Higher growth needs a new vision; our times have changed
When a lot remains desired on the accuracy of the GDP, an automatic distortion in economic growth figures is a natural outcome.
The 2008-09 Economic Survey of J&K, presented in the Assembly, reveals that our income has grown around six per cent during 2008-09.
A six per cent growth in today’s low-growth times is a rarity – a virtue seen with boom countries like China and India. Looking at other indicators of our economy, like our per capita income, it again looks improbably accurate.
In theory, a growth rate of 8 per cent per annum should lead to a doubling of GDP within 9 years. J&K’s governments have been claiming 6-8 per cent growth figures for many years now. So should we foresee a doubling of our GDP in ten years or so?
One indicator which probably seems to convey one message clearly, even though still being imperfect, is our declining per capita income. In all probability, if we minus the distortion in our statistical system, our economic growth rate is not able to keep pace with our population growth. Official estimates put our current per capita income at Rs. 20,604, which is surely lower than our past incomes per person. What is alarming is that we now rank 22nd among all states in the Indian union.
The Economic Survey 2008-09 has portrayed J&K’s decline in contribution to India’s national income to 0.7 per cent from 0.85 per cent in 1999-2000 as another grey area of the PDP-Congress rule. J&K’s contribution to India’s overall income is hardly an indicator of our financial health. There are a multitude of factors that impact this percentage, mainly the relative performance of other states.
J&K’s future economic vision needs to factor in three important issues for its economic growth. There are surely many ways of interpreting this situation, but we need to contextualise things to suit our context.
Firstly, the slow growth of 1.79 per cent in agriculture will mean this activity would increasingly become a subsistence activity. There is evidence to suggest that for a vast segment of our peasantry, agriculture is now an unviable enterprise: the low land holding and low output in comparison to input costs are important factors. This situation would mean a larger number of educated populations from rural areas would mount even greater pressure on already-scarce job market.
Secondly, our current economic growth, whatever that be, puts a tremendous pressure on our natural resources, like forests, land, water, depleting them fast.
It is very much probable that ours is what some critics call this kind of growth "uneconomic growth.’’ The 2007 United Nations GEO-4 report estimates that humanity’s environmental demand is purported to be 21.9 hectares per person while the Earth’s biological capacity is purported to be 15.7 ha/person. In J&K’s case it is surely worse looking at our population stress on our scarce productive land.
Canadian scientist David Suzuki opines that ecologies can only sustain typically about 1.5-3 per cent new growth per year. This may well be logical in J&K’s case given our high reliance on natural resources and low productivity levels from our human capital and technology-based industry.
Thirdly, if we are to avert an even worse unemployment crisis, our economic planning must focus on innovation now. There is a problem with assuming that services sectors, like tourism, could use our human capital in more productive ways. That is true for only low-end jobs.
Our highly educated and skilled manpower would continue to remain in a vacuum. Investment in human capital and a strategy for its higher productivity would automatically enhance our economic output. That, in other words, would mean knowledge-driven entrepreneurship. Not necessarily the production-based entrepreneurship we are used to.
With a stagnated, or even negative, agricultural growth inputs of capital and labour will not be able to achieve a sustainably high growth for us in this fast changing world. Entrepreneurship with innovation holds the key.
Concluded
Saturday, January 23, 2010
Thursday, January 14, 2010
Kishenganga Hydroelectric Project in Kashmir
First published in Daily Greater Kashmir
Saving Gurez and Karewas
After Kishenganga, J&K loses its oil and gas
Arjimand Hussain Talib
J&K state and its people are bracing for two catastrophes. One is shaping up in the form of the Kishenganga Hydroelectric Project in Gurez. The other one is still in the making – the on-going oil and gas exploration in Kashmir’s beautiful Karewa lands.
The use of word ‘catastrophe’ with these two projects is no exaggeration. The social, environmental and economic costs to us are colossal. There is also the spiritual cost – which is totally ignored in the standard cost-benefit analysis. Most importantly, the loss of the Kishenganga Project and our Karewas would mean our coming generations would inherit our centuries of suffering. Optimism for tomorrow dims even further.
A dam in Gurez and a power house on the River Kishenganga has devastating consequences. One, it is fully owned by the Government of India. J&K state will get its usual 12 per cent power share. Two, it will severely impact the natural environment of the Gurez valley, Bandipora and the Wullar Lake. It will severely impact water availability in River Neelam in the other Kashmir. The 24-km long tunnel across the Razdan mountains, bringing water from the Kishenganga to the Wullar Lake through Bunar-Madumati Nullah is going to be an environmental disaster.
One of the biggest losses would be the loss of the centuries-old habitat of the Dard community. The loss to precious flora and fauna would be irreversible.
The catastrophe-in-the-making due to the on-going oil and gas exploration in our Karewa lands deserves attention too. A news report in the Economic Times on 5 January said the government of India had entered into an agreement with a Hungarian exploration company, namely MOL Plc., for oil and gas exploration in J&K, including Kashmir’s Karewas. It is the same company, the report said, which has made two oil and gas discoveries in Pakistan in similar geological conditions.
The news report further said that the ONGC sees J&K’s three basins— Karewa and Spiti-Zanskar in Kashmir, and Himalayan Foothills— with significant oil and gas potential. The corporation has been carrying out geological and geo-physical surveys in the state since 1957 but without much success, it said. The ONGC has now acquired new seismic data for these basins and has also drilled four exploratory wells recently that have shown potential, the news report revealed.
Coming to Kishenganga Project, it is well known that J&K state was all set to execute it in the state sector. For eight years we carried out surveys and explored funding for the project on our own. As we failed to get counter guarantees and ‘defence and political clearances’ from New Delhi, J&K state finally handed over the project to the NHPC. So the project became one of the seven hydroelectric projects – aggregating 2798 MWs - that J&K state handed over to the government of India through a formal Memorandum of Understanding (MoU).
As per the MoU, our state will get 12 per cent ‘free power’ from these projects. In addition, we will also get ‘15 per cent central share of unallocated power at bus-bar rates to meet our need for winter peak requirements.’ That is the power we will buy in hard cash. No charity is involved.
The contract for Kishenganga Hydroelectric Project has been awarded to HCC (Hindustan Construction Company Ltd), in joint venture with Halcrow Group Ltd. U.K. (Halcrow). The contract is on turnkey basis and cost about Rs. 3642 crore. Both these companies were supposed to raise these funds on their own. The HCC-Halcrow Consortium will have a share in the ratio of 98:2 respectively.
The question why J&K state on its own cannot manage such a relatively small funding would always be raised. Many states in India are able to raise loans from both domestic and international markets for much bigger projects. The question is why can’t J&K state do the same? Why we couldn’t have gone for a public issue within the state, to ensure a major chunk of the stake remains within the state itself?
The most disturbing part of the project is its engineering. This project involves construction of a 37m high concrete faced rockfill dam, which will submergence vast tracts of the Gurez Valley. It will swallow habitations, agricultural and grazing lands. The project involves construction of a head race tunnel which will divert water from Kishanganga River to Wullar Lake. Such a massive water diversion will result in serious instability of many mountains in the area. Given India’s poor environmental preservation standards, it is unlikely environmental preservation will remain a high priority.
There is another dimension to this project – the Pakistan factor. That J&K’s rivers are part of India and Pakistan’s geo-political struggle is no secret. It is common sense that Kishenganga is not just any other hydroelectric project. Why both countries have been keen on developing a power house on this river has also something to do with an interesting clause in the Indus Waters Treaty, which says that the country that completes a power project on a river first will win the rights to the river.
Pakistan had started construction on a power house on the same river in its part in 1989, christened as the Neelam-Jhelum Hydroelectric Project (N-JHP). However, it could not make much progress on the project due to financial constraints. In 1994 India conveyed its plan for construction of the Kishanganga Project to Pakistan. Since the place wherefrom India plans to divert Kishenganga’s water through a tunnel to Wullar Lake is upstream, it means most of the areas in Pakistan Administered Kashmir served by Neelam will go dry. Pakistan’s dream of building a power house in its part may never materialise.
When it comes to oil and gas exploration in the Karewas, like the state’s water and hydropower resources it is likely that the ownership of any such resources will go to the government of India. J&K state might, at best, get a 12 per cent share. Massive exploration and drilling activities in our Karewas – our best dry and fresh fruit producing lands – will destroy them ecologically.
The question that needs to be raised vociferously is: why J&K’s governments fail to safeguard J&K people’s interests? Who gives them the mandate to decide on such crucial issues without consulting the people? These questions must take the shape of a peaceful movement. And all of us need to be a part of it. That movement must begin today. Tomorrow will be too late.
Feedback at arjimand@greaterkashmir.com
Saving Gurez and Karewas
After Kishenganga, J&K loses its oil and gas
Arjimand Hussain Talib
J&K state and its people are bracing for two catastrophes. One is shaping up in the form of the Kishenganga Hydroelectric Project in Gurez. The other one is still in the making – the on-going oil and gas exploration in Kashmir’s beautiful Karewa lands.
The use of word ‘catastrophe’ with these two projects is no exaggeration. The social, environmental and economic costs to us are colossal. There is also the spiritual cost – which is totally ignored in the standard cost-benefit analysis. Most importantly, the loss of the Kishenganga Project and our Karewas would mean our coming generations would inherit our centuries of suffering. Optimism for tomorrow dims even further.
A dam in Gurez and a power house on the River Kishenganga has devastating consequences. One, it is fully owned by the Government of India. J&K state will get its usual 12 per cent power share. Two, it will severely impact the natural environment of the Gurez valley, Bandipora and the Wullar Lake. It will severely impact water availability in River Neelam in the other Kashmir. The 24-km long tunnel across the Razdan mountains, bringing water from the Kishenganga to the Wullar Lake through Bunar-Madumati Nullah is going to be an environmental disaster.
One of the biggest losses would be the loss of the centuries-old habitat of the Dard community. The loss to precious flora and fauna would be irreversible.
The catastrophe-in-the-making due to the on-going oil and gas exploration in our Karewa lands deserves attention too. A news report in the Economic Times on 5 January said the government of India had entered into an agreement with a Hungarian exploration company, namely MOL Plc., for oil and gas exploration in J&K, including Kashmir’s Karewas. It is the same company, the report said, which has made two oil and gas discoveries in Pakistan in similar geological conditions.
The news report further said that the ONGC sees J&K’s three basins— Karewa and Spiti-Zanskar in Kashmir, and Himalayan Foothills— with significant oil and gas potential. The corporation has been carrying out geological and geo-physical surveys in the state since 1957 but without much success, it said. The ONGC has now acquired new seismic data for these basins and has also drilled four exploratory wells recently that have shown potential, the news report revealed.
Coming to Kishenganga Project, it is well known that J&K state was all set to execute it in the state sector. For eight years we carried out surveys and explored funding for the project on our own. As we failed to get counter guarantees and ‘defence and political clearances’ from New Delhi, J&K state finally handed over the project to the NHPC. So the project became one of the seven hydroelectric projects – aggregating 2798 MWs - that J&K state handed over to the government of India through a formal Memorandum of Understanding (MoU).
As per the MoU, our state will get 12 per cent ‘free power’ from these projects. In addition, we will also get ‘15 per cent central share of unallocated power at bus-bar rates to meet our need for winter peak requirements.’ That is the power we will buy in hard cash. No charity is involved.
The contract for Kishenganga Hydroelectric Project has been awarded to HCC (Hindustan Construction Company Ltd), in joint venture with Halcrow Group Ltd. U.K. (Halcrow). The contract is on turnkey basis and cost about Rs. 3642 crore. Both these companies were supposed to raise these funds on their own. The HCC-Halcrow Consortium will have a share in the ratio of 98:2 respectively.
The question why J&K state on its own cannot manage such a relatively small funding would always be raised. Many states in India are able to raise loans from both domestic and international markets for much bigger projects. The question is why can’t J&K state do the same? Why we couldn’t have gone for a public issue within the state, to ensure a major chunk of the stake remains within the state itself?
The most disturbing part of the project is its engineering. This project involves construction of a 37m high concrete faced rockfill dam, which will submergence vast tracts of the Gurez Valley. It will swallow habitations, agricultural and grazing lands. The project involves construction of a head race tunnel which will divert water from Kishanganga River to Wullar Lake. Such a massive water diversion will result in serious instability of many mountains in the area. Given India’s poor environmental preservation standards, it is unlikely environmental preservation will remain a high priority.
There is another dimension to this project – the Pakistan factor. That J&K’s rivers are part of India and Pakistan’s geo-political struggle is no secret. It is common sense that Kishenganga is not just any other hydroelectric project. Why both countries have been keen on developing a power house on this river has also something to do with an interesting clause in the Indus Waters Treaty, which says that the country that completes a power project on a river first will win the rights to the river.
Pakistan had started construction on a power house on the same river in its part in 1989, christened as the Neelam-Jhelum Hydroelectric Project (N-JHP). However, it could not make much progress on the project due to financial constraints. In 1994 India conveyed its plan for construction of the Kishanganga Project to Pakistan. Since the place wherefrom India plans to divert Kishenganga’s water through a tunnel to Wullar Lake is upstream, it means most of the areas in Pakistan Administered Kashmir served by Neelam will go dry. Pakistan’s dream of building a power house in its part may never materialise.
When it comes to oil and gas exploration in the Karewas, like the state’s water and hydropower resources it is likely that the ownership of any such resources will go to the government of India. J&K state might, at best, get a 12 per cent share. Massive exploration and drilling activities in our Karewas – our best dry and fresh fruit producing lands – will destroy them ecologically.
The question that needs to be raised vociferously is: why J&K’s governments fail to safeguard J&K people’s interests? Who gives them the mandate to decide on such crucial issues without consulting the people? These questions must take the shape of a peaceful movement. And all of us need to be a part of it. That movement must begin today. Tomorrow will be too late.
Feedback at arjimand@greaterkashmir.com
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