T h e

K a s h m i r

T  e  l  e  g  r  a  p  h

Third Edition

A Kashmir Bachao Andolan Publication

July 2002


Spotlight    Romeet Watt

Top of Page        B Raman

Special Report Hamid Bashani

Fundamentals Subash Kapila

Economy            B N Kaul

InsideTrack          R Upadhyay

Himalayan Blunder              Romeet Watt

In Black & White B Raman

Statecraft             Romeet Watt

Bottomline           R Upadhyay


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 E C O N O M Y


J & K: 55 years & Development

A sad story of wasteful expenditures, unproductive schemes and wrong priorities

B N Kaul


One cardinal principal adopted by Prof. Malanbois in his draft second FIVE YEAR PLAN was that priority should be given to those schemes which increase the self propulsive force of economy. Hence he gave priority to Power generation, Irrigation, Coal, Steel and Cement production etc.

Unfortunately in J&K development planning has been always adhoc and dependent on the political bosses of the day. It is a direct result of this faulty planning that Jammu and Kashmir has 3 lakh youths unemployed and the government is saddled with an overstaffed strength of another 3 lakh employees.


Before the deficiencies of planning in Jammu and Kashmir are discussed it will be relevant to summerise the achievements of last 55 years.

Following figures published by J&K Government ( Hindustan Times, 15th August, 2001) are indicative ;

Department             1950                2000

Teachers                 441                  83630

Edu. Inst.                1322                15858

Enrolment               1.08 lakhs         11.2 lakh

Milk Products           0.16 Lakh         11.2 Lakh 

Tube Wells              23                    890

Road lengths           3091 Kms         15225 Kms 

Power Capacity         4.0 MW            1577 MW* 

* includes Central projects


The  entire Plan expenditure of J&K State is met by Centre. Following table gives expenditure under 5 Year Plans and one year Plans from 1950 to 1990.

        PLAN                      EXPENDITURE

        Ist Plan                    11.52 Crs

        2nd Plan                  25.94 Crs

        3rd Plan                   61..85 Crs

        Interium Plan            59.95 Crs           

        4th Plan                   162.85 Crs

        5th Plan                   278.54 Crs

        1978-79                   101.64 Crs

        79-80                      119.72 Crs

        6th Plan                   918.40 Crs

        7th Plan                   1400 Crs

The above forms only a percentage of the total expenditure. the figures after 7th Plan (85 was starting year of 7th Plan) are not available to the writer. The total grant-in-aid in 1988-89 was 1003 Crores and for 2002-2003 Outlay is 2200 Crores. However the figures of 1, 20, 000 crores was given in (Hindu dated 30th May 2001) as the total amount paid by Central Government to Jammu and Kashmir government for development in last 55 years up to 2002.


Irrigation and Flood Control

Between 1950 and 1985 about 300 Crores were spent on Irrigation. But the  achievements do not seem to be  commensurate with expenditure. The irrigated area in Kashmir Valley was 2.2 Lakh Hectres and it did not increase much up to 1985. Gigantic lift irrigation project like MARAVEL LIFT IRRIGATION, LETHPORA LIFT IRRIGATION were constructed to irrigate areas substantial part of which was already irrigated by ZAMEENDARI KULS. Phrases like modernizing, modeling, remodeling were manufactured to justify expenditure on the same canal or Kul over and over again.

Scores of low dams were constructed but did not give intended benefits because of bad planning. Many Bonds for reclamation of land (particularly around Wular-Lake) proved failures.

In Jammu Division the irrigated area in 1950 was 1.57 Lakh Hectares which increased to about 1.8 Lakh Hectares. Some irrigation projects like DUDHAR CANAL, UDHAMPUR CANAL. RAVI-TAWI PROJECT, Lift Irrigation Projects at Jammu, Rajal Nowshehra did give benefits. But no evaluation study was done to check if the benefits matched with expenditure. Most of the money spent in DODA District, upper areas of RAJOURI District on irrigation got wasted. All canals like KISHTIWAR Canal, SHIVA Canal, MANDAKWAS Canal, MALWANA  Kul, NILE Kul were disastrous failuers. In Doda and Rajouri Districts there was hardly any increase in irrigated area of 5000 and 4580 Hectares respectively even after 35 years of expenditure.

Industries and Mining:

From 1950 to 1985 213 Crores spent on Industrial development and yet there was no perceptible increase in production. the value of production of medium INDUSTRIES was 347 Lakh in 1970 and 1471 Lakh in 1985 which does not indicate any increase in quantity if allowance is made for inflation (index in 70 was 38 and in ‘85 it was 120.)

Lignite Bricqueting plant was established and Lignite mining started at Handwara but was abandoned as it did not prove economically viable. A huge organisation “J&K Minerals” was established and under it a Thermal project at Kalakot was constructed for 20 MW. After construction it was found that there was no coal and the entire money got wasted. Industrial

Estates were constructed in all important cities in the State but there being no power available soon these buildings housed BSF and other Central police forces. It was not realised that for Industrial development Power was essential for which nothing was done from 1953 to 1966.

Despite being saddled with half a dozen Directors the Silk production in the State fell from 38295 Kg to 23704 Kg between 1974 to 1985.

Match Factory at Baramulla was purchased from its owner but it soon became defunct. Brick Factory, Lime Factory and Joinery Mills were established and proved only partially successful. Ply Board Factory at Pampore and Creamics Factory at Kathua proved failures.

Huge number of Small Scale Industries were established but generally they cornored Import Quota (salable in Black Market) and Subsidies available.

The state of Industries in Jammu and Kashmir were described by CAG Report (Times of India dated 9-11-2001) which quoted the instance one Deputy Director reporting (on physical verification) that half of the Registered Units were untraceable.

Dr. Mustafa Kamal told the State Assembly recently that out of 365, 10 small Scale Units only 16219  were untraceable and 5146 Units were Sick (Excelsior dated 16-3-2002). The CAG Report cited above stated that J&K Government invested Rs. 3500 Crores in State Undertakings which fetched only 2 percent returns.


In 1950 Kashmir Valley had only MOHRA (4 MW) and Jammu had 2 MW Powerhouse. Ganderbal Project (9MW) started by Sheikh Mohammed Abdullah in1948 was completed in 1957. From 1953 to 1966 not a single Power Project was started. Thanks to efforts one brilliant Engineer (Mr. Mir GulamRasul) Sadiq Sahib stared Upper Sindh Hydel Project (22 MW) Lower Jehlum Hydel Project (100 MW), Chenani Project (22 MW) which were  completed by1978. (These projects were started in 1966). From 1966 upto 1984 not a single new project was started despite timely warning by Mr. R. S. Gill Commissioner PDD J&K 1972-79) that J&K Government should immediately start URI Project (480 MW). This Project was later on started by Central Govt and completed recently. J&K Government gets only 12 percent free power out of this project.

The tragedy with Hydel Power Projects is that in winter (when Kashmir Valley needs most power) due to non-availability of water power generation reduces by 66 percent (i.e. only1/3rd capacity becomes operational). Thus in winter Kashmir Valley has tremendous  power shortage) and hence no industry can be viable in Valley.  R S Gill again had warned the Govt that 440 KV Transmission line to carry power from Jammu should be erected  immediately. This also was not agreed to by Syndicate (a group of officers who formed a Think Tank for all regimes after death of Mr. G M Sadiq)  dominated J and K  Govt.

The result was that in winter Kashmir Valley even now continues  to suffer become of tremendous shortage of power.  I will not discuss here the huge Transmission losses (Power thefts) and huge Power arrears. In Frontline dated 24-12 1999, it was stated in an article that 500 Crores were cumulative arrears of Power Charges and Rs.600 crores are lost in Transmission in a single year.


It has been feature of planning in J&K that unproductive (schemes received greater funds in the name of welfare of people. Thus from 1950to1985 out of 3700 Crore plan outlay as much as 1900 Crores were spent on Buildings Roads, Construction of Tourists Bungalows, Tourist  huts, Office buildings, School Buildings and Public health.

From 1978 to 1990 again  substantial part of funds were spent on Sheri Kashmir (Medical) Institute, Convention Complex ,attached to Centaur Hotel, Dal Development,  office Buildings, hospital Buildings Nallah Mar Road, scores of tourist huts, money was spent also on fancy schemes like international Golf course at Gulmarg and srinagar, chair car rope way at Gulmarg. Fruit Mandi, National High Way bye pass in addition  to making    drinking water schemes for villager Wool Grading factories etc were established but soon become defunct become of lacking of power in winter.  In Dal Lake two roods and desetting  basis (of very doubtful utility were constructed much against advice of British consultants. There may be two opinion on the Urgent necessity or otherwise of the scheme, but one fact is clear that  there schemes were not production oriented.


Educational Policy

Bakshi Sahib on talking over as CM in 1953 announced free education upto Post Graduate level. Although on first appearance this looked  laudable but in actual practice it so happened that children of elite class (because better schooling)  reached  graduate classes and received their Engineering, Medical and Scientific education at the cost of Public exchequer, while their bothers in Govt School  in villages became school dropouts.

An analysis of social background of  Engineers, Doctors Scientistsproduced  by J&K University will show that they belonged to well-to-dosections of Kashmir society whose parents could well have afforded togive such education on their own. This policy had two results

(i). In course of time higher eduaction (Engineering, Medical andUniversity) ate away most of the education budget leaving very littlefor the School education in rural areas. The village Schools continuedto be without rooms, blackboards  producing school dropouts in plenty.

(ii).  The second consequance was  a large  number of Engineers and Doctors produced when it was not possible to accomodate them in Government Service. Even  now  there is  a backlog of 5000 Engineersand  Doctors awaiting posting.       

On the other end it produced a huge number of educated peoplematriculates and non-matriculates who were cut off from the professionsof their forefathers, considered it infradignitum to do manual work andlooked for a clerk or a daily wagers Job. No wonder that Governmentafter Governmentt had to expand estalishment and increase army of dailywagers to cater for this vocal section of society. At present the salarybill of Jammu and Kashmir  Government is reported to be Rs. 3000 Croresas cost of establisment alone .

An instance of reckless expansion pf government apparatus is given the way Corporation after Corparation (like Small Scale industries Developement Corparation, Tourist Development Corparation, FinanceCorporation ......... were setup). Mr Jagmohan in his “FrozenTurbulance” has cited how 11 such Undertakings ran a loss of 71 Croresin a single year alone.


How most of industries setup by government failed has been discussedearlier. How muchgovernment money was wasted in failed industries issomething which will be known after deeper study. The money advanced toprivate individuals (again belonging to elite class having clout amongpower that be) also has gone waste. The money advanced by StateFinancial Corporation (SFC) increased from Rs. 4.01 Crores in 1960 to Rs14.87 Crores in 1985. Bank advances increased from Rs. 1.23 Crores toRs. 260 Crores in 1984.


Between the year 1961 and 1983 the bank deposits rose from 10.98 Crores to 548.90 crores which shows an annual growth of 19.5 percent against2.4 percent rise in GDP.


From the above the Conclusions are:

a.In entire 55 years emphasis was not on such schemes which would increase production and self propulsive force of economy but unproductive (many times anfractuous), welfare oriented schemes without a long term perspective.

b.Inspite of the fact that Central government aid per capita for J&K was high (2291 against 192 for Bihar, 233 for Tamil Nadu and 331 for Karnataka). The real progress in J&K was very low. An idea of non development expenditure per capita is given in article by Mr Jagmohan (Hindustan Times dated 25.5.1995) and is quoted below:

J&K = 699

Bihar = 64

Rajasthan = 64

Utter Pradesh = 20,

Tamil Nadu = 73.

c.To a large extent it is these wrong policies  which created a fertile ground for militancy in the State. Inspite of 3 Lakh employees in its over staffed establishment it has a backlog of three Lakh semi-educated youth. 

The author has Retired as Chief Engineer of J&K State.

By arrangement with Kashur Gazette, New Delhi. 

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