PM gets J038;K reform blueprint from panel

The SIZ should have high-class infrastructure, captive power generation, single-window clearance and liberalized labour laws.

The report, that comes close on the heels of Pakistan8217;s proposals on Kashmir, is also significant as it comes in the run-up to the third round of the Centre-Hurriyat talks. The task force was set up in March.

Srinagar8217;s crumbling infrastructure came in for scrutiny with a recommendation to develop a Rs 200-crore satellite city for business, commerce, finance and communication. At the same time, the panel called for a blueprint to attract tourists by developing Srinagar8217;s own infrastructure and upgrade living conditions.

An important recommendation is that of transferring the 390-MW Dulhasti power project in Doda, plagued by time and cost over-runs, from the National Hydel Power Corporation to the state government. This, the report says, will increase power supply at an accessible tariff. This is a better option than transferring the 690 MW Salal hydel project, the task force feels. The report also calls for a policy to develop the state8217;s hydel power potential and expedite work on the 600 MW Sawalkot project.

Sustainable tourism, airport modernisation, speeding up renovation and construction of new house boats, hotels and shikaras are among the slew of measures the task force has suggested for the tourism sector by investing Rs 4,000 crore over the next five to seven years. This will re-establish tourism and the 8220;engine of J-K8217;s growth8221;.

The panel has also sought 8220;image enhancement8221; through a Rs 200-crore plan to create infrastructure like shopping malls, food courts, multiplexes and sports facilities along the Srinagar-Muzaffarabad road . It also urges the state government to give more incentives to low-cost airlines and reduce sales tax on aviation turbine fuel. On telecom, the state has been asked to withdraw, or at least reduce, the entry tax on capital equipment.

For financial reconstruction, the task force has suggested creation of an Asset Reconstruction Company to take over the state8217;s non-performing assets and refurbish the balance sheets of the financial institutions; building basic facilities and administrative infrastructure to making panchayats active again and using literacy volunteers to implement the adult literacy programme.

The task force has emphasised that the panchayats need to be revived and used for commercial activities, information dissemination and for formation of self-help groups and micro-finance initiatives under a Rs 27-crore plan. 8220;Much of the institutional and physical infrastructure has crumbled or been destroyed,8221; the task force has said.

The problem areas

8226; J038;K is excessively dependent on the Centre, with its own revenue covering only 25 of its expenditure, the aggregate for all other states being 50.

8226; The ratio of total expenditure to gross state domestic product is 51.4, more than double the all-state average of 20.2.

8226; Viability of financial institutions like the J038;K State Financial Corporation severely dented by militancy in the Valley, with most small-scale units, including hotels and houseboats defaulting on loan repayment

8226; Internal market too small to take advantage of ecomony of scale in production.

8226; Private sector not taken off for reasons that include restrictive legislation and security considerations

8226; Beneficial impact of public expenditure lost since much of contractor payments are transferred and purchases made beyond the state