| The task force was set up by prime minister Manmohan Singh in March 2005 with an emphasis that special steps for economic development and employment generation in Jammu & Kashmir were crucial in the fight against terrorism
THE prime minister's task force on development of Jammu and Kashmir has proposed a whopping Rs 8,302-crore special development package for the strife-torn state. The slew of measures proposed by the task force, headed by C Rangarajan, which submitted its report to Mr Manmohan Singh on Friday, also include a Rs 200-crore satellite business city in the Valley and a special investment zone to attract industry and generate employment in the state. It also focuses on the power sector, tourism and rural development.
The task force was set up by the prime minister in March 2005 with an emphasis that special steps for economic development and employment generation in J&K were crucial in the fight against terrorism.
The report has recommended the transfer of the 390-MW Dulhasti hydroelectric project, which has suffered heavy time and cost overruns, from public sector National Hydel Power Corporation to the state government.
This will augment power supply in the state quickly amisubstantially and provide low-level tariff, said the 11-member task force. In net present value terms, the transfer of the power project would cost the Centre Rs 4,933 crore by way of compensation to NHPC for return on equity and cost of debt services.
Identifying tourism and horticulture as engines of growth, the task force highlighted the need for refurbishing tourism infrastructure with an investment of Rs 4,000 crore over the next five to seven years to generate 40,000 direct and 1.25 lakh indirect jobs. It said renovation and new construction of houseboats, hotels and shikaras should be accelerated and tented accommodation should be made available. The taskforce recommended quick-yielding projects like the creation of a special industrial zone with world-class infrastructure, captive power generation and distribution and liberalised labour laws.
The report emphasised that the content and process of development of J&K has to take into account the state's historical, institutional and political situation and deliver quickly on growth and poverty reduction. Among other key recommendation are: Rural roads development programme with an outlay of Rs 1,750 crore, launch market development programme for horticulture with an outlay of Rs 50 crore, establish an asset reconstruction company (ARC) which will take over the non-performing assets and refurbish the balance sheets of the financial institutions, implement National Rural Health Mission expeditiously and withdraw/reduce entry tax on telecom to improve penetration.
The task force defined six objectives for meeting the development challenges of J&K: Reconstruction and maintenance of existing physical assets, investment in physical infrastructure —power and roads, investment in social infrastructure, conducive climate for private investment, balanced regional development and comprehensive fiscal adjustment. The task force identified power as the most critical infrastructure bottleneck for attracting private sector investment in the state and suggested that the strategy in the power sector has to be to manage the existing capacity more efficiently in the short-term and augment the capacity in the medium term. This would need to address issues like direct and indirect subsidies, single-window clearance for projects, logistics support to IPPs and a strong securitization mechanism. Reforms in the transmission and distribution sectors like desubsidization of tariff, a time-bound loss reduction programme and setting up performance standards for Power Development Department.