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Why more equitable and Sustainable Growth is vital for J&K

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By: M.Yaseen Lone/M. Maqbool Lone

The potential of J&K economy to be vibrant and among major fast growing economies of India is evenly possible. The rate of growth of Gross State Domestic Product is equally comparable with that of Gujrat, Maharashtra, Punjab and Haryana. The economic growth of the state of Jammu and Kashmir has been erratic in the past few years. The Gross State Domestic growth rate has fluctuated between -3.2 per cent to 17.7 per cent in a matter of just two years, according to RBI data. This fluctuating trend can neither be source of any worry for the economic thinkers of J&K nor can be they permanently assigned to the economic cycle of J&K.  J&K is still showcasing the green signals in terms of different economic reforms which were undertaken from past two years to unleash a new era of economic development.

While this positive trajectory is commendable but we should not be satisfied with this. J&K is still performing poor in number of economic dimensions which ought to grow faster because catch-up growth is easier. Also, the benefits of growth in J&K have been distributed extremely unequally, with top incomes rising much faster than the rest. We have seen new environmental challenges in the form of sharp increase in pollution levels and carbon dioxide emissions that, if unchecked, threaten to stall or reverse progress.

The J&K is not creating enough jobs to absorb its growing young energetic population. The Economic survey of J&K mentions that unemployment rate is even higher than average national unemployment rate with 24.6% population in the age group of (18-29) unemployed which is far above than national unemployment rate of 13.2%. This joblessness is major obstacle in the smooth path of economic growth of J&K. J&K has to ensure the diversified economic growth, so that benefits of the same should trickle down across all spectrum of population.

For enhancing the benefits of economic growth and making it more accessible and sustainable, this process involves multiple efforts on the part of government. The first and foremost includes creating semi-skilled jobs for those currently unemployed and underemployed and those who are seeking to leave low productivity agriculture. The effective implementation and application of MGNREGA can improve the employability status of workforce of J&K to a large extent.

Another step involves the participation of women in labor force of economy. J&K has one of the lowest women labour participation rate. This limits the talent pool of economy and thereby reducing the choices of women to work in different sectors of economy.

There are tremendous possibilities of reform that will take us towards faster and more equitable growth. The government needs to prioritise the spendings better, focussing on filling investment gaps and protecting the vulnerable. A key factor in spurring the growth will be reform that alleviate supply side constraints on growth and job creation. We have to enable both the industrial and service sector to operate at large scale. For growth to be equitable effective and well targeted engagement is essential.

One partial solution is more decentralisation, with more powers and funding delegated to the lower rung governmental organisations like Municipalities and Panchayats. The recent elections to panchayats and municipalities in J&K was big ambitious step towards achieving this goal of taking the democracy at grass root levels on one hand and percolating down the benefits of growth on the other hand.

The judicious use of technology in J&K has the potential to help, as long as we are careful not to make a fetish of technology. It can make easier to monitor flows of funds and use of funding locally, allowing for more devolution of funding. Effective use of technology can help substitute for governmental manpower, increase the points of access to governmental services, help monitor service provision and reduce leakages in the system. In this regard, JK BEAMS is an important platform introduced by the government to monitor, allocate, estimate, the budget and other expenditures during the financial year.

For the growth to be sustainable and equitable, we have to reform our education, skilling, healthcare and welfare systems significantly. Our record on primary education is dismal. Parents have responded by increasingly migrating their children to private schooling, but private schools are only slightly better than governmental schools, and in their current form will not solve the problem of low quality of education. This poor quality of education will breed up the poor quality of human capital which is already constraining the growth and limits its inclusiveness.

Health care is another major area of concern. In particular the public health care system had largely abandoned by those patients who are seeking regular primary care. They prefer paying for private treatment. The recent Ayushman Bharat insurance scheme needs to get revitalised so more of our poor population can get benefits from it.

A failure to ensure high-quality education and health care provision means that a substantial proportion of our future labour force will grow up underequipped with the skills needed in the labor market and suffering for long term stunting and wasting. Without stronger sustainable and inclusive growth in J&K, we simply don’t have resources to expand our welfare schemes significantly, which will result in mounting economic challenges.

– Yaseen Lone is Joint Director Statistical Training Institute Kashmir; M. Maqbool Lone is Assistant Director Statistical Training Institute Kashmir.

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