The UT of Jammu and Kashmir contributes 0.83% to the country’s GDP and has a population share of 0.99%. The UT is yet in the infancy stage of development in terms of infrastructure and other developmental parameters. The economy of UT is much dependent on services sector which is currently contributing 59.47% to the GSDP (MOSPI). Like India, J&K is also seeing the transition from primary sector dominance to services sector dominance, omitting the usual way of development via secondary sector. The UT is missing the role played by private investors despite having appreciable avenues of safe and profitable investment. The picture of J&K economy could have been much brighter, had the government investment been augmented by private investments.
There are various reasons behind low private investments in UT, one prominent being insecurity. But the time has changed now and private investors have shown positive signs, be they from India or from foreign countries. Government is also taking steps by which private investors could be encouraged. The Lt Governor recently launched single window clearing system to ensure ease of doing business. There is dire need of many more such initiatives. Recently J&K has signed slew of MOUs with Abu Dhabi to build strong business relations. We expect this only to be a start.
Here in J&K the government has a bigger responsibility to encourage the domestic investors by providing them many incentives via tax rebates, subsidies and such like. Side by side, the government should also invite investors from outside, ensure them secure and cooperative business environment in the UT. There are many fields where private investors can step in and reap appreciable profits out of their investments. One vacant field for investors is undoubtedly the field of Higher Education. There is a large gap between the demand for higher education in the UT and the institutions to supply so. There is deficiency from higher collages to universities, from vocational institutions to technical institutions. J&K spends 12% of budget on education. Every year, around 60,000 students pass higher secondary (Class XII) examinations. Of these, more than 15,000 (25%) seek admissions in colleges outside Jammu and Kashmir, highlighting a glaring gap in the education infrastructure of the UT at the college and university level. Likely the same percentage of students goes outside for studies at other levels. Most parents feel insecure while sending their wards (mostly girls) out of the state for study purposes. There are only 12 universities in the UT. This small number of educational institutions especially in higher education leads to least competition and eventually little focus is given to quality of education they provide, hence leading to inefficiency.
There is ample availability of qualified degree holders who are ready to work at less remuneration due to existence of high unemployment rate in the UT. Investments can have a huge positive spillover effect on most of the stakeholders involved. Students of UT wouldn’t need to go outside for their studies, it will enhance competition and eventually quality of education. It will help the government in creating employment and increasing literacy. For investors, it will serve as a source of profitable investment. The problem which has acted as a hurdle is that such establishments need a huge amount of initial capital. There is a lack of such potential investors in the UT. Government need to invite the potential investors from outside to step in for filling this gap and thereby play its role for the prosperity and development of the UT.
—The writer is a research scholar in Economics. [email protected]