The Ideology for the New Millennium
THE NATION: KASHMIR ECONOMY
Great Sop Story
OCTOBER 14, 2002:- India today
Jammu and Kashmir is the most pampered state which is why the people prefer India to Pakistan
By Shankkar Aiyar
These are telling facts. The whining and whimpering of the first family notwithstanding, Jammu and Kashmir is the most pampered state in India. Since the beginning of militancy in 1990, the state has managed to get the lion's share of Central resources-over Rs 35,571.3 crore in grants and assistance. In 2001-2, for instance, Jammu and Kashmir got Rs 4,577 crore from the Centre or over 10 per cent of the assistance to states. It has got more than any other state every year since 1995. Add to this projects in the state worth over Rs 25,000 crore being funded by the Centre (see chart).
If Kashmiris have turned out in large numbers to vote (the average turnout in the first three phases exceeded 45 per cent) despite Pakistan's efforts, it displays not just their understanding of politics but also sound economics. A Kashmiri gets eight times more money from the Centre than citizens from other states. While per capita Central assistance to other states moved from Rs 576.24 in 1992-93 to Rs 1,137 in 2000-1, that of the Kashmiri spiralled from Rs 3,197 to Rs 8,092. To get a perspective, translate the numbers: if this cash, managed by the state Government, were to be despatched by money order, each Kashmiri family (with five members on an average) would get Rs 40,460 every year.
For all that talk of autonomy or azadi, the fact is that Jammu and Kashmir cannot sustain itself without the Centre's support. In 2001-2, the state spent Rs 7,516.6 crore of which Rs 4,577 crore-or 60 paise of every rupee spent-came from the Centre. The state's non-development expenditure was Rs 2,829 crore including a salary bill of Rs 1,193 crore while its own revenues were barely Rs 1,095 crore. The state could not have paid even the wages of its employees without the Centre's help.
Some in Jammu and Kashmir could argue that the state can look after its affairs given its high-value addition exports of handicrafts, its unchallenged position as a tourist attraction and, of course, the export of fruits and flowers. You could perhaps say that the strife and terror may have affected the state's budget. But could Srinagar have managed an expenditure budget of over Rs 7,500 crore on its own steam? Unlikely. In any case, in a perverse way, the conflict has contributed to the state's GDP. The 5.5 lakh security forces deployed in Jammu and Kashmir are willing buyers who add to its consumer base both for local and manufactured produce. Interestingly per capita consumption expenditure in Jammu and Kashmir has shot up from Rs 134 per month in the 1980s to Rs 746 in 2000.
Pump Priming: Besides direct assistance and grants, the Centre is pushing major projects in Jammu and Kashmir worth over Rs 25,000 crore
Vajpayee announces J&K package in May
Rs 4,496 cr
Link: Rs 446 cr
Udhampur-Srinagar-Baramulla Project: Rs 3,564 cr
JammuTawi-Jalandhar Link: Rs 486 cr
Rs 1,700 cr
NH 1-A Project: Rs 1,200 cr
Batote-Kishwar-Singhan Pass: Rs 200 cr
Leh via Manali Road: Rs 1,300 cr
A border road under construction
Rs 318 cr
Reconstructi-on of gutted bridges: Rs 224 cr (1997-2001)
Planning Commission projects: Rs 29.73 cr
Schools: Rs 64.63 cr
Rs 16,000 cr
Salal Power Project: Rs 921.21 cr
Dulhasti Hydro Project: Rs 4,279 cr
Uri Project: Rs 3,300 cr
NHPC also plans seven other projects
Rs 115 cr
Dal Lake clean up: Rs 100 cr
82 tourist facility projects: Rs 19.24 cr (only Rs 12.61 cr used)
Leh Convention Centre: Rs 2.46 cr
Indeed, even the security-related expenditure incurred by the state is reimbursed by the Centre. A report reveals that between 1990 and 2002, the Centre paid Jammu and Kashmir Rs 2,432.59 crore as grants-in-aid. In fact, the Centre also pays for the financial assistance to Kashmiri migrants, the ex gratia paid to people killed in terrorist acts and public works related to security. Plus, while other states get Central assistance in the ratio of 70 per cent debt to 30 per cent grant, Jammu and Kashmir (as a special category state) got 90 per cent of its assistance as grant and only 10 per cent as debt. Since 1997-98-though the Comptroller and Auditor-General has indicted the state Government for misuse of plan funds-even the 10 per cent repayment criteria has been removed and the Centre has been funding the entire plan expenditure of Jammu and Kashmir or Rs 11,400 crore in five years.
Not surprisingly, last month in an ACNielsen opinion poll only 1 per cent of the respondents favoured being a part of Pakistan. Earlier in May, London-based Mori International, an independent research outfit, along with facts Worldwide asked respondents from the strife-torn state to choose between India and Pakistan. Sixty-one per cent of the Kashmiris polled asserted that they would "be better off politically and economically as an Indian citizen" and only 6 per cent favoured a switch to Pakistani citizenship.
To appreciate the sentiments ponder over the conditions in Pakistan-Occupied Kashmir or what Pakistan refers to as Azad Kashmir. A July 2002 World Bank report provides a view:
88 per cent of the territory's 2.9 million people live in rural areas dependent on forestry and agriculture.
Unemployment ranges at 35 per cent to 50 per cent.
Per capita income is $185-200 (about Rs 9,500).
Literacy is only 48 per cent and has only recently risen from the earlier 10 per cent.
60 per cent of the population has no direct access to water supply.
Significantly, this is the scenario despite the territory not having to face terror like Jammu and Kashmir. Last year, the Pakistan Government unveiled a Khushal Kashmir Programme with a corpus of Rs 28.9 crore. Compare this with the Rs 6,165 crore package announced by Prime Minister A.B. Vajpayee in May this side of the border.
It is clear that the grass is greener in the Valley. Jammu and Kashmir has the lowest poverty level in the country. The number of people living below the poverty line has dropped from 24.24 per cent in the 1980s to a mere 3.46 lakh people (3.48 per cent), compared to 26.10 per cent across India though the state's contribution to the GDP was less than 1 per cent in 2000-1. If the literacy rate is lower than the national average of 64.38 per cent at 54.46 (but higher than that of PoK) it is due to the gutting of school buildings by terrorists. Also agriculture (average yield is 1,728 kg per hectare) has not suffered despite the strife thanks partially to the Rs 804 crore aid from the Centre's Rural Development Department.
In terms of autonomy Jammu and Kashmir is the only state with its own constitution, privileges under Article 370 of the Indian Constitution and it even banks with the J&K Bank, not the RBI like other states. If the Kashmiris feel alienated it has more to do with the quality of local administration. With hopes of a new regime on the horizon, staying with India makes both political and economic sense for Kashmiris.