Kashmir's economy is nothing but a sensitive and organised use of its ecology. After 15 years of living under the shadow of the gun, finally, when hope is making a comeback in the state, Kashmir will have to turn to its immense environmental resources to sustain this resurgence
Peace isn't elusive
Tourism...handicrafts...agriculture...forests... lakes - Jammu & Kashmir's (j&k) basis of survival for ages. They still constitute 98 per cent of the state's economy and sustain 90 per cent of its population. Kashmir's economy is nothing but a sensitive and organised use of its ecology. After 15 years of living under the shadow of the gun, finally, when hope is making a comeback in the state, Kashmir will have to turn to its immense environmental resources to sustain this resurgence.
Beginning September-October 2002, when people voted in the assembly elections defying a boycott call by militant organisations, to new chief minister (cm) Mufti Muhammad Sayeed's almost obsessive agenda of giving a "healing touch" to his people, there are unmistakable symptoms of a rebirth in j&k. "There is a genuine desire for peace in the state now," says Jammu-based veteran journalist Balraj Puri. But forest cover has come down by 20 per cent in the last two decades, and agricultural productivity has decreased by 50 per cent, particularly in the last five years. Lack of access has served to speed up the depletion. There is intense pressure for timber and other resources on a few patches, and these are being stripped bare. Grazing, for instance, has taken a heavy toll. The state has a huge livestock population. Of the 20,18,200 ha under forests, not more than 50 per cent is available for grazing. Assuming 3000,000 cattle graze in the forest areas, the grazing intensity is more than three cattle per ha. For proper grazing, cattle require two ha per head. Thus, the grazing intensity is at least six times the permissible level.
Says A R Wani, a retired principal chief conservator of forest (pccf), "Political instability has facilitated the process of environmental degradation." Tourism, the mainstay of the state's economy, has taken a severe beating. The j&k government estimates that the economic loss from tourism alone is worth Rs 500 crore every year.
The only way ahead, therefore, lies in sustainable management and utilisation of the state's natural resources. According to 'Jammu and Kashmir: Vision 2020' (a seminar jointly organised by the Federation of Indian Chambers of Commerce and Industry and the j&k government), the state's natural resources can generate close to Rs 10,000 crore in a few years given the right policy focus and political will. This is what the cm's healing touch has to act on -- and immediately. Violence has bred economic stagnation, which in turn has nurtured unemployment. The state has 1,60,000 registered unemployed; 50 per cent of its labour force is underemployed. "They are potential agents of both peace and death," says a senior official.
"Employment is a crucial factor in bringing in peace," admits the cm. But at the same time, the government does not have the resources or the ability to absorb such a large segment of the work-force. While the state government -- the biggest employer -- has 50,000 vacancies, according to Muzaffer Hussain Beig, "We can't fill them up due to resource constraints."
What, however, is essential in this proposed use of ecology is people's participation; the state will have to loosen its iron grip and let the people take over. For instance, community-based forestry can ensure sustainable harvesting of the willow tree, which caters to the multi-million rupee cricket bat market. Agriculture, which depends on rain for irrigation, could get a boost if the traditional canals are revived and managed by the community.
It is a course of action that needs the highest degree of political will and structural changes in policy and governance. Without this, the cm's healing touch may not heal. "The doctrine of the healing touch is to bring back normalcy," says J S Jamwal, a former member of the state legislature. In a recent opinion poll by a leading daily, 91 per cent of the people surveyed cited economic development as the best way to bring in peace. Mufti Muhammad Sayeed carries an immense responsibility on his shoulders: that of being the state's chief environmental officer, as well as its cm.
FORESTS: Losing its soul
WATER: Fading glories
status: Most of the major lakes are dying
potential: Just three lakes provide economic sustenance for close to 500 villages
strategy: Revive these water bodies to generate livelihood
Over a mile above sea level, around the Wular Lake, a few of India's once richest villages are fighting a losing battle against poverty. It is a poverty that is induced as much by a callous state government as by degradation of the Wular.
What the Nile is to Egypt, Wular is to j&k. It supplies around 40 per cent of the Valley's fish. About 80,000 people depend on it for survival. The turnover of the lotus stem trade from this lake is worth about Rs 2500,000 a year and involves close to 20,000 people. Abdul Ahmed Dar, a resident of Kema village, collects about 100 kg of lotus stems from the lake every day during September-March. In return, he only gets a measly Rs 3 per kg. The government leases the produce to private contractors, who sell it at Rs 15 per kg. For fishing, locals get a license by paying Rs 220 per year. But the condition of the lake has deteriorated and it is impossible to get any fish.
India's 'largest' freshwater lake -- as the Wular is known as -- has probably already lost its superlative: siltation and expanding human settlements have reduced this 202 sq km-lake to just 74 sq km in three decades. It is also under siege -- probably India's only water body to be under night curfew since 1992. "The curfew has almost halved our access to our only source of livelihood. Whatever is left is also threatened as the lake is shrinking," says Dar, who now works in crop fields four months a year.
If the Wular is dying, j&k's most famous icon -- the Dal Lake -- is already being prepared for its funeral. The Lake and Waterways Development Authority, created to save the lake with a budgetary support of Rs 500 crore, is busy preparing software that will decide when the Dal Lake would die!
Death of the Dal means a life sentence for the 40,000 people who reside in and eke out their livelihoods from it. According to London-based Kashmir Environment Watch Association, the Dal has shrunk in size: compared to 1907 records, the lake has decreased by 50 per cent in volume from 22 to 11 sq km. The lake is also getting polluted with an estimated 30,000-45,000 litres of urine and 30 tonnes of human waste dumped into it every month. Add to it the runoff of chemical fertilisers from the vast drainage basin around it, and you have a lake whose internal life processes are under severe stress. Since 1978, when the state government first initiated a study on the ecology of the lake, 24 reports have been prepared on the Dal at an expense of Rs 267 crore, with nothing to show for all the effort.
Tourism has been a major casualty. Militancy has left around 1,400 shikaras (houseboats) bereft of business. "In the last seven years, I have earned just Rs 1,000 from my shikara ," says shikara owner Noor Muhammed. With the loss of revenue from tourism, more people are depending on vegetable gardening -- on floating gardens. The lake is already clogged with such gardens, which over a period of time develop into residential hamlets. Also, "vegetable gardens are becoming smaller in size and the output has reduced," says Gulam Mohammed Dar, the president of Shikara Association.
The state's other lakes, some 1,400 in number, suffer a similar fate. Besides sustaining huge populations, these lakes are also the sources for the state's web of irrigation canals, which feed about 25 per cent of j&k's crop fields.
Of late, the state has been gearing up for another conflict: rights over water. On March 2, the j&k assembly passed a resolution asking the Central government to review the Indus Water Treaty with Pakistan (see box on previous page: Ire over the Indus). Said the cm, "Though we understand that the treaty cannot be rescinded, but the state must be compensated for its loss." The treaty has hampered, among other things, power generation. For example, absence of a storage reservoir (a stipulation of the treaty) has meant the Lower Jhelum Hydel Project can generate only 35 mw in spite of an installed capacity of 400 mw. The August 1998 Report of the Committee on Economic Reforms in J&K noted that "on the recently commissioned Uri and Salal Hydroelectric Projects, the energy loss is to the order of 44 per cent and 50 per cent respectively".
The result: the state's power purchase bill has assumed gargantuan proportions. Almost the entire tax revenue of the state is consumed in purchasing power, with revenue realisation not exceeding 35 per cent. By March 2003, the state had purchased power worth Rs 1,135 crore against an expected revenue realisation of just Rs 400 crore. The arrears, if realised fully, can finance at least one five-year plan, says a senior official of the finance department.
Part of the problem is poor marshalling of resources. Hardly 10 per cent of the state's hydro potential of over 15,000 mw has been harnessed till date. The Ranbir Canal, built in 1870, was intended to carry 1,000 cusecs per second of water to feed the areas of Miran Sahib, Vijaypur and Madhopur. Poor maintenance has ensured that it can now carry just 300 cu ft per second. The Ravi Uplift Canal, meant to service southern Jammu, has gone dry -- because Punjab is unwilling to provide any water and there is no electricity to pump it up. As of March 31, 2001, there were 111 incomplete projects in which official investment worth Rs 296 crore was tied up.
The financial results of six irrigation projects with a capital outlay of Rs 88.66 crore at the end of March 2001 showed that revenue realised during 2000-01 (Rs 12.44 lakh) from these projects was only 0.14 per cent of their capital outlay and was not sufficient even to cover the direct working expenses (Rs 1.04 crore). After meeting the working expenses (direct and indirect) of Rs 1.28 crore and interest on capital outlay (Rs 9.05 lakh), these schemes suffered a loss of Rs 1.25 crore.
In March, the state government decided to opt for a power policy with focus on micro projects. "The policy will make arrangements for each and every potent area to have its own power project according to its requirement," says Mufti Mohammad Sayeed. To expedite action on this, the government has opened its power sector for investment from non-government bodies.
The treaty's implications are not limited to power; farmers in the state are also pushing the government to take a rigid stand against it. j&k is facing severe water scarcity as a result of a six-year dry spell. The spread of agriculture has created a demand for water that j&k's canals simply cannot meet in years of poor rainfall. In 1998, rainfall in the state was deficit by just 1 per cent; in 2001, the deficit shot up to 42 per cent. In the last six years, the annual yield in rice has come down from 152 lakh quintals to 109 lakh quintals. Finance minister Beig points out that this may deteriorate the economy further, as the state would be diverting its already low purchasing power to buy rice from external sources.
The problem has been compounded by reducing forest cover, leading to top-soil erosion: every year, about 5 per cent of agricultural land is losing fertility. Diseases and pests have also been the bane of almost 70 per cent of cultivated fields. The state's changing climate has nurtured the blast disease in paddy fields, and apple scars and fungal infection in apple orchards. According to the state agriculture department, about 40 per cent less apples would be harvested in the coming five years if the diseases were not taken care of.
The cultivation of saffron, one of the mainstays of the sector, has been badly hit. Farmers in the state have traditionally returned to their saffron fields with the onset of sont , or spring. But the season has vanished, climatologically as well as metaphorically. "This season is no more, and snow and rain are erratic," says Imtiaz Ahmed, a 25-year-old saffron farmer in Pampore, India's largest producer of saffron. Some 226 villages comprising about 700,000 people are solely dependent on saffron for livelihood, according to the j&k Saffron Growers Association. In Pampore, the saffron fields are parched and farmers are gradually abandoning this cash crop. Kashmiri saffron, the state's most profitable cash crop, is losing its market to low grade saffron from Iran, which is cheaper.
Militancy dried up the flow of buyers for saffron. Middlemen stepped in to fill the vacuum, but with the rise in violence, they vanished as well. Then came the drought, and the yield dipped to just a few quintals a year. In the early 1990s, the yield was 2.8 to 3 kg per ha; this year, it was a mere 500 gm per ha. More agony -- in the form of the corn rot disease -- was in store for saffron cultivators; it has afflicted almost all fields in Pampore and is spreading.
Imtiaz, however, has not lost hope. His father had decided not to take up saffron cultivation this year, but he insisted on it. "I know that a bit of facilitation would revive the lucrative business," he says. But for Saukat Ahmed Bhatt, a 50-year-old saffron farmer who would soon be working as a daily wage labourer, everything is lost. Saukat used to cultivate 10 kanals (half a hectare) for saffron. Usually 1 kanal fetches about 1 kg of unprocessed saffron worth Rs 40,000. Last year, Saukat could manage to sell only 200 gm.
The j&k Saffron Growers Association has demanded seed banks where farmers can buy seeds at subsidised rates or on credit. Usually, out of 10 kanal lands, farmers keep two-three kanals for preservation of seeds. Many desperate farmers have used this reserve up to earn a few hundred rupees more.
Horticulture, another cash-earning sector, is similarly afflicted. Currently, of the state's one million families depending on agriculture, five lakh (25 lakh people) are practising horticulture. The sector contributes about Rs 400 crore to the state's gdp. But low productivity, poor quality and lack of processing facilities have taken their toll: growth is stagnating in almost all orchards. The state does not have a single processing unit, and is also suffering from a scarcity of wood for packaging apples.
In view of these issues, management of water in the state assumes critical importance. In the Kandi area (Jammu), for instance, water management programmes need to utilise the 500 ponds that are in ruins at the moment. Some of these ponds, spread over 10 acres, can meet almost the entire water needs of the region. Apart from feeding them with rainwater, small constructions can help divert runoff from seasonal rivulets into the ponds. Conservation tanks can be constructed along nullahs , from where water can be pumped into these ponds for distribution through pipes for limited irrigation.
The government's two major irrigation programmes -- integrated watershed development programme and the Ravi-Tawi irrigation project -- still have lessons to learn on water management. A case in point is that of the proposed Rs 57 crore Kandi Development Project. The World Bank (wb) has expressed its inability to finance the lift irrigation component of the project, but nabard has offered to bail it out. According to Paryavaran Sanstha, a Jammu-based ngo, providing limited irrigation to 5,000 acres through lift system up to a height of 300 ft would cost Rs 4 crore to install and Rs 6 lakh for annual maintenance. This works out to be Rs 20,000 per ha of irrigation potential creation, which is double the Rs 10,000 per ha irrigation potential cost for pond irrigation. Pond irrigation, thus, has obvious advantages, particularly in the short term. Some government departments -- including the Ravi-Tawi command area department -- are now toying with the idea of pond irrigation.
During an interaction with farmers in January, Mufti Mohammad Sayeed admitted that the state must revert back to traditional means for ensuring water security at the grassroots. The wb-funded integrated watershed development programme would be completing its second phase in 2004. Though beset with rampant corruption, the programme did convince people that a localised watershed development programme can bring respite. Some 28,500 ha of land were brought under the project in Pulwama district. The programme was successful in integrating local economic activities with water management and could be replicated for saffron growers as well.
TOURISM & HANDICRAFTS: Backs to the wall
status: Almost no tourism; crafts trade only Rs 900 crore
potential: Eco- and religious tourism can generate Rs 1,000 crore revenue, while handicrafts can turn in Rs 3,500 crore
strategy: Revive confidence by reviving governance
Some 1,400 empty, rotting houseboats ringing the Dal Lake provide mute testimony to tourism and the craft industry's demise in the state. Each houseboat, sustaining five families on an average, is a story of human tragedy. Sheikh Baseer, a houseboat owner, recently got his first tourist in seven years. But the visitor stayed in his houseboat for just one day. "I had to dust off the houseboat as it had not been in use for years, and the tourist didn't like the dirt," he says. Baseer, who used to earn Rs 10,000-15,000 a month just a decade ago, is about to sell his houseboat as scrap.
According to the Houseboats and Shikara Owners Association, the Valley is currently receiving around 2,500-3,000 tourists per year on an average. About five million visitors still flock to Jammu and Vaishno Devi every year, but very few of them divert to the Valley. The association puts the combined economic loss at about Rs 1,000 crore a year. One unwelcome fall-out of this has been a spurt in child labour: to survive, many houseboat-owning families now send their children to work as carpet weavers.
In the early 1980s, around five million people, with an average stay of three days per head, visited the state annually. Tourism was earning an impressive Rs 12,000 crore for the state every year -- besides employing two lakh people. Beginning 1989, militancy curbed the tourist inflow drastically. By 1991, hardly 10,000 tourists were visiting the Valley per year; during 1991-95, the state received only 2,000 tourists a year. After a brief upsurge just before the Kargil conflict -- the state received 69,000 visitors a year in this period -- tourist inflow slackened once again due to the Indo-Pak stand-off and a spurt in terrorist activities.
"j&k is an exclusively tourist state," says Jamwal. Tourism has always been regarded as a direct market for the state's products, ranging from shahtoosh shawls and handicrafts to saffron. According to the j&k Chambers of Commerce and Industries, an association that has survived the militancy, the state's traditional market has reduced by 45 per cent due to lack of tourists. Mohammad Ashraf, the secretary of Machiekash, a handicraft society, says: "It affects close to half a million people directly."
Gulam Nabi's is a case in point. Nabi, a wood carver in Srinagar, is in a bind. His house is overflowing with unsold wooden furniture and handicrafts, and he has to look for more space to store many more of these. He has already asked 15 of his wood carvers to leave. The three employees he has currently are getting half the salary they used to get five years ago.
Gulam explains: "I have lost 80 per cent of my market and business, but I continue making furniture hoping that peace would come back." His profit has also nosedived thanks to the new economy that has thrived under the shadow of the gun. He pays bribes amounting to 20-30 per cent of his costs to forest and police officials. "Otherwise, I may be branded as a conduit for militants," he says.
Tourists also worked as market multipliers by propagating the state's specialities outside its boundaries -- thus creating more markets. "The state, thus, has lost five million buyers and few more millions of potential buyers," says Basheer Ahmed, head of Kashmir University's economics department and a consultant to the state government on economic affairs. Ironically, what has compensated this loss marginally is the presence of around three lakh security personnel. Offering hard cash for the products they buy, these personnel have saved j&k's economy from complete ruin.
In its days of glory, buyers for Kashmiri handicrafts -- particularly carpets -- came to Srinagar to place advance orders. The trend has reversed; weavers beg for orders from buyers now and get paid in instalments, sometimes ranging over months. Gulam Rasoli Tibu, a carpet loom owner, used to earn Rs 1 lakh a decade ago. "Now, I hardly get Rs 20,000 a year and that too for the carpet I sold last year," he laments.
Machine looms in Amritsar have taken away a considerable chunk of the market. Within a decade, wages of carpet weavers have come down to Rs 500-600 a month from Rs 1,500. Gulam Mahudin, a 54-year-old weaver, says: "My life is tough. I have to take care of my eight children with a wage of Rs 100 a day for close to just 60 days in a year."
The state cooperatives department, supposed to facilitate handicraft cooperatives, has siphoned off millions of rupees. Massive financial and administrative irregularities have been reported in the j&k Department of Industries and Commerce, or dic. Although most department officials attribute the losses to the decade-long militancy, a senior official held massive corruption and administrative failures at various departmental levels responsible. Nearly 61 per cent of 1,244 handicraft cooperative societies in Kashmir division and 78 per cent of 361 societies in Jammu division set up as of March 1997, are either defunct or under liquidation. The department has not maintained consolidated records and institution-wise details of investment in cooperative societies.
In the handloom sector, out of 137 registered societies as on April 1, 1997 in Jammu division, 73 societies with a membership of 1,606 weavers were sick/dormant or non-traceable. Of these, 51 had been paid assistance worth Rs 2.48 million under the programme of modernisation of looms, out of which Rs 1.12 million was recoverable from them at the end of March 1997. Details of loans and other financial assistance paid and recoverable from remaining 22 defunct societies were not available. A large number of these societies had become 'sick' immediately after receiving various incentives.
Clearly, drastic measures are called for to rejuvenate these sectors -- and peace and governance are the imperatives. Visitors to the state will return with the return of peace, and so will the booming markets of yore.
The key: empowerment
As an economy, reviving Kashmir is not a difficult proposition. The new government, instead of exploring the more difficult option of sourcing resources from outside, has to look inwards. It has to bring about a basic change in the state's policy: from that of dependence to self-dependence. While the government -- to its credit -- is making an effort to harness the state's resources (vis--vis the new power policy and forest policy), what is also imperative is a simultaneous revival of governance.
For a population without any sense of governance and economy for 15 years, this might look like an uphill task. Says Srinagar-based economist A H Madhosh, who has studied the psychological impact of militancy: "The greatest challenge is to make the people interested in the government." For that, people have to be involved in the governance process. And to attain that, the government has to address issues that affect them the most - such as the state's ecology-economy.
An institution that needs to be revived and restructured immediately is the panchayat. Balraj Puri believes "devolution of power (to panchayats) is crucial to address problems of environment". The state's geography and climate is such that its major three regions remain cut off from each other for almost five months a year. Which means, effective local governance is critical to keep the economy oiled and running.
In an effort to reach areas cut off due to militancy, the government is considering a plan to devolve power to the panchayats. Currently, the state has its own system of self-government called the halqa panchayat, but it does not have an adequately representative character; neither does it facilitate direct elections to its upper tiers. Inspired by the turnout in the assembly elections, the Union rural development ministry is also aiming to extend the 73rd amendment to the state.
In 1951, the Sheikh Abdullah government's New Kashmir Manifesto had clearly identified the economic-ecological potential of the state. It had also argued for economic devolution and for involving the panchayats in economic activities. The landmark document was, however, abandoned in favour of a policy of ad-hocism. The state needs to avoid this pitfall. The good news is that the public mood is upbeat. Will j&k's chief environmental officer live up to his people and their expectations?
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