December 2006 News

Rs.83 bn package suggested to speed Kashmir's development

22 December 2006
Indo-Asian News Service

New Delhi: A Rs.83 billion (nearly $2 billion) development package has been suggested for the revival of Jammu and Kashmir in areas like energy, roads, tourism, horticulture, and creation of a satellite city to decongest Srinagar - as also to improve the 'psyche' of militancy- hit state's people.A task force headed by former Andhra Pradesh governor C. Rangarajan made the recommendations in a report it submitted to Prime Minister Manmohan Singh Friday. Rangarajan is a former Reserve Bank of India (RBI) governor.The task force has 'emphasized that the content and process of development of Kashmir has to take into account the state's historical, institutional and political situation and deliver quickly on growth and poverty reduction.'The key recommendations of the task force, among six groups that were set up after the second Round Table Conference in the state in March, are:* Transfer of 390 MW Dulahsti hydroelectric project to the state government,* A rural roads development programme with an outlay of Rs. 17.50 million,* Refurbish tourism infrastructure and launch market development programme for horticulture with an outlay of Rs.500 million as these sectors could be the engines of growth* Develop a satellite business city with an outlay of Rs.2 billion to decongest Srinagar, * Develop a special investment zone to attract industry and generate employment,* Establish an asset reconstruction company (ARC) to take over non-performing assets and refurbish the balance sheets of financial institutions,* Implement the National Rural Health Mission expeditiously, and * Withdraw or reduce entry tax on telecom to improve penetration The task force also defined six objectives for meeting Kashmir's development challenges.These included reconstruction and maintenance of existing physical assets, investment in power and roads, and investment in social infrastructure.Also, a conducive climate should be created for private investment, there should be balanced regional development, and comprehensive fiscal adjustment, the task force said.Identifying power as the 'most critical infrastructure bottleneck' for attracting private sector investment in the state, the group said the strategy should be to 'manage the existing capacity more efficiently in the short-term and augment the capacity in the medium term'.Urging a policy framework to develop the state's hydropower potential, it said: 'This would need to address issues like direct and indirect subsidies, single window clearance for projects, logistics support to IPPs (independent power producers), and a strong securitization mechanism.As an immediate measure, it recommended the transfer of the Dulhasti power project, due to be commissioned shortly, from National Hydro Power Corporation (NHPC) to the state government.The task force recommended the transfer of the 1,020 MW Bursar storage scheme from NHPC to the state government, tying up long-term capacities in IPP projects, particularly those based on coal and gas, and expediting the development of the 600 MW Sawalkot hydroelectric project.Noting that long years of strife and militancy 'have not only damaged physical assets but have also taken a heavy toll on the psyche of the populace' the task force suggested a few 'quick yielding projects' to 'generate visible results in the short run while at the same time lay the foundation for long term growth'.These projects would cover a variety of sectors ranging from banking and industry to agriculture and handicrafts.On tourism, the task force said though this was picking up, it has yet to reach the pre-militancy levels. 'The tourism sector strategy should be to improve the existing infrastructure in the short-term and expand the tourist infrastructure in the medium term,' the group noted.Among the measures it recommended were modernisation of Srinagar airport and fast track completion of road and rail projects into the Valley, harnessing heritage tourism, providing tented accommodation till regular hotel infrastructure can be created, and attracting entrepreneurs from the rest of the country with incentives like single window clearances and a clear land lease policy. The task force said the government should give incentives to budget airlines by way of lower landing, navigational and parking fees, reduce the state sales tax on ATF and make security checks for air travellers tourist-friendly. Besides, wide publicity should be given to the fact that land can be procured on 90-year lease basis 'since there is still much confusion and lack of public clarity in view of Article 370 (of the state's constitution)'.Efforts should be made to exploit the state's rich cultural heritage and develop modern allurements like shopping, food courts, multiplexes, music festivals and sports events like cricket, golf, football and fishing, the task force said.


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