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Potential and Prospects

of J&K Economy


ii

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By

Dr. Tariq Ahmad Bhat

Tariq Ahmad Lone

EDUCREATION PUBLISHING (Since 2011)

www.educreation.in


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v

Dedicated to

Our Parents


vi

Preface

This book endows with a lucid exposition and

comprehensive analysis of almost all sectors of J&K

economy. This book is a collection of some research papers

published in various journals and is written in reader-

friendly style and is designed to acquaint students, scholars,

and other readers about the fundamental aspects of the

State economy like agriculture, horticulture, sericulture,

power, health, handicrafts and so on. In short, this book is

designed to provide readers an overview of the Jammu and

Kashmir Economy.

X


vii

Content

Sr. Contents Page no

1. Chapter 1

Overview of the Jammu and Kashmir Economy 1-7

Macro Economic Status of J&K Economy, Sectoral composition of

J&K’s GSDP, Employment Scenario in J&K, Poverty Status of J&K

State

2. Chapter 2

Status of Agriculture 8-26

Introduction, Scenario of Agriculture in Jammu and Kashmir, Land

pattern, Cropping Pattern- Kharif or summer season, Rabi or winter

season, Zaid crops, Rice, oil seeds, Maize, Saffron, Fruits and

Vegetables, Production of Food and Non food Production, Irrigation-

Source of Irrigation & Crop wise Irrigation, Occupational Structure,

Work Force, Conclusion, References.

3. Chapter 3

Status of Horticulture in Jammu and Kashmir 27-41

Introduction, Apple as an Engine for Economic Growth, Scenario of

Apple Production in India, State Wise Production and Productivity,

Scenario of Apple Production in Kashmir Valley, District Wise

Production and Productivity, Different Varieties of Apple Grown in

Kashmir-Delicious, Ambri, American trel, Maharaji and Kaseri,

Conclusion, References.

4. Chapter 4

Macro Analysis of Sericulture Industry of J&K State 42-61

Introduction, History of Sericulture in Jammu and Kashmir,

Economic opportunities provided by Sericulture industry-

Employment, Indirect Employment Benefits, Involvement of Family

Labour, Growth Potential, Reducing Inequality in Income, Women

Empowerment, Cocoon production, Employment Generation, Raw

Silk Production, Distribution and Share of Cocoon Production,

Conclusion, References.

5. Chapter 5

Status of Saffron in Jammu and Kashmir 62-82

Brief History of Saffron, Saffron Production in World, Saffron in

Jammu and Kashmir, Mechanization of Saffron Cultivation- Land

Preparation, Corms Planting, Weeding/Hoeing, Harvesting and

Drying, Corm Digging, Flowering, Packaging, Health benefits of


viii

Saffron- Medicinal uses, Present Position of Saffron in Jammu and

Kashmir, District wise Production and Export and Import of Saffron,

Yield Enhancement, National Mission on Saffron, Problems,

Suggestions, Conclusion, References.

6. Chapter 6

Potential and Development of Power Sector J&K 83-90

Introduction, Power Development in J&K State, Potential of Power

Generation, Installed and Generation Capacity of Power Houses,

Sector Wise Energy Consumption, Steps need to be taken to improve

the power sector in the state of Jammu and Kashmir, Incentive

packages for power producers in private sector, Indus Water Treaty,

Conclusion

7. Chapter 7

Status of Handicraft Industry in J&K 91-100

Introduction, Different crafts of Kashmir- Kani shawl, Paper Machie,

Khatamband, Carpet Weaving, Wood Carving, Kishtwar straw work

“binna”, Kandkari copperware, Thangka painting, Tilla work,

Lachka, Kanger, Phuk-Kari, Production of Handicraft Goods,

Exports, Employment, Thrust areas for 12 th Five Year Plan,

Problems, Major steps taken by government for handicrafts,

Suggestions, Conclusion, References.

8. Chapter 8

Status of health in Jammu and Kashmir 101-104

Vital Statistics, Health Infrastructure in the state, Relative Position of

Health indicators in the state, Role of Health in Economic

Development, References.


Potential and Prospects of J&K Economy

1

Chapter 1

OVERVIEW OF THE

JAMMU AND KASHMIR ECONOMY

Introduction

Jammu and Kashmir is a state that has its own distinct and peculiar cultural ethos. The

state is categorized as special category state given its geographical and other related

features has an immense potential for rapid and sustainable economic development. The

state is loaded with natural resources which if harnessed can turn this state into net

surplus generating economy from present stance of a credit striving state.

“if there is paradise on earth. It is here, it is here, it is here” a said by Emperor Jahangir.

The State of Jammu & Kashmir is blessed by Gods, surrounded by some of the highest

peaks of the world and has immense beauty. The State is situated in the extreme north of

India and on the basis of area state is sixth largest state of India. The state shares borders

with china in the north and east, Afghanistan in the north-west, Pakistan in the west and

by the States of Punjab and Himachal Pradesh in the south. The State of Jammu &

Kashmir has three broad geographical regions i.e.

i) Ladakh

ii) Kashmir Valley and

iii) Jammu.

According to Census 2011 state has 22 districts, 142 blocks, 3 municipalities, 6,758

villages and 75 towns. The state covers an area of 222, 236 Km. The density of the

population of the state is 124 persons per sq. Km. According to the census 2011 total

population of Jammu & Kashmir state is 1.01 crores and constitutes 1.04 % of the total

population of the country. Out of this population 6665561 are male and 5883365 females.


Dr. Tariq Ahmad Bhat, Tariq Ahmad Lone

2

The rural population constitutes 72.79% and urban 27.21% only. The total literacy rates

during 2011 was 68.74 and male literacy was 78.26% while as female literacy was

58.01%.

Macro Economic Status of the J&K Economy

Jammu and Kashmir Economy Jammu & Kashmir state with its varied and diversified

geographic, agro-climate and topographic features poses peculiar and unique problems of

development. Gross State Domestic Product (GSDP) of J&K state during 2012-13 (at

current prices) has increased to Rs. 75574.31 crores (quick estimates) from Rs. 65758.52

crores (quick estimates) of 2011- 12 registering a growth of 14.93% during 2012-13. The

growth as per advance estimates for the state during 2013-14 at current prices is projected

at 15.54%. Similarly the State economy is expected to grow at 5.88% (advanced

estimates at constant 2004-05 prices) during 2013-14 as compared to achievement of

5.51% in 2012-13 (quick estimates). The tables given below show the growth of the

economy of J&K State viz-a-viz National level at current and constant (2004-05) prices: -

Table 1.1: Gross Domestic Product of J&K and India at current prices

Year 2004-05 2009-10 2010-11 2011-12 2012-13 2013-

14

GSDP of J&K

(Rs. Lakhs) 2730462 4838451 5807257

6575852

(QE)

7557431

(QE)

873187

2(AE)

GDP of India

(Rs in Lakhs)

2971464

00

6108903

00

7248860

00

8391691

00

9388876

00 ---

%

Contribution

of J&K to

India

0.92 0.79 0.80 0.78 0.80 ---

Per capita

GSDP of J&K 25478 42052 49809 55699 63232 72188

Per capita

income of

India

27286 52213 61120 69814 77148 ---

Growth rate

J&K (%) --- 14.34

20.02

13.24 14.93 15.54

Growth rate

India (%) --- 15.2 18.07 18.8 11.9 ---



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The state Government on its part has not only implemented the national strategies but has

launched various state specific strategies to achieve the goal of "Faster, More Inclusive

and Sustainable Growth". In addition to national initiatives like universalization of

elementary education, health facilities for all, providing drinking water supply,

MGNREGA, food security act, State initiatives like Sher-i- Kashmir Employment

Welfare Programme, Seed Capital Programme, Youth Start-up loan, Women

Entrepreneurship Programmes, creation of new administrative units, exploration of new

tourist areas, crop diversification and food processing etc, are some of these.

J&K contributes approximately 0.76 % to national GDP and ranks 20th in the list of

contributing states. The national GDP growth rates have slumped from 9.48% in 2005-06

to 6.88% in 2011-2012 while as J&K’s “Gross State Domestic Product” (GSDP) growth

rate has shown an improvement from 5.78% to 6.78%. Thanks to deteriorating national

GDP numbers we have somehow managed to catch up with the national aggregates.

Another important point to understand here is the “base” on which the growth

multiplication factor is applied which in case of National GDP is huge compared to small

sized GSDP of J&K. Therefore even a small percentage growth on a bigger base means

proportionally bigger incremental growth to National aggregates in absolute terms

compared to a small GSDP base of J&K. In addition to GSDP one of the concerning

indicators of our state economy is the fiscal deficit. We are among the states with highest

fiscal deficit in the country which measures to 4.62% for FY 2012 ranking 3rd in the

worst list of deficits after Manipur and Pondicherry and irony is that we rank 2nd in the

list of highest grant receiving state from central govt. which amounts to 7.55 billion USD.

This makes J&K the most indebted state with a debt-GSDP ratio of around 60%. Debt-to-

GSDP ratio is an indicator of health of an economy. A lower debt-to-GSDP ratio means

an economy is producing enough to pay back its debts. A higher debt-to-GSDP ratio is a

highly unfavourable situation. Now a cherry on the cake; RBI in its latest publication

dated 10th Jan 2013 reduced the target Debt-GSDP ratio for J&K state to 49.3 % (2014-

15) which boils down to reducing the numerator or in other words it means paying back a

substantial amount of money to the central govt. Another socio-economic indicator of

Jammu Kashmir is the per capita income which in case of J&K is Rs 24,214.00 which is



4

quite low as compared to the national average of 33,283.00 and we rank 21st in terms of

per capita income among all the Indian states.

State Finances

Fiscal deficit for 2013-14 has been calculated at 5.2%. The state has continued to

maintain revenue surplus, though its quantum decreased in 2013-14 by Rs. 1030 crore

from the surplus of Rs 1100 crore in 2012-13.

The state’s own revenue has increased by 7.54 % from Rs 5833 crore in 2012-13 to Rs.

6273 crore in 2013-14.

The central devolutions including States share in Central Taxes and Duties taken together

constituted on an average 73.10 per cent of the total revenue receipts of the state during

the period 2002-2013 and 66.30 % in 2013-14. These resources transferred by the Central

Government financed on an average 65.2 per cent of the total expenditure during the

period 2002-13, indicating a marginal decline of 6.80 % in the State’s dependence on

transfer of central resources.

Sectoral composition of J&K’s GSDP: The three components of J&K’s GSDP are

Agriculture & Allied sector, Industry & Manufacturing and Services. The respective

contribution of these sectors during 2011-12 was 19.35 %, 26.41 % and 54.24 %. During

the last few years of planning between 2004-05 and 2011-12, the share of agriculture in

GDP has fallen by approximately one third from 28.00% to 19.35%, whereas the share of

industry has decreased from 28.23% to 26.41% and the share of services has improved

from 43.71% to 54.24%. It is observed that services sector is emerging as an important

growth driver and the manufacturing sector is relatively stagnant while agricultural

productivity has decreased significantly. It is a point of concern that the combined

contribution from primary and secondary sectors is becoming less than the lone

contribution from service sector which is a very unhealthy condition for sustaining

growth in the long run.

Employment Scenario in J&K: Unemployment is a social issue of serious concern at

the present, both at National as well as State levels. As per Census 2011, the number of

workers also registered an increase of 15.15% during the same period. According to 2011



5

census, the sex wise position of total workers, main workers and marginal workers for

J&K vis-a-vis All India is given in the table below:

Table 1.2: Employment Status of Jammu and Kashmir via-via India

Total Workers Main Workers Marginal

Workers

J&K

Persons 4322713 2644149

(61.77%)

1678564

(38.83%)

Males 3195090

(73.91%)

2305788

(87.20%)

889302

(52.98%)

Females 1127623

(26.09%) 338361 (12.80%) 789262 (47.02)

All

India

Persons 481743311 362446420 119296891

Males 331865930 273149359 58716571

Females 149877381 89297061 60580320

Work participation rate for J&K was estimated at 34.5% as against the All India figures

of 39.8% as per census 2011. According to 2011 census, the number of total workers in

J&K stood at 43.23 lakhs of which the main workers constitute 26.44 lakhs (61.77%) and

the number of marginal workers constitutes 16.79 lakhs (38.83%). Female workers

constituted 26.09% of the total work force. The share of female in the Main workers is

only 12.80% as against 47.02% in marginal workers category in J&K. Further

classification of workers as per Census during 2011, shows that 28.8% of the total

workers are cultivators, 12.7% are agricultural labourers and the remaining 58.5% are

workers engaged in other activities including household industries.

Poverty Status of J&K State: With this slow growth, the state could do very little to

reduce the poverty rate during this period. As per the Tendulkar Committee’s poverty

estimates, poverty reduction in the seven-year period since 2004-05 has been merely

three percentage points, from 13% in 2004-05 to 10% in 2011-12, compared with an

average decline of 15 percentage points at the national level.

Though the extent of poverty (10%) in the state is not high relative to other states, a

telescopic view shows chunks of poor population across the state. The eastern part of the



6

state accounts for a large part of its poor population. The three districts, Jammu, Kupwara

and Anantnag together account for one-third of the total poor in the state. Since the

northern and western parts of Jammu and Kashmir are largely uninhabitable, big pockets

of poor population may not be seen in those areas. Yet, a large segment of the population

residing around the barren areas classified as forest in Ladakh and also the surrounding

areas of snow-covered land tend to be extremely poor.

As per the survey results, the total BPL Estimated Population Ratio of J&K State has

been arrived 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.

Out of every five persons, one falls Below Poverty Line.

Forests

Jammu and Kashmir has a total forest cover of 20230 Sq km (20.23 lakh hectares)

accounting for 19.95% of the total Geographical area of 101387 Sq km on this side of

line of control. All India figures indicate a percentage of 24.47% geographical area under

forests. Out of the total forest area of 20230 Sq km, the area under reserved forests is

2551 Sq km, protected forest is 17463 Sq km and the rest 36 Sq km is unclassified. Out

of the total forest area, 12066 Sq km are in Jammu Region, followed by Kashmir Region

with 8128 Sq km and Ladakh Region with only 36 Sq km. Kashmir Region has 40.17%,

Jammu Region has 59.64%, while Ladakh Region has 0.17% area under forest cover.

Forests cover 48 percent of the total geographical area of the State (excluding Ladakh

region) which is above the national average of 24.47 percent.



7

References

1. Anjum, Darakhsan. (2011). Rural Entrepreneurship in Jammu and Kashmir:

Opportunities and Challenges. International Journal of Research in Commerce,

Economics & Management, Vol. 1(4), P-106

2. Rashid Abdul. (2012) Know Your State Jammu and Kashmir. Arihant

Publications India Limited, P-1.

3. Ayazi, A.R. (1968). Inter relationship between Agriculture and other sector and

their implication in terms of planning. Near East Commission on Agricultural

Planning.

4. Bamzai, P.N.K. (2008). History of Kashmir, Gulshan Publishers Srinagar.

5. Beg, M.A. (1951). On the Way of Golden Harvests; Agricultural Reforms in

Kashmir, Jammu and Kashmir Government.

6. Economic Review of Jammu and Kashmir, (2006-07). Directorate of Economics

and Statistics, Planning and Development Department. Govt. of J & K.

7. Digest of statistics; Directorate of Economics and Statistics; Govt. of J&K,

various issues.

8. Economic Survey; Directorate of Economics and Statistics; Govt. of J&K, various

issues.

9. Economic Review of J&K; Directorate of Economics and Statistics; Govt. of

J&K, 2007-08.

10. www.ecostatjk.nic.in/ecosurvey/EcoSurvey201415vol1.pdf

11. www.indiaenvironmentportal.org.in/.../J&K%20EconomicSurvey%202013-

2014.pdf

12. www.greaterkashmir.com/news/gk-magazine/economic-structure-of.../

X



8

Chapter 2

AGRICULTURAL

STATUS OF J&K

Introduction

Indian economy is predominantly an agrarian economy and its prospect depends upon the

progress of agriculture1. It is considered backbone of Indian economy and around 50%

work force still dependent on agriculture for livelihood despite of structural change

taking place over the years. For ensuring inclusive growth, agriculture needs to be given

priority for any reform agenda in order to make adequate dent to poverty reduction and

providing food security to the people. Since livelihood and food security of

preponderating number of low income and other disadvantage sections of society is

directly involved.

Agriculture sector plays a strategic role in the process of economic development of a

country. During the period of planning economic development in general, and the mid

sixties in particular, thanks to the onset of the green revolution in Indian agricultural, the

rural economy in India has experienced remarkable changes2. It has already made a

significant contribution to the economic prosperity of advance country and its role in the

economic development of under developed country is of vital for future development. In

other words, where per capita real income is low emphasis is being laid on agriculture

and primary industries. It is also an important factor containing inflation, raising

agricultural wages and for employment generation. Realizing the importance of

agricultural production for economic development, the central government has played an

active role in all aspect of agriculture development. In India, population pressure is

increasing while area under cultivation is static (as shown in the land utilization statistics

given below) or even shrinking, which demand intensification of cropping and allied



9

activities in two dimensions i.e., time and space dimension. India is endowed with

tropical climate with abundant solar energy throughout the year, which favors growing

crops round the year.

There is a vast scope to increase irrigation potential by river projects and minor irrigation

projects. In additional to the above, India is blessed with more laborer availability. Since

agriculture is the primary sector, other sectors are dependent on agriculture In India,

major allocation has been done in each five-year plan to agriculture. In 8th five-year plan,

nearly 23% of the national budget allocation goes to agriculture and allied agro-based

cottage industries use on small scales. More than 60%oftheIndianpopulation (60

millions/1.05 billion) depends or involved in agriculture and allied activities. Nearly 40%

of the net national product is from agricultural sector. Approximately 35% employment is

generated from agriculture, out of which 75% is found in rural areas either directly or

indirectly.

Agricultural and allied sectors accounted for about 52.1% of the total workforce in 2009–

103. While agriculture has faced stagnation in growth, services have seen a steady

growth. Of the total workforce, 7% is in the organised sector, two-thirds of which are in

the public sector4. The NSSO survey estimated that in 2004–05, 8.3% of the population

was unemployed, an increase of 2.2% over 1993 levels, with unemployment uniformly

higher in urban areas and among women5,6

. Growth of labour stagnated at around 2% for

the decade between 1994 and 2005, about the same as that for the preceding decade7.

Avenues for employment generation have been identified in the IT and travel and tourism

sectors, which have been experiencing high annual growth rates of above 9%8.

In India, food grain production increased almost four folds from about 50 million tons at

independence to more than 220 million tones in 2005 through green revolution. Despite

variation in the performance of individual crops and regions, total food grain production

maintained a growth of 2.7% per annum, which kept ahead of population growth at about

2.2% per annum9. Through blue revolution, fish production rose from 0.75 million tones

to nearly 5.0 million tons during the last five decades. Through yellow revolution, oil

seed production increased 5 times (from 5 million tons to 25 million tons) since

independence. Similarly, the egg production increased from 2 billion at independence to



10

28 billion, sugarcane production from 57 million tons to 276 million tones, cotton

production from 3 million bales to 14 million bales which shows our sign of progress.

India is the largest producer of fruits in the world. India is the second largest producer of

milk and vegetables. In future, agriculture development in India would be guided not

only by the compulsion of improving food and nutritional security, but also by the

concerns for environmental protection, sustainability and profitability10

. By following the

General Agreement on Trade and Tariff (GATT) and the liberalization process,

globalization of markets would call for competitiveness and efficiency of agricultural

production. Agriculture will face challenging situations on the ecological, global climate,

economic equity, energy and employment fronts in the years to come.

Though the share of agriculture in national income has come down, since the inception of

planning era in the economy but still it has a substantial share of agriculture in GDP

(Gross Domestic Product). The contributory share of agriculture of GDP was 55.4% in

1950-51, 52%, in 1960-61 and is at present 2009-10 reduce to 14.6% only and

continuously decreased to14.2% in 2010-11 as shown in table 1.

Table 1: contribution of Agriculture in Indian GDP

S. No. Year GDP Contribution by

Agriculture

1 2006-07 17.4

2 2007-08 16.8

3 2008-09 15.7

4 2009-10 14.6

5 2010-11 14.2

Source: Annual Report 2010-11, Dept. of Agriculture, Govt. of India

Agriculture has got a prime role in Indian economy11

. It is an important source of raw

material and demands for many industrial products. An average Indian still spends about

half of his/her expenditure on food items since agriculture forms the resource base for

sizeable number of agro based industries and agro services, it is appropriate to consider it

not only from farming angle, but from holistic value chain, It has been realised that for

achieving 9% growth of the economy, the agriculture must grow at least by 4%.Presently

Agriculture sector is contributing 14.2% to the Gross Domestic Product (GDP) at

National level, but it is still the main source of livelihood for majority of rural population.



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