What Government Reports Tell About Business In Kashmir

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Among the other landlocked regions like Rajasthan, Telangana, Haryana, Chhattisgarh, Uttar Pradesh, Madhya Pradesh, Jharkhand, Punjab, Assam, and Bihar, J&K has scored the least (12.27) in export preparedness.

EVEN after the removal of Article 370 which was considered a “hurdle” in the development of Jammu & Kashmir, the Naya Kashmir still lags in Ease of Doing Business (EODB) and Export Preparedness Index (EPI).

Ease of Doing Business

J&K ranks 21st in the EODB rankings released by the Department of Industry and Internal Trade (DPIIT). The ranking is based on the implementation of Business Reform Action Plan (BRAP).

The DPIIT started a reform exercise in 2014 to rank all states and union territories in India based on some reform parameters with the aim to create a business-friendly environment.

The first report titled “Assessment of State Implementation of Business Reforms” was released in September 2015 covering the findings of reforms implemented by States/ UTs under the Business Reform Action Plan (BRAP).

Similar reports of the ranking came out in 2006 and 2017-18.

The reforms cover 12 broad areas like labour regulation, land administration, environment regulation, obtaining electric and water supply, etc.

For the rankings of 2019-20, the assessment is based only on the feedback from service users and industries. The respondent data is shared by the states through the BRAP portal.

The users are then surveyed by the DPIIT to determine the efficacy of the reforms.

Under BRAP 2019-20, feedback is only sought on those reforms, which has been implemented by the states and UT.

In 2017-18, Kashmir was put under the category of “aspirers” who have implemented less than 80 percent of reforms. The combine scoreboard of reform evidence and feedback of J&K was 32.76 percent.

For BRAP 2019-20, out of 187 reforms proposed by New Delhi, 137 were implemented in the region.

Neighboring states of J&K- Himachal Pradesh (HP) and Punjab have implemented 175 and 178 reforms respectively. HP ranks 7th and Punjab ranks 19th in EODB.

However, the methodology used in the 2017-18 ranking is different from that of 2019.

The 2017-18 edition used state government and user feedback to compute the score, whereas in 2019 only business feedback (for whom the reforms were intended) was taken onto account.

After the abrogation of Article 370, business stood standstill for a long time in Kashmir. Covid, in 2020, further dented it.

Tourism, handicrafts, and other retail businesses have incurred huge losses during the period, which according to the estimates of the Kashmir Chamber of Commerce and Industries (KCCI), is Rs 40,000 crores.

Export Preparedness Index 2020

J&K ranks at the bottom (36th) in the first EPI report prepared by the premier policy ‘Think Tank’ of the Government of India, NITI Aayog.

The EPI is done to assess the readiness of the states in terms of their export potential. The readiness is measured based on four pillars (policy, business ecosystem, export ecosystem, and export performance), 11 sub-pillars and 55 indicators.

Gujarat at 75.19 emerged as the leading state followed by Maharashtra (75.14) and Tamil Nadu (64.93).

The scores of J&K in the four pillars are- policy pillar: 0, business ecosystem pillar: 14.92, export ecosystem: 5.63 and export performance pillar: 25.87.

Under the business ecosystem pillar, the sub-pillars like business environment, infrastructure, transport connectivity, and access to finance scored 7.82, 0, 48.29 and 3,56 respectively.

Some important indicators like labour reforms, number of investor summits, single-window clearance scored zero.

In the case of the export ecosystem, sub-pillars like export infrastructure, trade support and R&D infrastructure scored 9.83, 0, and 2.86 respectively.

Growth and Orientation and export diversifications sub-pillar under export performance scored 6.96 and 44.78 respectively.

According to the report, “There is a high scoring range amongst Indian states on the EPI where Gujarat has the highest score of 75.14 and Jammu & Kashmir with the lowest score of 12.27.”

Since the report considers the data from 2016-17 up to 2018-19, J&K is being considered as a state and is grouped under the landlocked category.

Among the other landlocked states like Rajasthan, Telangana, Haryana, Chhattisgarh, Uttar Pradesh, Madhya Pradesh, Jharkhand, Punjab, Assam, and Bihar, J&K has scored the least (12.27) in export preparedness.

The report mentions that J&K needs to improve its performance under the policy and the export ecosystem pillars, considering that it “indicates a glaring paucity in both enabling and facilitating factors that could drive the states towards export-oriented growth.”

As per the report, Kashmiri shawls have the highest Market Performance Index in J&K. It is exported to 44 countries and accounts for 17.8 percent of the share in the erstwhile state’s total export.

Other items having high Market Performance Index are carpets, medicine put up for retail sale, shelled walnuts, basmati rice, yarn of polyester and derivatives of pyridine.

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Swati Joshi

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