Can India’s best interests converge with the “profit motive" that animates private investment? In a country that has liberalized its economy to grant private enterprise a significant role in raising incomes and thus the overall quality of people’s lives, the answer is an emphatic “of course". Market competition among businesses, after all, has been at the heart of almost every economic success story. Yet, the same question asked in the specific context of uplifting Jammu and Kashmir (J&K), slated for a split into two Union territories, often evokes a demurral. This is for understandable reasons. The region’s record of strife and associated security worries have long kept it off the map of hot investment destinations. Nonetheless, India Inc. not only needs to pay top-level attention to J&K this Independence Day, but also work out how it can help the erstwhile state emerge from stagnancy and gloom. The effort could begin with the state of affairs in J&K being regarded as a business constraint rather than a barrier.
An invitation to invest in J&K and Ladakh has already been issued by Prime Minister Narendra Modi. In an interview with news agency IANS, he spoke of “lack of any proper economic avenues to increase earnings" as “the greatest casualty" of development having passed the region’s people by. “Our approach is different," he said, “Instead of the vicious cycle of poverty, the people need more economic opportunities." Meanwhile, the J&K administration under governor Satya Pal Malik is reportedly keen on holding an investors’ summit in Srinagar this October under the aegis of the J&K Trade Promotion Organization. The government expects private entities to invest in business process outsourcing units, tourism ventures and agri-based industries. As of now, apart from tourism, J&K derives most of its business revenues from handicraft, other cottage industries and primary-sector produce such as dry fruits, saffron and apples. It does boast of a few cement and yarn units, and a few consumer-product companies like Dabur India, pharma firms such as Cadila Pharmaceuticals and Lupin, and multinationals like Coca-Cola have indeed made local investments in the past. The scale needs to be upped. Earlier this week, Reliance Industries Ltd announced a task force focused on J&K and Ladakh. Dairy major Amul is exploring investment options as well, even as Lemon Tree Hotels proposes to expand its presence in J&K’s hospitality market.
The Confederation of Indian Industry has highlighted renewable energy, infrastructure and connectivity (among others) as fields worthy of business interest. It has also asked for emphasis to be laid on local access to finance, apart from education and skill development. The challenge here is stiff. By the census count taken in 2011, of J&K’s 12.5 million people, a little over a quarter were in the 20-34 age group, though only 13% of them were either graduates or holders of professional certificates or diplomas. Large numbers of youth were illiterate. Education clearly needs a major boost. The good news is J&K’s high teledensity, which at 87.9% isn’t far below the all-India figure of 89.7%. Net-enabled startups may possibly thrive in urban clusters. Prospective investors could avail of a set of tax, freight and recruitment incentives, but that’s not the main reason to invest in the region. If private firms develop training modules, adapt their approach to local complexities, and set up shop with adequate care and sensitivity, they could do the country a good turn.