The state of Jammu and Kashmir located on the extreme
of northern India is famous for its scenic beauty and landscape all over the
world. Agriculture is the main sector of the state’s economy, employing major
portion of the total work force of the state (Economic survey 2016). Due to the
limited cultivable land and serve agro-climatic conditions, the development of
agriculture at large scale is led-out in the state. The peculiar physical
conditioning of the state, like, extreme location, difficult mountainous
terrain, transportation bottlenecks and extreme climatic conditions which
cannot be improved upon except transportation to some extent, limits the scope
for industrialization, where state does not enjoy the advantage of natural
resources. Such industries can be taken-up at a very small scale mostly to
cater the local demand. On the positive side, the state is well endowed with
some proven natural resources, like limestone, gypsum, quartzite, coal and
lignite and also rich in forest resources, and in some agricultural and
horticultural produce. However, most o f the natural resources like water,
forest and minerals existing in the state have largely remained unexplored and
untapped (Dr. A. Gani, 1991). Due to temperate climatic conditions, the state
is the only place in the country with highly suitable for rearing imi-voltine
and Bi-voltine silk worm races which are famous for high quality silk. The
definite comparative advantage which the state enjoys in these natural economic
resources provides a sufficient scope for industrialization in the lines based
on these resource endowments. The state is also gifted with scenic beauty,
world famous health resorts, fascinating landscape and historical legacies in
craftsmanship skills, thus enjoying a distinct and important place in tourism
and handicraft industry. The number of incentives supporting services is
available to the industries in the state. A web of banks has appeared across
the geographical area of the state. M moreover, a network of institutions has
been created to promote the development o f industries in the state.  Further, economic environmental competitive
condition in the state is not unfavorable to conclusive industrial environment.
However, the greatest weakness to the favorable industrial environment in the
state has been its undesirable socio-cultural imperatives. Industrial
infrastructural facilities in the state have remained far from satisfactory,
particularly in the valley of Kashmir. Electric power is in short supply,
railway networking is missing, capital is scarce, some technical skills are not
available locally and peace essential for smooth functioning of industries is
missing in the state. The state has remained unfortunate with regard to its
political stability right from 1947. The state still remains the bone of
contention between India and Pakistan and so far three wars have been fought by
these two countries over Kashmir. The political uncertainties are looming over
the state. Further, the entrepreneurship skills which are highly essential for
better utilization of natural bounties are almost scarce in the state. The
youth o f the state in particular, in Kashmir Valley has shown little
preference toward entrepreneurship. It is also that the state is overlooking
the need for entrepreneurial development. The above deficiencies in the
industrial environment can be improved upon without any difficulty which calls
for both political and administrative will. Power supply, technical skill base
and entrepreneurship is expected to improve in the years to come, however,
political uncertainties seems unlikely to settle down to its logical
conclusions in the near future (Economic survey Jammu and Kashmir, 2014-15).

     Jammu and
Kashmir has huge base of human and natural resources however; because of
natural environment and geographical constraints setting up the industries with
huge capital base is very difficult. As per the recent data of department of
industries and commerce Jammu and Kashmir there are 55,742 small scale
industries in state providing employment to 267,194 people. The main small
scale industries in Jammu and Kashmir are food products, metal products, wood
and hosiery. Forests of the state provides huge raw materials to several
industries like popular wood for match sticks, willow for making cricket bats
and walnut trees for wood carving. Industries like cotton, silk, carpet weaving
and wood carving are also doing well in state with huge employment generating
capacity along with income (Economic survey J and K 2014-15). Handicrafts
sector occupy a vital place in the economic composition of the state. State
is   inherited with rich tradition of
handicrafts which have no parallels. In the absence of large scale industries,
the handicrafts sector has an enormous contribution towards employment in the
state and foreign exchange earnings. The importance of handicrafts industry can
be understood from the fact that more than 3 lakh people get employment from
this sector. The handicrafts of state are famous in whole world, embroidered
pashmina, Kani shawls, Raffal shawls are world famous crafts of Jammu and
Kashmir ( Economic survey Jammu and Kashmir 2014-15).

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1.3 Industrial Profile of Jammu and Kashmir

The State Industrial Policy of 2004 was
one of the most comprehensive policies important for the industry sector in the
State. Its strength lay in refining and simplifying the procedures relating to
land allotment, grant of incentives and putting in place a workable exit
mechanism for the sick industries. The Special Central Package-I of Industrial
incentives extended by the Department of Industrial Policy and Promotion
(DIPP), Government of India in 2002 for a period of 10 years, the state
witnessed accelerated development of industry since then.

As on 31st December, 2015, 29,449 Small
Scale units were registered in the State with a total investment of Rs.
3,609.82 crore, providing direct employment to 1,35,892 persons. In addition,
83 Large and Medium Enterprises with an investment of Rs. 4,083.52 crore also
stood established in the State providing direct employment to 18,923 persons.

The NSDP of Jammu and Kashmir shows
that there is decline in share of agriculture. The economy of j & k is
suffering from various infrastructural bottlenecks (Gautam, 2007). Structural
change can take place only if the shift from agriculture to industry is
supported by infrastructure. The share of agriculture fell from 76.17 % to
19.84 % in 50 yrs (1960 to 2011).  There was an increase share industries
from 9.97 to 25 during same period. The increase in share of industry could
have been more if the change would have been supported by infrastructure.
Clearly the above figures show that there is an increase in share of industry
and decline in share of agriculture. But that does not imply the shift has
benefitted the economy as it should have benefitted. Due to various
infrastructure bottlenecks the change was not able to absorb the maximum labor
force. Share of service sector increased from 13.86 to 54 %. It can
deduced from above argument that the economy of Jammu and Kashmir has seen the
same changes as Indian economy has seen. The share of service to be precise it
is tourism here has increased drastically, although it is good for economy but
maximum labor force can be absorbed only if there is increase in share of
industry. The share of industry has not increased at the same pace as increase
of labor force. This is one of reasons that unemployment rate is higher in
Jammu and Kashmir than that of all India level (Gautam, 2007).

The new State Industrial Policy-2016
aims to attract substantial investment in industry for production of goods and
services and employment generation through optimal utilization of the available
resources including human resources. Concurrently the policy also gives
attention to the traditional cottage industries namely handicrafts and
handlooms to ensure economic upliftment of the artisans, weavers and traders in
this sector in which age old traditions and craftsmanship is available in the
State.

The main objectives of the 2016
industrial policy

1.     
Industrial development of all the three
regions of the State with focus on employment generation.

2.     
Encourage utilization of the locally
available raw materials and mineral resources.

3.     
Promote labour intensive cottage
industries in the traditional sectors (Handicrafts and Handlooms) to provide
gainful employment to a large number of skilled and unskilled labours.

4.     
Promote the growth of thrust industries
and encourage Hi-Tech and knowledge based industries including Electronics and
Information Technology.

5.     
Promote Human Resources Development
(HRD) and Technical Education for creation of a pool of skilled/technical
manpower.

6.     
Encourage eco-friendly and
environmentally sustainable industrial growth

7.     
through green industries, adoption of
green technologies, use of pollution

8.     
Control devices and equipment and
simultaneously enforce regulation as per laws and rules.

Hence, it is evident that govt is trying
hard to frame the industrial friendly policies but the question arises on
implementation part, which unfortunately does not reflect on ground. Industrial
infrastructural facilities in the state have remained far from satisfactory,
particularly in the valley of Kashmir. Electric power is in short supply,
railway networking is missing, capital is scarce, some technical skills are not
available locally and peace essential for smooth functioning of industries is
missing in the state. The state has remained unfortunate with regard to its
political stability right from 1947. The state still remains the bone of
contention between India and Pakistan and so far three wars have been fought by
these two countries over Kashmir. The political uncertainties are looming over
the state. Further, the entrepreneurship skills which are highly essential for
better utilization of natural bounties are almost scarce in the state. The youth
of the state in particular, in Kashmir Valley has shown little preference
toward entrepreneurship. It is also that the state is overlooking the need for
entrepreneurial development. The above deficiencies in the industrial
environment can be improved upon without any difficulty which calls for both
political and administrative will. Power supply, technical skill base and
entrepreneurship is expected to improve in the years to come, however,
political uncertainties seems unlikely to settle down to its logical
conclusions in the near future.

 

1.4Unemployment

Unemployment is a social issue of grave
concern. The survey on employment –unemployment carried out by NSSO provides
estimates on various characteristics pertaining to employment and unemployment
at the National as well as State level. The latest NSS Survey- 68thround
conducted during July, 2011 – June, 2012 throughout the country constitutes an
important source of information on unemployment. Unemployment rate as per Usual
Principal Status (UPS) in J has come down from 5.3% to 4.9% during the
period July, 2009 to June, 2012 i.e. (66th& 68thRound
of NSS respectively) which is still higher than the unemployment rate of 2.7%
at all India level.

 

 

1.5
Resource profile of Jammu and Kashmir

The state of Jammu and Kashmir is well
endowed with forest, and water resources. It is however, deficient in coal,
petroleum, natural gas, iron ore, manganese, thorium, uranium, aluminum, mica,
sillimanite, phosphates, dolomite, mercury, silver, etc. Some of the important
minerals found in the state are copper, lead, zinc, bauxite, chromium, gold,
arsenic, kaolinite, bios-pore, ochre, coal, lignite, slate, marble, sapphire,
rubellite, quartz and serpentine.

 

Extraction of minerals is the economic
necessity. The economic structure of Jammu and Kashmir is quite complex hinges
on the industries. These industries draw their raw materials from minerals,
forests and agriculture. The large-scale and heavy industries, economic and
commercial activities are largely dependent on minerals and metals. Since we
cannot sustain our economy and society without industrial development, it is
imperative to utilize the resources judiciously and to manage the mining
industry scientifically. The above claims and arguments regarding the resources
base of Jammu and Kashmir clearly show that resources are abundantly available
in the state. Hence, Government should boost the local industries to exploit
the resources efficiently. The role of government policies regarding the
industrlisation can play most vital role to motivate the small scale industries
by framing the industrial friendly policies.

 

1.6
Review of Literature

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