An Introduction to Jammu & Kashmir Economy

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Introduction to the economy of Jammu & Kashmir

 

The pillars of any state rest on the building blocks of Economy, Environment, Education, Employment and Healthcare. Although each block is indispensable for the strength and development of a progress yet “Economy” is the foundation on which the flourishing of a state depends. When we talk of measuring the size and performance of any economy we take assistance from time tested and globally accepted quantitative techniques of economics. One such main indicator of measuring national income is the “Gross Domestic Product” (GDP).
The Gross State Domestic Product (GSDP) also known as State income estimates are the macro-indicators of the State economy. These estimates give broader results due to different policy interventions, investments made and opportunities opened up in the State. The advance estimates for 2015-16 put the GSDP at Constant prices(2011-12) at Rs 91806.25 crore. According to these estimates the per capita GSDP for 2015-16 has been Rs.57858 . During the period, GSDP at constant prices recorded growth rate of 7.79% during 2015-16 over previous year, per capita GSDP for the same year has increased by 6.57%. The relative growth rate figures in GDP and per capita GDP for 2015-16 at constant prices were 7.60%(GDP) and 6.23%(Percapita income). Likewise GSDP at current prices for the year 2015-16 has been evaluated at Rs.11610.98crore measuring the per capita income at Rs 74580. Theserespective estimates at all India are Rs.13567192 crore and Rs.93231 for 2015-16. GSDP during 2015-16(AE) has risen by 13.07% over previous year and per capita income has increased by 13.69% at current prices. During 2015-16 over 2014-15 growth rate in GDP and per capita GDP at current prices are 8.71 % and 7.31% respectively.

The three important components of the state’s GSDP are Agriculture & Allied sector, Industry & Manufacturing and Services. Respective contributions of these sectors during 2015-16 have been 15.89%, 27.11% and 57.00%. The highest increase of 8.37% has been observed in Tertiary sector followed by 21.57% and 0.40% rate of growth in Primary and Secondary sectors respectively during 2015-16.

Agriculture & Allied Sectors:

The contribution of Agriculture sector to GSDP as steadily declining. But agriculture sector is demographically the largest economic sector and plays a remarkable role in the overall socioeconomic fabric of the state. Boosting Agricultural growth is very essential for inclusive growth. The sector sustains livelihood of over 70 percent of the population. However, the contribution remains only 15.89 percent to GSDP. This is because the productivity of major agricultural crops is very low in comparison to other states and rest of the country .Technological and scientific insufficiency in agriculture sector seems the important cause. The yield per hectare of food grains, fruits and vegetables are far below the countrylevel.Agriculture is the single most important livelihood for the people. Paddy, Maize and Wheat are the major crops of Kashmir region. While maize and wheat are the major crops of Jammu region. Barley is the major crop of Ladakh region followed by wheat. The state is bestowed with different agro climatic conditions for growing a variety of horticulture crops like fruits and vegetables, plantation crops and floriculture. Kashmir’s agriculture is famous worldwide as the world’s high quality saffron is produced in valley and its mainconcentration is in Pulwama&Budgam districts. Kashmir province accounted for nearly 98% of the total area in the state under the crop is cultivated and Jammu division is confined to few pockets. The state ranks first in the country in the production of saffron. It is the world’s most expensive spice and the most famous ingredient for colouring and flavouring butter, cheese, confectionary, backed food and medicines.

The suitable climatic conditions and fertile soil of the region provide huge scope for development of horticulture sector. Moreover, this sector is labour intensive in nature and provides employment opportunities to a significant number in the processing of its produce and contributes substantiallyin the state economy. A large variety of fruits such as apple, pear, walnut, almond, cherry, apricot are produced in the state. In fact export of fruits form the base of the state’s trade. According to data, the percentage of gross irrigated area to gross cropped area in the state is decreased as 44.75% for the year 2015-16 as against 45.32% at national level for 2008-09. With enough of grazing land in hill areas of the state, livestock is of distinct advantage and an integral part of the agrarian sector. Rearing of livestock is best suited to these areas and plays an important role in encouraging mountain farming. The agrarian nature of the state provides tremendous scope for encouragement of all agriculture related sectors like, mushroom development, apiculture, floriculture, fisheries, sericulture development etc. According to 2007 census, the state contributes about 2% in the total livestock of the country. As per ISS report for 2010-11, milk production of the state was estimated at 16.09 lakh metric tonnes. Dairy is the backbone of livestock sector in the state. As per 19 th livestock census 2012,the number of poultry birds  was 82.73 lakh in the state as compared to 7292.09 lakh in India. During 2015-16 Fish production of the state has reached to 2.00 lakh quintals.

Tourism: Tourism is emerging as one of the most important contributor to the state economy. The state has a world class potential in tourism which ranges from historical and religious destination to its natural fascination. The Kashmir valley is well-known for its gorgeous natural beauty, splendid scenery throughout the world. Its high snow clad mountains scenic spots, beautiful valleys, gushing rivers, attractive lakes and springs, lush green forests, pastures, meadows and beautiful health resorts enhance its grandeur are a source of great attraction for tourists all-round the year. Pilgrimage to famous religious shrines of the Hindus and Muslims make Kashmir valley a great tourist attraction. In fact Mughals have rightly described Kashmir valley as the “paradise on earth”. Government also paying careful attention for the 11 developmental projections of this sector such as operationalization of Gandola Cable Car Project at Gulmarg, golf course at Srinagar (Royal springs), Gulmarg&Pahalgam. During the Year 201, Kashmir Valley witnessed inflow of 623 thousand tourists including foreign tourists. The Handicraft sector maintains an important place in the economic structure of the state and has worldwide acclaim for high quality craftsmanship, attractive designs and functional utility and crafts like embroidery, shawls, crewel, namda, chainstich, woodcarving, papier-machie, kani shawls, costume, jewellery and carpets hold a significant share in the overall production and export of state. Silk carpets constitute a specialty having no parallel in quality and design at national level and, therefore, occupy an important position in the international market as the carpet industry is contributing towards foreign exchange reserve of the country. Handloom industry is the largest unorganizedsector as it specialized in manufacturing of fabrics like pashmina shawls, ruffle shawls, shahtoosh shawls, silk sarees and other cotton items which have great demand in the national and international markets.

Banking: Banks dominated the financial market of the State. Infrastructure development has heavy dependence on bank financing. The insurance sector though well capitalized is significantly opened to banking system. Banking sector of J&K consists of Public sector Banks, Private sector Commercial Banks, Regional Rural Banks and Central/State Co-operative Banks. Their performance has been progressively improving in respect of mobilization of savings, deployment of credit, disbursement of micro credit under NABARD’s Self Help Group, Bank Linkage Program supporting Government Programs etc.

Power:The state has a potential to generate 20,000 MWs of hydro power of which only 16475 mws of hydel potential has been discerned. The power generated by the State for 2015-16 is 3990.127 million units under state sector power projects against 104867.3 MU of in 2014-15.

Roads: The sustainable and inclusive economic growth calls for an effective and substantial road network. Road infrastructure is crucial for sustainable growth of the economy alongwith industrialization.The NH-44 connects the capital cities of Srinagar and Jammu with rest of the country .The total length of roads in the state ending March 2015 was 39096 km as compared to 5472144 km in India. The BanihalQazigund road tunnel, which is 8 km long, is under construction and and may be completed by 2018.

Development towards building up railway infrastructure is at pace in the state. Rail transport is available now from Lakhanpur to Katra in Jammu region and from Banihal to Baramulla in Kashmir region. Construction of 237 Km long rail line from Katra to Baramulla in Kashmir is in full swing and may be completed by 2020. Indian Railways are making strong efforts in developing and providing rail link up to Kashmir. This special project has been declared as National Project in 2020.  Recently 11 km long railway tunnel, located in PirPanjal range,  fromBanihal to Qazigund has been commissioned. This tunnel is Asia’s 4th longest and India’s longest.

Poverty:Poverty reduction is one of the main goal of development Planning. As per the survey results, the total BPL Estimated Population Ratio of J&K State has been reached at 21.63 percent (24.21 lakhs persons) of which 26.14 percent (22.00 lakhs persons) are from Rural areas and 7.96 percent (2.21 lakhs persons) are living in Urban areas. This shows that about one fifth of the State’s population falls below the poverty.

 

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