In September-October 2019, the Government of Jammu and Kashmir (J&K) is gearing up to host its inaugural investment summit. Primarily aimed at encouraging investment and challenging pre-existing notions about the state, the event is expected to draw participation from at least eight countries and throughout India. Investment potential is particularly strong in the sectors of tourism, horticulture, and handicrafts, while attention is also being given to the power sector and manufacturing. With government jobs ranking third in terms of employment due to scarcity in other areas, this summit is considered a significant opportunity for economic growth.
Summit Overview
The first-ever investment summit in J&K will serve as a platform for the government to showcase the various strengths and opportunities that exist within the state. It is hoped that the event will boost economic development and create new avenues for job creation, reducing reliance on public sector employment, currently the third largest employment source in the state.
Target Sectors
The summit is intended to channelize investment into strong sectors such as tourism, horticulture, and handicrafts where J&K has distinct competitive advantages. Simultaneously, the spotlight will also be trained on the power sector and manufacturing industries which are believed to possess untapped potential.
Investors’ Concerns
However, companies are often wary of investing or conducting business activities in the region due to its perceived image as a conflict-ridden state. Furthermore, the legal framework around property ownership presents a significant hurdle. Current legislation prevents non-permanent residents of J&K from purchasing land or immovable property in the state.
Despite the challenges, the Land Grants Bill, implemented by the government under late Shaikh Abdullah in 1978, provides a potential workaround. This bill permits the government to lease out land to non-residents for 99 years. Building upon this provision, the state government can allocate lands as industrial and offer long-term leases.
However, proposals to lease non-industrial lands have been met with strong opposition from various segments of the civil society. Another stumbling block is that leasing land impacts the capacity of a firm to secure loans since leased land cannot be used as collateral for mortgages.
| Sector | Investment Potential |
|---|---|
| Tourism | High |
| Horticulture | High |
| Handicrafts | High |
| Power sector | Medium |
| Manufacturing | Medium |
Future Prospects
The forthcoming investment summit in September-October 2019 represents a concerted effort by the J&K government towards stimulating economic growth and employment, against a backdrop of traditional apprehensions and legal impediments. As it hosts participants from across the globe, it aims to alter the perception of the state, opening doors to fresh investment inflows and business opportunities. The success of the event could signify a turning point in the state’s development trajectory.