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Industrial Development & Economic Growth in Jammu & Kashmir

March, 2018

Jammu and Kashmir (J&K) is the northernmost state of India and a global tourist destination. In addition to traditional recreational tourism, a vast scope exists for adventure, pilgrimage, spiritual, and health tourism.

The economy is primarily services based and agri-oriented. Between 2011-12 and 2016-17, the Gross State Domestic Product (GSDP) of J&K increased at a compound annual growth rate (CAGR) of 14.19 per cent to US$ 23.6 billion. The Net State Domestic Product (NSDP) increased at a CAGR of 9.59 per cent to reach US$ 16.5 billion in 2016-17.

A vast natural resource base has enabled J&K to develop land for cultivating major fruits. With varied agro-climatic conditions, the scope for horticulture is significantly high in the state. Food processing and agro-based industries (excluding conventional grinding and extraction units) thrive in the state. J&K has an ideal climate for floriculture and an enormous assortment of flora and fauna. The state has Asia’s largest tulip garden.

J&K’s handicrafts are world famous and the traditional handicraft industry has emerged as a large industry. Due to its large employment base and exports potential, the industry has been receiving priority attention of the government. The state is also famous for its small-scale and cottage industries such as carpet weaving, silks, shawls, basketry, pottery, copper and silverware, papier-mâché and walnut wood.

The following are some of the major initiatives taken by the government to promote Jammu & Kashmir as an investment destination:

  • J&K’s handicrafts are world famous, on the back of which, handicraft industry of the state witnessed huge growth. Handicraft exports from the state increased 8.6 per cent to US$ 177.81 million in 2016-17.
  • J&K has an industrial policy that offers attractive incentives along with a single-window clearance mechanism. Land is allotted at concessional rates in industrial areas on lease for 90 years.
  • In order to boost infrastructure, the government is planning to build two highways in order to provide all-weather connectivity from Jammu to the Kashmir valley. The first project of four-laning of Ramban-Banihal section of National Highway-1A (now NH-44) in Jammu & Kashmir will cost US$ 271 million.Another project is related to four-laning of Udhampur- Ramban section of National Highway. The 40.07-km road project will cost US$ 293 million. Also, the Border Roads Organization (BRO) is going to take up the upgradation of Jammu-Poonch highway into a four-lane expressway.
  • The Department of Industrial Policy & Promotion (DIPP) has extended a Special Incentive Package. This includes 100 per cent premium reimbursement under Central Comprehensive Insurance Subsidy Scheme to all units on expansion over the next five years. The DIPP also allowed capital investment subsidy of 15 per cent on investment in plant and machinery; the subsidy is applicable for five years from the date of commencement of production
  • Under the ‘Apple Insurance Scheme’, the state government has decided to construct a chain of compressed air stores in each district of the state in order to introduce modern pre- and post-harvest technologies.
  • The state has established the Jammu & Kashmir Handicrafts Sales & Export Promotion Corporation and Jammu and Kashmir State Handloom Development Corporation to promote development and growth of the handicraft sector.

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