most specialized to unspecialized work force.. J&K has a great promise for development of tourism in view of its inherent potential. Availability of good quality and affordable hotel rooms play an important role in boosting the growth of tourism. Presently there are 1508 registered hotels and restaurants in the state apart from 84 tourist bungalows and huts. The Govt. is taking all possible steps and making all efforts to develop world class tourism infrastructure at tourist destinations and circuits. Development of national and internationally important destinations and circuits through three Mega Circuits i.e. Buddhist Circuit for Leh ii) Sufi Circuit for Kashmir and iii) Spiritual Circuit for Jammu agreed to by Ministry of Tourism, Govt. of India is a judicious mix of 6
cultural, heritage, spiritual and eco-tourism to give tourists a holistic view about J&K. Energy is one of the key drivers of the economy. J&K is richly endowed with vast water resources including hydel power potential with more than 20000 MW capacity. The state is expecting to achieve 100% target of ` 2810.65 crore as revenue under power sector during 2012-13 which would be more than double the last year s figure of ` 1200.16 crore. During the year 2012-13, 3937.045 MUs energy is estimated to be generated as against 3863.524 MUs for 2011-12. Above all the state has a democratic traditional system, of local self government with spirit permeating the entire social system. Weaknesses Due to its peculiar geographical, economic and socio-cultural features, the economy of the state has a distinctive identity. Despite rich endowments, J&K represents one of the low developed states of the country on number of development indicators. Major causes of weakness are:- v J&K economy is a high cost mountain economy having a number of characteristics which pose special development challenges. v Geographical isolation and difficult terrain reduce the mobility. High transport costs is main hurdle to turn to the major markets to compensate for the disadvantage of the small size of its domestic markets. v The access to national capital markets/ external capital is very limited for J&K. The unorganized sector enterprises are still in the primitive stage of organization with hardly any exposure. v The revenue from own resources to the state is low i.e. 27% of the total revenue receipts. Comparing the revenue situation of the state viz-a-viz its expenditures for last 6 years, there always remains fiscal deficit. This fiscal deficit has increased from ` 1930.00 crore in 2006-07 to ` 2833.00 crore in 2011-12. v Fiscal deficit as percentage of GSDP for the year 2011-12 amounts to 4.29%. v The Fiscal deficit of 4.29% requires immediate corrective measures. Multi-pronged approach in terms of mobilization of additional resources, greater tax and non-tax collections, cost of recovery of user charges, full funding of Plan and expenditure compression, particularly establishment related, is required to be adopted. v The fiscal deficit of ` 2833 crore recorded during 2011-12 has considerably increased against the fiscal deficit of ` 2367 crore in 2010-11. In percentage terms it has increased by 19.69 percent. The fiscal deficit of ` 2833 crore however, excludes ` 110.61 crore as interest on loan availed for liquidating Over Draft with J&K bank and ` 749.88 crore as Cash Balance Investment Account. Thus the Gross Fiscal Deficit for 2011-12 amounts to ` 3694 crore. 7
v State s own deficit during 2011-12 is recorded at ` 21730 crore posting an increase of 8.51% over previous year s figure of ` 20025. v In terms of economic growth measured on net state domestic product at current prices for the year 2009-10 (information available for all states/uts except Nagaland, Lakshadweep, Daman & Diu and Dadra & Nagar Haveli). Jammu & Kashmir is not placed at desired level having 22 nd place in the inter sate comparison at all India level. As per this, indicator the economically fast growing states are Sikkim which tops the list with 48.21% growth rate followed by Mizoram (22.24%) and Maharashtra (20.25%). v In comparison with the neighboring 8 states/uts (Haryana, Himachal Pradesh, J&K, Delhi, Rajasthan, Punjab, Jharkhand and Chandigarh) per capita income of J&K is woefully poor. On this indicator the state occupies 2 nd last number amongst the Northern states/uts for 2011-12. While rank 1st is enjoyed by Delhi with per capita income of ` 175812 followed by Chandigarh with ` 120912 which is in turn followed by Haryana with ` 109227. Per capita income of J&K for 2011-12 i.e., `44533 is surprisingly far below the national average of ` 60972 for the same reference year. Lower below to J&K is Jharkhand with per capita income of ` 31982. v The residents of the state experience higher volatility in their income. In the comparison of erstwhile 14 districts Jammu, Kathua and Srinagar enjoy rank 1 st, 2 nd and 3 rd with per capita Net District Domestic Product of ` 47584, ` 39938 and ` 37740 respectively as per provisional estimates for 2009-10 at current prices. As per this indicator district Rajouri is the lowest district with per capita NDDP of ` 24587. The difference between 1 st and the last district is ` 22997. v Low growth in industry estimated at 3.17 percent for 2012-13 compared to 9.77% for 2006-07. v J&K is much behind the rest of the country in industrialization. Though share of industry to State s Gross Domestic product is 24.56 % as per advanced estimates for 2012-13 but it is constantly decreasing. It has decelerated from 29.05% in 2007-08 to current level loosing 4.49% share on the same base. Besides its growth has declined from around 7% to 3% during this period. So far as its growth is concerned it remains between 2-3 percent, therefore, is not satisfactory. Apart from this the share of industry in employment is very less especially in rural areas. In rural J&K, out of 1000 persons only 84 are employed in industry and this indicator for urban J&K is 227 as per the employment-unemployment report 2009-10. v As per quick results of 2006-07 industrial census out of 20359 surveyed units around 29% were closed/untraceable in the small scale industrial sector. v Growth in agriculture (including allied activities) which is the back bone of an agrobased economy still remains somewhere less than 4 percent, therefore, is not encouraging. The advance estimates have put the growth rate of this sector for the year 2012-13 at 3.84% at 2004-05 prices. At all India growth in agriculture and allied sector has also been less for 2012-13. 8
v The share of agriculture and allied activities to GSDP is continuously decreasing. Its share in GSDP has scaled down from a very high 56.64% in 1970-71 to 32.58% in 2000-01, then to 28.06% in 2004-05 and reached to 20.56% as per advance estimates for 2012-13. Less performance of this sector is interalia due to following reasons. The area under food grains over the years has remained stagnant. The productivity of land as compared to its potential is low due to low NPK consumption and indigenous ploughing is the main farm implement still in areas of difficult terrain. In yield parameters, J&K is lagging far behind in many crops. Yield rate of food grains is less than 16 qtls. per hectare based on last six years average. Yield rate of food grains at national level for the year 2010-11 was above 19 qtls. per hectare. Availability of irrigation facility is restricted to 43% of the net area sown and 57% is still a rain fed area. A major constraint to the development of agriculture in J&K, is the fact that only 50% of the ultimate irrigation potential of the state has been harnessed. J&K State is also deficient in rainfall; development of irrigation potential in the state becomes necessary for reducing dependence on import of food-grains and other agricultural products. Inadequate double cropping- due to lack of irrigation facility in some areas and climatic difficulty in others places, 44% of net area is sown only once. The farmers are mostly small and marginal farmers with small and fragmented land holdings. The average farm size is continuously decreasing. This poses a challenge interms of adoption of farm mechanization as well as generating productive income from farm operation. The present man-land ratio (cultivable area) in J&K is less than 1 hectare i.e.,1:06 hectare which is bound to deteriorate further with increase in population and with little or no scope for increase in cultivable area. Any increase in cultivable area cannot be expected as it would mean reduction in forest coverage which is already less (19.95%) than desirable percentage of 20% in plain areas and 60% in hilly areas as required environmentally. Thus the scope for horizontal expansion in agriculture is very limited. Due to diverse regional typologies, difficult terrain, marginality, fragility, vulnerability to natural events poor infrastructure, only 8% of total geographical area and around 35% of reporting area is under cultivation. Apart from this net area sown constitutes only 31% of the reported area. Another weakness in the agriculture sector relates to inadequate infrastructure, especially roads, communication and market facility. These requirements are of vital importance for the growth of the agriculture sector. The agriculture production is dependent on monsoons. This adds to the risks the farmer faces. The dependency of farmers on monsoons has to be reduced by increasing the irrigation facilities. 9
v Access of small and marginal farmers to formal sources of agricultural credit is limited. The other reasons for low productivity from farm sector are poor technology, excess labour in agriculture, lack of entrepreneural approach, under utilization of agricultural capacity apart from low seed replacement ratio of major crops. Horticulture is no doubt contributing substantially to the State GDP but there are certain problems/weaknesses which are proving as hindrances for further growth of this sector. The problem areas are: Absence of Post Harvest infrastructure - non-establishment of cold storages has locked the growth of this sector. At present, post harvest losses are estimated about 20-30%. Experts say that there are losses to the extent of 10% at field level, 5% at transportation level, 2% during packaging, 9% at storage, 4% at processing level i.e.30% in total. Surprisingly there is not even a single cold storage facility for apple preservation in the valley. The lack of this facility forces the farmers to sell their produce at cheaper rates. There is inadequacy of agro-processing facility. 30% of apple produced in the state are of low grade which can be processed for value addition rather than direct sale. This requires processing capacity of about 3 lakh tonnes per annum. The current capacity of approximately 65000 tonnes is not adequate. Demands in horticulture products can be sustained by developments in agro processing. In fact, there is rising demand for new products like dried powder, fruit based milk mix, juice pouches etc. and under these circumstances the private corporate sector can play a vital role in developing this aspect. Locational disadvantage is another issue of concern. The main consumption markets of the country are far away from production centers in the state. Lack of modern and efficient infrastructure like fast means of connectivity aggravates the problem of transporting the fruit especially of perishable nature to the main markets of the country. J&K has unexploited capacity to produce products which have value demand and ready for attractive markets both in India and Overseas(e.g. bio aromatics, medicinal herbs, organic specialty vegetables etc.) To enable exploitation of these opportunities, major programmes are needed to educate farmers to change production habits and grow crops which the market will reward. v As a part of food habit, per capita consumption of meat, poultry and milk is higher in J&K than all India, but the state is deficient in meat, poultry, eggs and milk production thus making state to heavily rely on imports from other states. v Due to mismatch in demand and supply of mutton, the import of sheep and goat is continuously increasing. During the period 2000 to 2010 the import of sheep & goat has increased by over 26 percent. v The state spends annually an average ` 700.00 crore on the import of mutton and poultry from other states. Given the resources constraint nature of the economy, the State cannot bear this flight of capital. 10
v Inadequate basic development of infrastructure for tourism. v A distinctive feature of population in J&K relates to imbalance of sex ratio, which remains mostly tilted towards men. Census 2011 put the sex ratio for the state as 883 females per thousand males as compared to 940 at national level. The sex ratio has declined by 09 points when compared with 2001 position. v Although, the number of medical institutions has increased considerably over the years from 124 to 3850 (1950-2012) but the dependence of people per medical institution is still very high. The health infrastructure in the state at all levels suffers from shortages that are both qualitative as well as quantitative in nature. v Despite progress made in the health delivery system, but the progress has been quite uneven with huge interdistrict variations and rural and remote areas continue to have deficit in health facilities and man power. Essential and effective steps are required to be taken in building necessary infrastructure in these areas. v Literacy is the main foundation for social and economic growth and a key indicator of development. Notwithstanding the fact, that there has been an improvement in the literacy ratio of the state during the last decade, but still it is a matter of great concern that in J&K out of 100 people 32 are still plagued by illiteracy. Thus the problem of literacy is still at large. Similarly, if we look below at district level there have been disparities in attainment of education across the districts. The policy makers should recognize the vicious cycle of illiteracy and inadequacy of education with poverty, one reinforcing the other, both as causes and effects. There is, therefore, need for addressing these barriers. v Literacy rate among males in the state as per census 2011 is 78.26% against the literacy rate of 82.14% among men at the national level. v Literacy rate among females in the state as per census 2011 is 58.01% against the literacy rate of 65.46% among females at the national level. Gender gap is more wide in J&K as compared to India. v Average area covered per school (Primary, middle, high and Higher Secondary taken together) in the state is 3.52 sq kms in 2011-12 against 2.41 sq. Kms at the national level for 2009-10. v Out of the identified 16480 MW power potential, only 2457.96 MWs or 15 percent have been exploited so far, consisting of 760.46 MWs in State Sector from 21 power projects and 1680 MWs from 04 power projects under Central Sector i.e. 690 MWs (Salal Hydro Electric Project), 480 MWs (Uri-I Hydro Electric Project), 390 MWs (Dulhasti) and 120 MWs (sewa-ii) besides 17.5MW from 02 private sector projects. The prestige Baglihar Hydro Electricity Project, with a capacity of 450 MWs was commissioned during 2008-09. v The state is perpetually energy deficient and has to rely on power purchase from Northern Grid to meet its requirement particularly in winters when its own generation recedes and demand peaks. The base load requirement of the State is about 716 MWs and peak demand is currently pegged at about 2600 MWs. The sixteenth All India Power Survey has projected an increase in power demand of Jammu and Kashmir from 1706 MWs i.e. 9640 MUs during 2004-05 to 2120 MWs 11
i.e. 14750 MUs during 2008-09. By 2010-11, the demand is expected to touch 2441 MWs i.e. 14321 MUs and 4000 MWs i.e. 19500 MUs by 2020-21. v The total availability of power from all the sources is just around 11465.58MUs; the State is under stress to purchase power from other sources. To meet the restricted demand of 11465.58 MUs in the current year, the State may require purchasing additional 7857.72 MUs through short term purchases besides entering into banking arrangements with NVVN, Punjab, Haryana and Chhattisgarh. v The gap between receipts and expenditure on power is widening year by year. It increased by 33.94% during 2011-12 over previous year and reached to `1993 crore. v While the Hydel projects constructed in the central sector allow the state only 12% of energy actually generated, even in the state sector 450 MW Baglihar Hydel Project commissioned recently, the state has to sell about 50% of the energy to outside buyers as a pre-condition imposed by the rendering institutions leaving its own consumers striving for energy. Owing to Indus Water treaty, the state has to choose less economic designs of Hydel projects. v Another area of concern has been the transmission and distribution losses which are very high in the state than at the National level. These losses account for 62% for 2011-12 which includes commercial losses as well. The reasons for such losses are more technical which include existing outdated system. To minimize such losses the system needs upgradation and improvement. Apart from tightening of controls, major structural reforms are called for. v Establishment of regulatory mechanism, metering of feeders and consumers and time bound distribution reforms are some important measures in this direction. v Despite years of planned development efforts and flow of huge funds under various centrally sponsored projects to address the basic needs of the people approximately 20-25 % habitations in the state are yet to be connected by roads. Further when the indicator road density is applied, on an average about 49 km. roads per 100 sq. km. of area are available in J&K which is far behind the national average of 137 km. (2007-08). When we look at district level, huge disparities are across the districts measured in terms of road density on PWD roads. To address the basic needs of the people building of road infrastructure especially in rural areas is essential for fostering sustainable inclusive growth. v v v 07% rural habitations in the state are yet to be provided drinking water facility. Apart from this 13% habitations have been covered partially as on November, 2013. In the banking, outreach the position of J&K is not so good in comparison with its neighbouring States/UTs. Credit Deposit Ratio a key indicator measuring the performance of banks, puts the State to occupy 7th rank in a comparison of 8 Northern States/UTs with 34.36 % as compared to 78.09% CDR of India as on 31.03.2012. Chandigarh has the highest CDR of 113.63% followed by Haryana 102.10%. Jharkhand with a small difference of 0.74% less than J&K is the lowest state among the northern states. Slow technology spread and low level of private sector investment are interalia other weaknesses. 12
What is more important is that the basic socio-economic infrastructure without which the problem of poverty/unemployment cannot be addressed in any meaningful manner is seemingly at a very low level. Apart from this, two most important areas requiring urgent attention are education, health and rural development. Opportunities In order to meet the developmental needs on a sustainable basis, it is imperative to use the bestowed natural resources judiciously. With a strong resource position, the earth of J&K offers excellent opportunities for development. Exploitation of hydro power potential as 85% of identified potential is yet to be harnessed. Due to power deficiency the domestic and industrial sectors continue to suffer badly from problem of power shortage. Hydro Power development plans are envisaged to be framed to tap the untapped potential optimally. Besides accelerating the economic growth this will go a long way to help in reducing the deficit of power which is continuously increasing and reached to ` 1993 crore during 2011-12. Privatize Power Revenue collection to maximize receipts. Achieve 100 percent metering and regularization of all illegal power connections. Transmission and distribution losses in power sector be reduced by taking of projects on PPP mode exploring various ways in a big way. Take-up only those projects which have the potential of generating adequate repayment capacity. Apart from adventure tourism, religious tourism, heritage tourism, J&K has immense potential for Eco-Tourism. Eco-tourism is entirely a new approach in tourism sector. Several terms relating to eco-tourism such as sustainable tourism, green tourism, rural tourism and community based tourism have been emerged over the last 20 years or so. Rural Tourism is currently the focus of attention and is being recognized as an important instrument of growth for rural economy. Planners use Rural Tourism, which also includes eco-tourism and farm tourism to increase economic opportunities for the rural people. In J&K more than 70 percent population lives in rural areas and is solely dependent on agriculture, new opportunities need to be created and Rural Tourism is on the top of the charts on this front. Since tourism has both forward and backward linkages and its importance as a creator of job opportunities is well understood. Tourism as such has emerged as a dynamic industry in India, the challenge is to take full advantage of the situation by ensuring best use of nature s assets. Exploration /extraction of mineral wealth of the state like Gypsum, Sapphire, marble on a massive scale is possible. Restoration of old trade links and opening of new trade links will certainly help to improve the state economy. 13
The skilled manpower available particularly in handicrafts, handlooms, and other export oriented sectors of the economy need to be utilized to reduce unemployment problem in the state. Create environment to attract massive investment in Job oriented schemes for addressing unemployment problem. Because of geographical peculiarities, though there is not much scope for large scale industries in some areas to grow on local input base, there is a huge scope for development of small and medium scale sector. A revolutionary change needs to be brought about in the total farm sector both agriculture and allied areas, like live stock, dairy farming, forestry and horticulture. Fisheries and aquaculture has an edge over other agricultural activities in terms of economic returns and nutritional value. Fisheries development can go a long way in solving the problem of gainful employment to rural population. Addressing issues confronting agriculture like Seed Replacement Ratio, inadequate irrigation facilities, marketing of produce etc. will certainly help in reviving agriculture. For enhancing efficiency of agriculture in the State there is a need to create awareness on farm technology that should motivate farmers to adopt technology and substantially raise productivity and output. It is important to understand that productivity itself will get fillip if the supply chain from farm to consumer is improved. This will lead to farmers getting a higher price for their products and will incentivize them to invest and produce more. Farming system is necessary to achieve higher social benefits and better livelihood of farming community. Land use pattern, soil water conservation and environment sustainability might be given top priority. Organic branded products and effective supply chain management create great impact on agriculture. Crop diversification, risk management and emerging markets are needed to accelerate growth in agriculture. Since banks have a significant role as a catalyst to accelerate the process of agricultural development in the State, they should be proactive and make financial services available to farmers by establishing branches at strategic locations as also through technology applications. In a time bound programme they can provide Kisan Credit Cards to all farmers and where necessary link with insurance companies to facilitate farmers to access insurance products. They can design simple borrowerfriendly lending policy, procedure, documentation and customized and flexible financial products that match needs of farmers. State Govt. should create enabling environment that can improve credit absorption capacity of farmers, accelerate flow of credit and loan recovery simultaneously. Banks, Govt. and print/electronic media can launch massive campaign to create awareness among farmers to avail financial services. 14
Optimum utilization of existing irrigation potential and creation of additional irrigation potential will define the future course of growth of our agriculture. For exploiting the potential of horticulture sector, the following need to be addressed:- Establishment of Cold Storage facilities to improve price stabilization, manipulation of supply to the advantage of the seller and for better sorting, grading and packaging facilities. To exploit the capacity by producing products which have value demand and ready for attractive markets both in India and Overseas(e.g. bio aromatics, medicinal herbs, organic specialty vegetables etc.). Horticulture department has to act as a catalyst for educating the farmers to change their pattern of production techniques. There are immense opportunities to use apple pulp etc. for making baby foods, jams, jellies, squash, juices etc. Food processing industrial units can be promoted by encouraging private sector. There is need to increase the scope of marketing for horticulture produce. Development of wholesale fruit and vegetable markets will provide updated information on the prevailing rates. Contract farming is another mechanism whereby private corporate sector can establish linkages between farmers and markets. Most states have endorsed contract farming. This can be useful instrument for linking farmers to corporate buyers who can provide information and inputs as per specific crops. The promotion of organic cultivation of horticulture crops and establishing convergence and synergy among programmes in the field of horticulture research and development are required. Programmes on demonstration of improved Technologies such as use of improved varieties /hybrids, adoption of INM/IPM practices, high tech farming, precision farming, protected cultivation, post harvest technology and extension support in the field of horticulture need to be launched for improvement in the sector. A higher level of purchasing power is supporting higher demand for protein rich food items. This provides opportunity to step up efforts for increasing production of milk and other dairy products, egg, poultry, fish, meat etc. There have been increases in the prices of these items as supply falls short of demand. Extension facilities to far off and backward places, genetic improvement, introduction of hi-tech commercial broiler for enhancing white meat production and Dropper breed of sheep to increase the mutton production, proper health cover can help a lot in the pursuit of this goal. Livestock is a fast growing sector and to boost it further, new initiatives in the pipe line need to be addressed with more vigour and determination. The State has rich forestry resources which can be utilized in a highly profitable way if they can be nursed and maintained properly. 15
Balance irrigation potential as per Indus Water Treaty particularly through construction of check dams need to be exploited. There is need to increase awareness about new skills & techniques to enhance productivity & quality of food grains through the various schemes implemented through Govt. of India i.e, ATMA, RKVY etc. The state Agriculture Universities are pursuing research to evolve short duration high yielding varieties including hybrids with special emphasis on rain fed areas. More focus is required for visible results. Computerization of TPDS in State has been initiated by creating websites and consumer helpline at Directorate level (CAPD) in first instance to evolve transparency in the system. NABARD funding under RIDF includes around 10% for Agriculture sectors which can be increased to improve the economic scenario of the farming community by giving farmers more liberal financial assistance. The State is blessed with plenty of aquatic resources in the form of rivers, ponds, reservoirs and wetlands. For long fish has been an important food item for the inhabitants of the State. Since almost all people are fish eaters, in addition to the local population tourist and defence personnel are the source of increasing demand for fish, there is a huge gap between supply and demand. World Health Organization (WHO) pegged 11 kg fish per year as minimum nutritionally required fish protein for human being. The State is not able to meet the requirement and is importing fish. There is thus good scope of fisheries development in the State, keeping in view the natural resources on this account. The natural factors are more conducive for handicrafts, village and Small Scale Industries and less to large and heavy industries in the state. Setting-up of small and medium-scale industries in the traditional sectors along-with some new areas like food processing, agro-based units and metallic and nonmetallic products will prove to be the main vehicle for accelerating economic tempo besides providing employment to the educated unemployed youth in the State. For creating industrial base in the state, necessary infrastructure needs to be developed. Apart from this, JKEDI should be strengthened for inculcating entrepreneurial behaviour among the youth of the state, besides implementation of Skill Development Mission in a missionary mode. Handicraft sector has a tremendous potential for foreign exchange earning and creating more employment opportunities in the state. It requires promotion of handicraft goods of national/international levels. Holding national, international trade fairs, buyer-seller meets, and interface with the overseas markets will help in this behalf. To give boost to this industry requires laying focus on product designs and diversification, providing credit facilities, enhancing weavers productivity through upgradation of skills and use of efficient looms, Market access to handloom products through marketing incentives and wide publicity. 16
Encouraging private investment in setting up of industries in the state, for which relaxation in the form of concession and incentives needs to be given. Handicraft Micro Enterprises Scheme which aims at providing easy and soft credit facilities to artisans, weavers and other craftsmen needs to be made more effective. Diversification of crafts is proposed to be addressed under compressive cluster development Programmes launched by GOI. The State of J&K is endowed with tremendous mineral resource covering an area of 13334 sq kms out of which 60% are reported to be commercially viable for mining of various minerals. The Jammu-Srinagar Highway is the only lifeline that connects the state to the rest of the country. The government has taken the initiative of creating an alternate highway via Shopian-Bufliaz popularly known as Mughal road. The construction of this road is presently going on in full swing and the project is expected to be completed by 2013 under the Prime Ministers Reconstruction Plan (PMRP). This will provide much needed mobility facility to the people. The railway network is a recognized mode of communication, which has started making its presence felt. This was realized through commissioning of Qazigund Anantnag Mazhom -Baramulla Rail link. The rail connectivity under Jammu- Udhampur-Qazigund section is the final missing link. This connectivity scenario has rendered the State dependent on road connectivity for common mode of commutation. Services is a dominant sector in terms of both growth and share to GSDP. In terms of employment it is second to agriculture. The Services sector is the primary source of employment in urban areas. As per report on employment and unemployment situation in India 2009-10 for every 1000 people employed in urban areas 662 are in Services sector including construction. This indicator at all India is 683. Unlike the un-skilled or semi-skilled nature of jobs in the agriculture sector, this sector provides myriad job opportunities ranging from highly skilled to unskilled in a variety of activities. The present growth tempo needs not only to be maintained but also to be accelerated. To improve sex ratio, a reward scheme has been introduced where under ` 25000 are being given to any person who informs the occurrence of sex determinants/ female feticides. A new scheme called Janani Shishu Suraksha Karyakaram(JSSK) Maa Tuje Salam has been launched in all Govt. hospitals of the sate including medical colleges where free services are provided to the pregnant woman and sick new born children up to 30 days after birth. Maternal Death Audit and Infant Death Audit has been introduced to ascertain the cause of maternal/ infant deaths to help the planners to chalk out strategies for reducing the level of MMR and IMR in the state. 17
NRHM has proved to be a very useful intervention in supporting activities aimed at filling up the critical gaps in the delivery of health system to make it more responsive effective and efficient through a multi prolonged approach. The National Health Policy aims at achieving an acceptable standard of good health amongst the general population of the country by increasing access to the decentralized public health system. Access to decentralized public health system is sought to be increased through establishment of new infrastructure in deficient areas and upgrading the existing infrastructure. Information Technology is emerging as an important sector in transforming the socioeconomic lives of the people. Thus special emphasis has to be given on information Technology Industry. The Industry could absorb a huge educated job seekers. The state has a large number of educated job seekers and provides greater scope for development of Information Technology. Various facilities like e procurement, video conferencing have been put in place with efficient results. Various schemes like JAKEGA, CSC, SWAN, SDC, SSDG, CIC, UID, have been sanctioned to boost working and growth of IT sector. Focus on woman education, various programmes are effectively implemented like SSA, National Programme for Education of Girls at Elementary Level (NPEGEL), Kishori Shakti Yojna, etc. Vocational training centers are being developed throughout the state to impart skilled training to woman in various craft and other traditional trades as well. The Total Sanitation Campaign renamed as Nirmal Bharat Abhiyan (NBA) emphasize more information, education and communication, human resource development, capacity development activities to increase awareness among the rural people and generation of demand for sanitary facilities and accelerated sanitation in rural areas. Precisely infrastructure development is the key to long-term sustainable growth of the economy. A pragmatic approach is required to be adopted for building necessary socio-economic infrastructure like roads, transport communication, power generation, education, water resource management sanitation etc. Such development process will not only lead to create employment opportunities but also it will prepare the ground for much larger productivity in primary, secondary and tertiary sectors helping reduction of unemployment and poverty. THREATS Sex ratio is decreasing at an alarming rate. It has declined by 9 points and reached to 883 females per thousand males in 2011 when compared with 2001 level. What is more worrying is that child sex ratio (0-6 years age) has drastically declined from 941 in 2001 to 859 in 2011. Fragile soil in hilly areas is susceptible to soil erosion. State is deficient in food grain production by around 24 %. 18