Has J&K ‘Gained’ From ‘Industrialisation’ Post Article 370?

“Article 370’s abrogation has nothing to do with industrialisation in Jammu & Kashmir”: a local entrepreneur in J&K.

Manufacturing process at a factory. Image used for representational purposes.

(Photo: iStock / Altered by The Quint)

In mid January 1990, when guns started roaring outside Khunmoh industrial estate in Jammu and Kashmir's summer capital Srinagar, Ess Emm, one of the largest industrial units in the city, downed its shutters for good.

The non-local owner of the industrial unit, whose name is not known to the locals, packed his bags and left Kashmir. He left behind a sick unit saddled with heavy machinery, a gigantic building, and laid off nearly 1,200 employees.

In August 2019, the Union government abrogated Article 370 which offered special status to Jammu and Kashmir, claiming the move would allow outside entrepreneurs to invest and revive the industrial sector of Jammu and Kashmir.

Industries in Kashmir Valley Down Shutters

A steel sheet manufacturing unit for roofs, Ess Emm, locally known as ‘Tata Factory’, is located in Khunmoh, 13 kilometers from the city centre. According to one of its former employees, Ghulam Hussain of Khrew Shaar: “In 1988, nearly 1,200 employees used to work in this unit, but the political unrest that emerged in the 1990s forced the non-Kashmiri industrialists to wind up, leaving behind a huge building and machinery worth crores of rupees.”

Erected with tall, steel roof sheets, the unit occupies nearly half of the Jammu & Kashmir State Industrial Development Corporation (SIDCO) land in Khunmoh. The abandoned unit is now a sanctuary for wild animals, particularly leopards. The tall grass and dense foliage have turned the unit’s compound into a forest of sorts. Except an old security guard at its entrance, no one else would dare enter the dilapidated building. “If the land occupied by this unit is released, dozens of new units could be created here,” suggested the elderly security guard.

SIDCO has asked the unit holder to either restart the unit or retrieve the land. The matter has now gone to the court and is sub judice. Opposite Ess Emm, another large sick unit is a Hindustan Coca Cola beverages manufacturing plant, locally known as the Coca Cola factory.

The locals of Khunmoh claim that dozens of locals were employed here pre-1990, but since militancy began in the Valley, the non-local unit holder wound up the unit, laying off dozens of employees.

‘Guardians’ Hope For New Lease of Life for Sick Industries

The assessment of the Entrepreneurship Development Institute (EDI) Ahmedabad, reveals that 87.13 percent of the industrial units in Jammu and Kashmir were sick till 2015. The government figures also reveal that till 2014, 368 industrial units in Kashmir were sick. Not just the non-local entrepreneurs, even local entrepreneurs have added their units to the sick list.

According to official figures available at the Directorate of Industries and Commerce in Kashmir, 10,000 kanals of total land was available, out of which only 300 kanals is left.

Following the removal of Article 370 and the ‘demotion’ of Jammu and Kashmir state to a Union Territory, these security guards have newfound hope.

“Earlier, industrialists from outside the Valley were reluctant to invest here. Now industrialists, instead of getting land on lease, will have the privilege of owning property here. This may attract non-local industrialists to either revive the sick units or start fresh ones,” said a former employee.

Long Power Cuts Cause Heavy Losses to Industries

Various economists, including Professor Nisar Ali, considered the power crisis a major problem which may send out bleak image to outsiders investing in the Valley. “The problem, with regard to industrial development in the Valley, is not just a political problem, but it is mainly due to a political-economic crisis,” says Ali.

The SIDCO complex in Lassipora has been facing 4-5 hour long power cuts every day of late, in the middle of a cruel winter. Because of the power crisis, the local units have suffered heavy losses.

The non-Kashmiri industrialists, as per the account of a security guard, had come primarily from Kolkata, Delhi, Haryana, Rajasthan, and some other states of India. “We are in touch with our boss and the good thing is that the company still pay our salaries,” said a security guard of another premier unit namely, Norplex Oak India Limited.

Located inside SIDCO complex, Rangreth Srinagar, 11 kilometres from the city center, Oak was known for making TV motherboards, copper sheets, chip sets and other electronic spare parts.

The employees of Oak claimed that the unit had once absorbed 200-250 employees but right now, only a few security guards are employed.

Inside the shabby buildings of Oak, electronic systems, computers and other machinery have been covered in polythene since 1990.

The security guard, when asked about the unit holder's plan of reviving the industry, responded that due to the current atmosphere of political uncertainty there is no such plan.

‘Abrogation of Art 370 Has Nothing to do With Industrialisation’

Professor Nisar Ali claimed that there is no land available for industrial activity in the Valley. “The reason is simple — most of our land — which has economic potential — is under the clutches of defence and security establishments.” The government, he suggests, must release this vast land and provide it to aspiring entrepreneurs.

“Many years before I was member of Prime Minister’s task force in New Delhi, when a 100 crore rupees corpus was approved by the government for reviving sick industries, that amount never came to Jammu and Kashmir,” said a core member of an industries union in Kashmir, Sheikh Aashiq, who is also the chairman of the Kashmir Chamber of Industries and Commerce (KCIC).

In his first speech after the abrogation of Article 370 Indian Prime Minister Narendra Modi had said that many industries — including import-export, food processing, and health care — would flourish in Jammu and Kashmir with the scrapping of Article 370. The government believes that the change in Jammu & Kashmir’s status will encourage private sector investment in the new Union Territory (UT).

“Article 370 has nothing to do with industrialisation. Many outside entrepreneurs had already started their industries during the 1980s in Kashmir, but because of political instability which emerged during the 1990s, those units shut down and are lying sick,” said an entrepreneur, Riyaz Ahmad, of Chattabal in Srinagar. Locals opine that the abrogation of Article 370 would hardly incline any non-local investor to revive his sick unit or start a new one in the Valley unless the ground situation normalises.

Will Industrialisation Degrade the Natural Environment of Kashmir Valley?

“Entrepreneurs do not necessarily need to own land to establish an industry. They could easily get the land on lease which they used to do before. Industries actually need a politically peaceful environment which unfortunately is missing here. In 1990 the unit holders did not leave Kashmir because of Article 370, but due to political unrest in the Valley,” said a senior economics lecturer, Abdul Waheed, of Pulwama.

“Young, aspiring entrepreneurs knock on the doors of the department of Industries and Commerce, and Jammu and Kashmir Entrepreneurship Development Institute (JKEDI) for starting fresh industries, but due to lack of adequate land, the entrepreneurs come back upset, and therefore look for other opportunities,” said an entrepreneur, Showkat Ahmad, who owns a spun pipes unit in Lassipora Pulwama.

Senior officials of the Jammu and Kashmir government have assured that the new Union Territory would be soon connected with the rest of the country through railway lines, which would further attract non-local investors.

“Like other states of India, Jammu and Kashmir too has challenges, but the real challenge for the entrepreneurs, which the government is facing, includes shortage of land, electricity, and lack of rail connectivity,” said General Manager, SIDCO, Syed Aijaz Aagha.

Some officials, however, believe that industries will harm the environment of the Valley. Former Communication Officer, Jammu and Kashmir Entrepreneurship Development Institute (JKEDI), Pampore, said that Jammu and Kashmir is not feasible for industrial development — particularly for large-scale industries. “Kashmir Valley is known for its natural beauty. We have forests, huge mountains, water bodies and diverse flora and fauna. Therefore, we cannot afford to lose this pristine glory at the cost of industrial pollution,” he said.

(Irfan Amin Malik is a reporting fellow at The Kashmir Walla magazine, and a former staff correspondent at Greater Kashmir. This is an opinion piece and the views expressed are the author’s own. The Quint neither endorses nor is responsible for them.)