Jammu and Kashmir is one of the most underdeveloped state in the country with weak infrastructural facilities and where rural poor do not have access to quality healthcare services.
Access to national capital markets is limited and unorganized sector is still in the primitive stage of an organization with hardly any exposure. The per capita net income of J&K is miserably very low when compared with neighbouring states namely Haryana, Punjab, Himachal Pradesh and New Delhi. There is huge volatility between the incomes of residence in rural areas with those living in the urban areas.
The Gross State Domestic Product (GSDP) of agriculture sector has been falling considerably. Growth in industrial sector is showing fluctuating trend. This grim scenario of state economy has been brought on paper by Department of Economics and Statistics in its report on the state of economy in Jammu and Kashmir.
In its annual report, the Department has said that growth rate has come down sharply from what it was in the year 2006-07.It has added that despite government making serious efforts to address the issue of declining growth rate not much has changed. According to this report, J&K’s industrial front is a cause of concern. The share of industry to GSDP has not changed from 22-25 percent even marginally.
This stagnancy in the industrial sector is there despite government taking several steps to promote industry, bring in capital and make the economy more vibrant. Several industrial units have closed down while hundreds of small scale industries are running in losses. And when those who come from outside the state, set up an industry, reap benefits which the state enjoys due to its peculiar position, situation worsens.
Industry has failed to address issue of being unable to contribute in improving the state of economy of Jammu and Kashmir. J&K is ranked 21st in the country in terms of share of manufacturing GDP. More shockingly, J&K is contributing around 0.4 percent of India’s manufacturing GDP in 2011-12.
Of the J&K working population, the business sector has employed a mere 0.4 million people i.e. around 7.6 percent. It goes on and maintains that industries suffer from unscheduled power cuts. The quality of power is very poor. It is around average 8 hours of supply per day.
Land availability in the industrial estates is limited and it takes longer for water intensive industries to obtain a water connection. Pointing out that state government offers a range of incentives under the Industrial Policy 2004 like 100 percent subsidy on new DG sets, stamp duty exemption and interest subsidy, survey has stressed that it takes more than a year to avail incentives.
Majority of respondents were not satisfied with the experience of availing incentives on account of excessive time taken (more than a year) to avail the incentives, excessive documentation requirements and need for multiple visits to the concerned department, maintains the report. Further, the report says that power connection requires on an average 280 days corresponding to bottom 20 percentile.
People were not satisfied with the experience of obtaining power connection. Interactions with Industry associations and state government officials indicated that the primary reason for the delay is excessive time taken in load sanctioning due to power shortage in the state. However, the commission has recommended the state for taking effective corrective measures.
In another embarrassment to the state government, the report has maintained that manufacturing units in Jammu and Kashmir have faced difficulties in complying with the requirement to hire at least 55 percent of employees from the state. The unit holders maintain that sufficient number of skilled workers are not available in the state and hence, they have to bring people from outside.