Jammu and Kashmir’s economy is predominantly dependent on agriculture and allied activities and is also known for its sericulture and cold-water fisheries. Wood from Kashmir is used to make high-quality cricket bats, popularly known as Kashmir Willow. Kashmiri saffron is also very famous and agricultural exports from Jammu and Kashmir include apples, barley, cherries, corn, millet, oranges, rice, peaches, pears, saffron, sorghum, vegetables, and wheat, while manufactured exports include handicrafts, rugs, and shawls.
Horticulture plays a vital role in the economic development of Jammu and Kashmir. With an annual turnover of over Rs. 300 crore, apart from foreign exchange of over Rs. 80 crore, this sector is the next biggest source of income in the economy as the region is also known for its horticulture industry and is the wealthiest part of economy which includes apples, apricots, cherries, pears, plums, almonds and walnuts. The Doda district has deposits of high-grade sapphire.
In recent years, several consumer goods companies have opened manufacturing units in the region. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) identified several industrial sectors which can attract investment and accordingly, it is working with the union and the UT government to set up industrial parks and special economic zones. In the fiscal year 2005–06, exports amounted to the tune of Rs. 1,150 crore was recorded. However, industrial development in Jammu and Kashmir faces several major constraints including extreme mountainous landscape and power shortage.
As per the data available on the official portal of union territory of Jammu and Kashmir, the government of India has been keen to economically integrate Jammu and Kashmir with the rest of India. The union territory is one of the largest recipients of grants from New Delhi, totaling $ 812 million per year. It also has a mere 4% incidence of poverty, one of the lowest in the country.
The industry sector has been declared as the main vehicle for accelerating economic activity besides providing employment to the educated unemployed youths in Jammu and Kashmir. Development of industrial infrastructure has been the focus of special attention during the last few years. At present around 51 industrial estates and many more are in the process of being developed and efforts made over the past few years have started bearing fruits.
Presently, registered Small Scale Industrial units are operational in the union territory and have provided employment. Medium and large Industrial development always remains a thrust area in the government’s agenda. In the perspective of industrial growth, industries and commerce department has been established with a system for carrying its activities effectively for concentrating to attract investments.
The new industrial policy aims to receive investments from outside and promote the ease of doing business in the two union territories, making steadfast economic activities in various sectors. The recent investments of around Rs. 23,000 cr shows the immediate success of the industrial policy assuring rapid socio-economic development in Jammu and Kashmir.
The new industrial policy has an expenditure outline of Rs. 28,400 crore meant for the next 15 years. This makes it the largest economic allotment made to Jammu and Kashmir till now. The incentives are supposed to garner investments around Rs. 20,000 crore and generate employment of 4.5 lakh. The policy will foster industrialism with the help of local talent, skills and resources.
The policy now includes additional sectors such as education, tourism, health, renewable energy, and outside investments in IT, tourism, renewable energy, etc. and have summed up to Rs. 23,000 crores.
Different committees shall also decide the incentives on district, division and UT levels. The DIC shall approve the incentive cases up to Rs 5 lakh in the District Level Committee, and Division Level Committee shall approve the incentive cases from Rs 5 lakh to Rs 50 lakh while UT Level Committee shall approve the incentive cases exceeding Rs 50 lakh.
Capital investment incentives have also been enlisted and was described that capital investment incentive will be made available at the rate of 30 per cent in Zone A (urban) and 50 per cent in Zone B (rural) on the investment made in plant and machinery (in manufacturing) or construction of the building and other durable physical assets (in the service sector.
One can find the general approach of the central government regarding the free market and investments in the newly formulated policy for Jammu and Kashmir also. The government has acquired the role of facilitator rather than the regulator. Making Jammu and Kashmir a preferred investment hub by opening it and promoting industrial houses are in line with the assurances of high development of the region and welfare of the people.
Educational institutions, meat processing, apple and food processing and BPOs are the significant sectors investing in Kashmir. The main focus of the policy in Kashmir will be on the service sector owing to the difficulties in the transportation of goods in and out.
The policy has also kept the ecological sensitivity of the region in fair consideration, and it has been planned from a long-term approach so that a conducive environment for industries can be created and they can function smoothly even after the incentives are withdrawn after a given point of time.
Investments have also been made for power generation as three MOUs were signed with the National Hydroelectric Power Commission recently to generate 3000 MW additional power.
The policy has also kept the ecological sensitivity of the region in fair consideration, and it has been planned from a long-term approach so that a conducive environment for industries can be created and they can function smoothly even after the incentives are withdrawn after a given point of time.
