INDIAN STATE : JAMMU AND KASHMIR

General Information

Jammu and Kashmir is the northern most state of republic of India, lying mostly in Himalayan Mountains. Jammu and Kashmir shares a border with Himachal Pradesh to the south, Pakistan to the west and People's Republic of China to the north and east. Jammu and Kashmir consists of three divisions: Jammu, Kashmir valley and Ladakh. Srinagar is its summer capital, and Jammu its winter capital. The Kashmir Valley is famous for its beautiful mountainous landscape. Jammu is known as "City of Temples" attracts tens of thousands of Hindu and Muslim piligrims every year. Ladakh, also known as "Little Tibet", is renowned for its remote mountain beauty and Buddhist culture which was established as early as the 2nd century.

Fact File

Geographical Area	2.22 (lakh sq. km)
Capital	Srinagar (Summer) Jammu (Winter)
Population (2001 Census) In lakhs	101.44
Gross state Domestic product (GSDP) at current prices in 2004-2005 (as of Feb 2006)*	US$ 4.49297 bn
Gross state Domestic product (GSDP) at constant price (1993-94) in 2004-2005 (as of Feb 2006)	US$ 2.28899 bn
Net State Domestic Product at Current Prices (2004-05)	US$ 3.88901 bn
Net State Domestic Product at Constant Prices (1993-1994) for (2004-05)	US$ 1.93916
Per Capita Income at current prices (2004-2005)	US$ 349.630
Percentage of State Population to All India Population	0.99
Share of primary sector of the total GSDP in 2004-2005	30%
Share of secondary sector of the total GSDP in 2004-2005	17.5
Share of tertiary sector of the total GSDP in 2004-2005	53%
Total Investments (as on Jan 2006)	US$ 6.18613 bn
Literacy Rate (2001 Census)	55.52%
Male Female	66.60% 43.00%
Principal languages	Urdu, Dogri, Kashmiri, Pahari, Punjabi,English, Ladakhi, Balti, Gojri and Dadri

*Source: CSO Estimates

Advantage Jammu and Kashmir

• Stable Industrial Policy
  
• Attractive Incentive and Subsidy Package
  
• Rich resources of Water, Agro, Forests, Herbal and Minerals
  
• Tremendous potential for investment in tourism sector.
  
• Good Infrastructure and Support System
  
• The people of the state possess inherent skills of weaving and designing of textile products, which could be the basis for setting up of state-of-the art textile industry in the state.

Economic Infrastructure

Roads

The total road length maintained by PWD in the state has reached to 15,012 km. As many as 84 road projects are under execution. Jammu and Kashmir is very well connected with the rest of the country through National Highway up to Leh through Kargil (Ladakh).

Rail

The state is well -connected with the country's railway network. The rail connectivity has been already extended up to Udhampur District. Work on connectivity to Srinagar and Baramullah is going on. Udhampur -Katra and Quazigund- Baramullah Rail link project has been taken up as national project which is likely to be completed by 2007.

Airways

Srinagar, Jammu and Leh are major airports connecting Jammu and Kashmir with the rest of the country. The Srinagar airport has been upgraded to international level.

Power

The installed capacity of power utilities in Jammu and Kashmir as on 31st January 2007 stood at

Sector	Hydro	Thermal				RES	Nuclear	Grand Total
		Coal	Gas	Diesel	Total
State	429.15	0.00	175.00	8.94	183.94	10.59	0.00	623.68
Private	0.00	0.00	0.00	0.00	0.00	0.52	0.00	0.52
Central	607.76	198.59	127.09	0.00	325.68	0.00	68.00	1001.44
Sub-Total	1036.91	198.59	302.09	8.94	509.62	11.11	68.00	1625.64

Initiatives in Power sector

• The state government is trying to take a share in the following projects
  
  
  • Thermal- ONGC projects; 300 MW Jindal Power Project, Chattisgarh
    
    
  • Large Reservoir Based Hydro - 750MW West Seti Hydro Project, Nepal
    
    
• Unlike most of the Hydropower generators currently available to Jammu and Kashmir, the West Seti Hydro Electric Project has a large storage reservoir with a capacity of one month's water requirement. This reservoir enables the project to provide a peaking facility of about 8 hours a day, including during the low flow winter months. Hence this project is well suited to Jammu and Kashmir load profile.
  
  
• The Jammu and Kashmir government has requested Prime Minister Manmohan Singh to look into the feasibility of transferring some central power projects in Jammu and Kashmir to the state government particularly.1,000 MW Pakal Dul Hydro Power project in Kishtwar of Doda district to the state government.
  
  
• The Prime Minister is said to have assured handing over the Pakal Dul project to Jammu and Kashmir. This project is estimated to be constructed at Rs.5,089 crore and it will have four units of 250 MW each.
  
  
• Agencies in the state have identified nearly 30 small and medium power projects, ranging from 2 MW to 200 MW, to be taken up for construction.

Telecommunications

Modern telecommunication facilities of ISD, STD, Telex, Fadx are widely available across the state. All districts in the state are connected through computer network. The state also has access to internet facilities provided by the Department of Telecommunications

Social Infrastructure

Health

Medical infrastructure of the state constitutes of 4 Medical Colleges, 100 Hospitals, 343 Primary Health Centers and 3326 Medical Sub Centers. Total bed strength of more than 10,000 in the State

Education

State's literacy rate is 55.52 per cent as per 2001 census. Male literacy is estimated at 66.60 per cent and female at 43.00 per cent.

Major Industries

Minerals

Minerals commercially exploitable in the state include coal, gypsum, bauxite, lignite, graphic, magnetic and lime stone with estimated deposits as coal - 33 million, bauxite - 8 million, gypsum - 1 million, graphite - 16 million, limestone around 200 million. A number of mineral based projects have been identified for private investment.

Gems and Jewellery

In view of a rich tradition of handicrafts, gems and jewellery industry is particularly suited for J&K. There is also availability of the required skill. Development of gem and jewellery industry also provides effective utilisation of time in the idle hours of winter.

Handicrafts

Handicraft is the traditional industry of the state and has been of crucial importance given its large employment potential and the demand of handicrafts both within and outside the country. Some of the items of production include paper-mache, woodcarving, carpets, shawl making, embroidery etc. The handicrafts industry; especially the carpet industry, has been a source of substantial foreign exchange. A pashmina dehairing project assisted by the United Nations Development Programme (UNDP) will come up in the Leh industrial estate of the state.

Floriculture

J&K state has suitable agro-climatic conditions for a variety of flowers. The floriculture industry in the state offers a good source of supply to the domestic and international market. There is potential for this activity to be propagated on a commercial basis.

Horticulture

Nature has endowed Kashmir with innumerable gifts, its towering snow clad mountains, bubbling streams, transparent and sparkling lakes, flower meadows, colourful orchards and rare fauna have always attracted numerous tourists from all corners of the world. The age-old traditional fruit cultivation has profusely coloured the serenity and tranquility of Kashmir's landscape. Kashmir, the land of fauna, flora and fruits possesses a rich history of fruit cultivation. Years before the time of warrior King 'Lalita Ditya' and though the golden periods of benevolent kings like 'Awantiwaraman' and Sultan Zain-ul-Abdin 'Badshah', Kashmir has remained the symbol of fruits and flowers.

The horticulture industry in Kashmir has become the bulwark of rural economy in the state. This industry earns revenue of over Rs. 50 crores yearly and provides job facilities to the thousands of people directly and indirectly.

Sericulture

Sericulture is one of the oldest industries in the state. The state houses two large silk factories - in Srinagar and Jammu. The Srinagar factory manufactures about 300,000 meters of various types of silk fabrics, georgette, parachute and suiting.

The government woollen mill at Srinagar is another established manufacturing unit, which has a capacity of 2,018 woollen, and 1,576 worsted spindles. The state lays major thrust on production of quality cocoons at remunerative prices to the farmers.

Electronic Industry

With India emerging as one of the world leaders in information technology, J&K state has made strong headways in this sector by declaring it as thrust area and has emulated other progressive steps for the growth of this sector. The highly conductive climate, existing electronic complexes provide a base to start new ventures. The state government has established an Electronic Industrial Estate/Complex at Rangreth (Srinagar) and is in the process of setting up a Software Technology Park where necessary facilities for connectivity and fast transmission of data are being created to attract leading national and international software companies.

Tourism

Jammu and Kashmir is a bejeweled crown of India. Occupying the northern region of the country, the state abounds in scenic beauty. Jammu and Kashmir, which is divided into three regions, viz. Jammu, Kashmir and Ladakh provides varieties of cultural, religious spots, adventure and sight seeing activities. Tourism has emerged as an important and one of the major contributors to the state's economy. There are various places of tourist attraction in the state which are being visited by both foreign and domestic tourists.

There lies vast potential to exploit the tourism sector in the state. Government of Jammu and Kashmir has declared tourism as an industry and a number of concessions and incentives have been extended. A few initiatives towards its tourism industry are

• Ministry of Tourism at the Centre promoting Jammu & Kashmir through its Incredible India campaign.
  
  
• Ministry of Tourism to support houseboat owners and develop village tourism in Jammu & Kashmir.

Investment opportunities

• Food Processing
  
• Agro based industries
  
• Floriculture
  
• Information Technology
  
• Electronics and precision engineering
  
• Handloom and handicrafts
  
• Sericulture and silk industry
  
• Textiles and readymade garments
  
• Live stock based industry
  
• Leather and leather goods
  
• Sports goods industry
  
• Processing of gems and Precious Stones
  
• Selective mining projects and mineral based industry
  
• Green House (Ladakh)

Investment Incentives

• Land Allotment: Allotment of land at concessional rates in industrial areas on lease basis for 90 years
  
  
• 30% capital investment subsidy on fixed capital investment, subject to maximum of US$ 0.0650550 million (Rs 30 lakhs)
  
  
• Brand Promotion: The policy has introduced an incentive for assisting industries of the state to acquire and promote their own brands. This incentive will be extended for the first three years, 50% of expenses subject to a limit of US$ 43,360.73 in the first year, 30% of expenses subject to a limit of US$ 32,544.38 in the second year and 10% of the expenses subject to a limit of US$ 21,708.40 in the third year.
  
  
• Interest subsidy: In addition to the 3% interest subsidy available to new industrial units under the Government of India package, 3% subsidy shall be payable on the working capital facilities available from the commercial banks to all existing units for the remaining period of their eligibility, subject to the conditions prescribed, under the Government Order No. 202- Ind of 1998 dated: 27-5-1998 and to the units not getting interest subsidy under the Central package.
  
  
• Pollution Control Equipment: For individual units, installing their own pollution control devices, subsidy will be provided on such equipment to the extent of 30% subject to a limit of US$ 43,360.73
  
  
• D.G.Set subsidy: 100% subsidy on purchase/installation of D.G Sets from 10 KWs to 1000 KWs capacity with a maximum limit of US$ 54,201.03
  
  
• Project Report: 100% subsidy for preparation of feasibility report subject to maximum of US$4,339.06
  
  
• Toll tax: Exemption on toll tax to be continued up to 31-03-2015, subject to the negative lists. No toll tax on empty containers brought into the state for stuffing of industrial products for export out of the state.
  
  
• General Sales Tax (GST Exemption): GST exemption to be continued till VAT is imposed or till 31-03-2015 for existing and new units, whichever is earlier, subject to the negative lists. The exemption of GST on the raw material procured by the local industrial units shall be available only to SSI units, subject to negative list.
  
  
• Central State Tax Exemption: CST exemption to SSI units to be continued up to 31-03-2015. Extended to Medium & Large Industrial units, subject to a negative list.
  
  
• Airfreight subsidy: Air freight subsidy shall be continued up to 31-03- 2015 at the rate of 50% subject to the ceiling of US$10852.54 per year per unit. Also made applicable to incoming raw material.
  
  
• Research and Development: 50% subsidy on the expenditure incurred on R&D subject to a ceiling of US$ 10852.54.
  
  
• Human Resource Development: 50% of the cost of training to be borne by government subject to a ceiling of US$ 108.378 (Rs. 5000) per trainee and US$ 2170.02 per annum for one unit.
  
  
• Exemption of Court Fee: Registered Industrial units shall be exempted for payment of court fee for registration of documents relating to lease of lands.
  
  
• Transport Subsidy: transport subsidy at the rate of ninety percent available as per the scheme of government of India.
  
  
• Thirty percent subsidy on pollution control equipment: It is proposed that 30% subsidy be extended for purchase of pollution control equipment subject to a ceiling of US$ 43,360.73 per unit.

Important Industrial Areas

• Industrial Complex, Bari Brahmana, Jammu
  
• Industrial Estate, Gangyal, Jammu
  
• Industrial growth center, Samba, Jammu
  
• Integrated Infrastructure Development Project, Udhampur
  
• Export promotion Industrial Park, Kartholi, Jammu
  
• Industrial Area, Kathua
  
• Electronic Complex, Rangreth, Srinagar
  
• Industrial Complex, Lassipora, Pulwama, Kashmir.
  
• Industrial complex, Khonmoh, Srinagar
  
• Industrial Estate, Zainakote, Srinagar
  
• Industrial Estate, zakura, Srinagar
  
• Industrial Growth Centre, Ompora, Budgam

Institutional Framework For Industrial Promotion

Jammu & Kashmir State Industrial Development Corporation (JKSIDCO)

JKSIDCO acts as a catalyst to promote industrial development in the state, The Corporation has established seven industrial estates to provide infrastructure facilities at identified locations suitable for industrial development throughout the state. Within each estate developed land is available at subsldised rate Industrial growth centres and export promotion Industrial parks are being set up in both Jammu region and Kashmir valley separately, by way of acquiring land, constructing internal roads, affluent disposal facilities, provision for water and power in the industrial estate. SIDCO has also promoted projects In joint and assisted sectors, The Corporation offers a variety of financial assistance for setting up new Units and for expansion / diversification /modernization of existing projects.

Directorate of Industries and Commerce

Directorate of Industries & Commerce is charged with the responsibilities of facilitating industnal growth in the state by providing for funding Infrastructure In the form of industrial estates, incentives for capital Investment and other subsidies.

J&K State Financial Corporation (JKSFC)

JKSFC alms at boosting economic development in the state by providing adequate financial assistance for setting up units In the medium, small and tiny scale industrial sectors JKSFC provides financial assistance for acquiring fixed assets like land, building and machinery, technical know-how fees, pre-operative expenses etc to set up industrial projects in J&K.In case of existing Units, JKSFC offers term finance for their expansion, diversification, or renovation, modernization and procurement of quality control equipment and energy saving devices.

J&K Tourism Development Corporation

J&K Tourism Development Corporation is the commercial arm of the tourism department and manages Hotels. Dak Bungalows, Cafeterias, for facilitating tourism in the State.

Jammu & Kashmir Bank Ltd

J&K Bank ltd is one of the largest private sector banks of the country. It is owned by the Government of Jammu & Kashmir with equity holding exceeding 80%. Bank's network is spread across the Country

Power Development Department

The Power Development Department set up by the state government is a nodal agency to promote development of Power resources in the state and to promote private investment in the Power sector.

J&K Small Industries Development Corporation

J&K Small IndustrIes Development Corporation (SICOP) IS a nodal agency to promote rapid industrialization and development In the SSI sector The Corporation provides procurement and distribution of Imported and indigenous raw material to industries within the State.

It also develops industrial estates at various potential industrial centres In J&K SICOP has developed industrial estates at Gangyal. Birpur and Kathua in Jammu & Zaikakote. Bijbehare & Zakura In Srinagar The Government of India Jointly with state government has entrusted the development of integrated Infrastructure development centre at Udhampur to SICOP.SICOP provides testing facilities to SSI end products. It also provides financial assistance for marketing of industrial products to SSI units set up In the State. SICOP provides marketing support to SSI units of J&K.

J&K Industrial and Technical Consultancy Organisation

J&K Industrial and Technical Consultancy Organization Ltd renders consultancy services to new and existing enterprises in the state. The support of financial Institutions both at the central level as well as in the state enables the organization to undertake wide spectrum of marketing, technical and financial consultancy services.

Forest Department

The state possesses a forest area of 20,182 Sq Kms J&K State Forest Corporation Ltd is engaged in the supply of wood, quality coniferous timber, both in and outside the state It works towards protection of environment, development of commercial plantation and scientific management of forests.

J&K Handicrafts Corporation Ltd

J&K Handicraft Corporation is running a number of carpet weaving training centres It IS engaged in the procurement and sale of handicrafts produced in the state The Corporation also provides a market to the craftsmen by buying their produce directly at reasonable price.

Sericulture Development Department

The state is a natural habitat of Sericulture 27, 000 rearers are engaged in the state with sericulture II is an important rural based household industry having tremendous employment potential. Sericulture Development Department is a nodal agency for incentives pertaining to silk industry.

Mineral Development Department

J&K Mineral Limited (JKML) promotes the Identification and exploitation of mineral resources and the establishment of mineral based industries in the state.

J&K State Handloom Development Corporation

The State handloom department is actively engaged in the implementation of a number of welfare schemes and provision of marketing and working capital support to the handloom sector. The Corporation is also establishing raw material banks for assistance to weavers. The Corporation undertakes exhibitions in different cities of the country to promote the products manufactured by the handloom units for their marketing outside the state. The Corporation operates various schemes for dispersal and extension of handloom industry to ensure balanced regional development of the state.

J&K Horticulture Produce Marketing and Processing Corporation

J&K Horticulture Produce Marketing and Processing Corporation (HPMC) provides marketing cover to the fruit industry in the state It provides facilities for collection, grading, packing processing and marketing and also in the introduction of latest technology and scientific know-how.

J&K State Agro Industries Development Corporation

J&K State Agro Industries Development Corporation is a nodal agency in promoting the area under cultivation for fruits and to strengthen agriculture based industry in the state. It is engaged in marketing of a number of agro based products various manufactured in the state and also provides facilities like serving of farm machinery and transportation of equipment

Policy Framework

Industrial Policy 2004

Objectives

The primary objectives of the Industrial Policy 2004 are:

• To achieve sustainable industrial development in all regions for increasing the rate of growth, value of output, employment, income and overall economic development of the State;
• To strive towards balanced economic and social development in all regions of the State by promoting industrialization particularly of the industrially backwards areas;
• To encourage and sustain the cottage and tiny industrial sector which, with law investment, is able to provide employment to a large number of people in the state.
• To create a supportive environment with transparency and easy access in information, technology and financial resources.
• To revive potentially viable sick industrial units so as to put to optimum use the capital and other resources already employed in such enterprises.
• To promote the growth of thrust and export-oriented industries and encourage high-tech and knowledgeable based industries including information technology.
• To take necessary steps in the field of Human Resources Development to make available skilled / technical manpower as per the needs of industry.

Approach and Strategy

The strategy for achieving the objectives, and the main elements, of the Industrial Policy 2004 are:

1.	Providing improved infrastructure and support services, with emphasis on regular and uninterrupted power supply.
2.	Single window clearance system for power, pollution control, land allotment and registration of industrial unit.
3.	Closer interaction with financial Institution and commercial banks, to ensure regular and adequate flow of finances to the industrial sector.
4.	Rehabilitation of potentially viable sick industrial units.
5.	Improving competitiveness of existing industrial units by facilitating modernisation aimed at enhancing productivity, energy efficiency and better environment management.
6.	Enabling manufacturers of quality consistent products to augment their sales within and outside the state by brand promotion.
7.	Reorienting Industries and Commerce Department.
8.	Export promotional measures to augment export of products of the state outside the country.
9.	Permanent Grievance Redressal System to remove bottlenecks in import and export of products to and fro the state.
10.	Environment protection, to conform to state, national and global regulations.
11.	Entrepreneurship development in the state, to provide opportunities to educated unemployed.
12.	Encouraging Research & Development.
13.	Focusing on thrust areas with natural advantages in the state and facilitating large investments in prestigious projects.

Full Text of the Policy

Information Technology Policy

Objective

The primary objectives of the IT policy of the State are as follows:

E-Governance: To use IT in the process of Government functioning to bring about Simple, Moral, Accountable, Responsive and Transparent (SMART) governance to its citizens.

IT in Industry: To use IT effectively in industries especially where the State has competitive advantages, for making such industries more global and help them to generate additional revenues; to diversify the local industries into being web- enabled and attract IT companies from elsewhere in the country and the world.

IT in Education: Encourage the use of Information Technology in schools, colleges and educational institutions so as to enable students to improve their skills, knowledge and job prospects and enable them to obtain employment in this sunrise industry.

Investments in IT Sector: To encourage and accelerate the investments and
growth in IT hardware, software, Internet, training, IT enabled services, telecom, e-commerce and related sectors in the State.

IT for Social Equity: To utilize the power of Information Technology in the overall goal of improving healthcare; empowering women, rural & tribal communities as well as economically weaker sections of society. The ultimate aim is to enhance social equity and justice.

IT for Employment: To use Information Technology for generating additional employment for the new digital economy.

IT Infrastructure: To provide adequate infrastructure in the state, so that the IT sector can flourish and also to facilitate citizens of the state to use IT for a better quality of life.

Localization: To facilitate localization of software, so that benefits of IT could percolate not only in the English language, but also in the local
languages.

To Promote:

(a) E-Tourism: To use IT for heralding world class E-Tourism in the state.

(b) E-Health: To bring the specialized treatment to the remotest area of the State through telemedicine.

(c) E- commerce: To use IT to boost trade and commerce in areas of traditional strength of the State such as handlooms, handicrafts and horticulture.

Full text of the Policy

Useful Web links

Government of Jammu and Kashmir

J&K SIDCO