Does New Delhi support a new Union Territory?

Article 370 has always been a hot topic in the Republic of India. Several people have a variety of opinions regarding it. Most of the time these opinions are polarised. In this article, I am not going to talk about how Article 370 was productive or not. I am going to present a different aspect of it, i.e. economic impact on the new Union Territory after the removal of Article 370.

India’s Home Affairs Minister has presented a bill to remove the article. New Delhi has promised growth in the new Union Territory. So will the removal of Article 370 have such a significant impact? To understand it we have to analyse the data.

More than a year since the Government has removed the 370. So sample size is very small to conclude whether is it profitable or not, especially when almost half a time country was under lockdown. Thus, we have to use a different method to get a clear view. We will study the different investments and cash inflow in UT after scraping the article. These investments will contain all public and private investments in major sectors

New Delhi has claimed that Article 370 has blocked developments in Jammu and Kashmir; by scrapping it a new window of opportunity will be created. It will now allow the rest of Indians and FDI to flow into the economy. The education system, Tourism Industry and agriculture industry etc. will get a much-needed boost as some of the sectors in the Union Territory are lacking compared to other states and UTs in the country.

I will start with my favourite and most productive type of investment strategy i.e. Public-Private Partnership. New Delhi has selected a Public-Private Partnership strategy to pull investment in Jammu and Kashmir and I think this is the perfect strategy in this case. The public industry will have the backing of New Delhi thus, it will act as a guarantee to their investment, and the Government will also enjoy control over private investors so that these firms do not exploit residents.

The Indian Government is also providing incentives to firms to start their operations in UT. These incentives can be as high as INR 10 crore per project. These incentives will surely encourage firms to start their operations in the Union Territory and this is not the only way New Delhi is also allotting land at concession rate to the industrial areas on lease for 90 years. Leasing land on concession rates is common in India, especially when authorities want to force industries to start working in a specific area.

Government is not only relying on private industries. Most of the heavy investments in a UT is sponsored by New Delhi. National Highway Infrastructure Development Corporation to develop 5 tunnels which will cost $ 3.2 Million, This will ensure better connectivity to other parts of India so that trade can be increase. Authorities are also creating Srinagar, a smart city. As you all know a smart city is a concept created by the govt. to develop cities like Mumbai and Bangalore etc. Getting a smart city in the heart of Jammu and Kashmir can be a game-changer as per my perspective. A smart city will not only give better connectivity but also will create a huge employment opportunity in the Union Territory.

Roads play an important role in the development as it is a very economical way of transporting goods from one place to another and authorities are planning to grab this method of transport by adding 1000 KM of highways to the pre-existing 35,289 KM of highways. The Ministry is planning to achieve this target by the end of the financial year 21-22. This will unlock rural areas and with better roads, the domestic business will also receive a massive boost. The government has not stopped here as it understands the potential of the agricultural and handloom industry in UT and to support it with a new freight terminal with a carrying capacity of 15 lacking to 20 lakh cargo is being planned and will connect with the newly constructed freight corridor.

New Delhi also plans to create dry ports each at Jammu, Srinagar and Rangreth. Dry ports act as a buffer station for goods. This will not only allow domestic goods to be quickly distributed in other parts of the country but also will able to reach ports across south India and east India for export purposes and vice versa. This local product along with agriculture products will meet higher demand in the market and will surely pump up demand and supply game in UT.

Tourism and film tourism has a lion’s share in the Jammu and Kashmir’s economy thus; if we want to develop our new UT then we should focus on improving infrastructure. Cabinet has also proposed 48 KM of the Metro project for Jammu and Srinagar which is expected to be completed by 2025 along with a couple of new airports each for Jammu and Kashmir, these entire projects will give better connectivity to and from the Union Territory. Some hotel chains are also expected to start their operations. It will help the tourism industry to expand shortly.

Housing is also a big problem in the Union Territory, to solve this issue and provide a home to common people govt. will build 1 lakh to 2 lakh houses by the end of 2022. These houses will be available across UT. Authorities will also develop a new satellite township in Jammu and Kashmir.

The next big issue is the electricity currently there is a problem of supply of electricity. This difficulty might arise after the inception of the industry but to tackle the complications New Delhi has already started working on different projects to meet the current and future demand and surprisingly this time authorities' approach was to go green. The government has proposed a $64.09 billion solar power project and a $56.94 billion wind power project across the nation.

These are a few major once which will have a significant impact on the development of UT. There are many other small projects like free Wi-Fi in the state, the establishment of a new educational institution, the establishment of the pharmaceutical industry, doubling the output of the irrigation projects and raising the supply of freshwater etc. This will also have a significant impact on the development of Jammu and Kashmir.

Conclusion -

As per my observations, the Indian government is trying its best to boost the economic development in UT. There are plenty of projects going on and many in the pipeline which has the potentials to have a significant impact on the lives of common people. Private industries are also taking an interest in investing in the Union Territory. The introduction of the private industry is key for development as per my opinion. Private institutions have better quality and efficiency in the working and now the extra burden of investing in the UT by themselves can be shifted from the government. The FDI flow will give the much-needed factor of production i.e. Capital, now businesses in the Union Territory can expand beyond their existing limit. New infrastructure projects will boost the transportation of goods in both directions which can tackle several issues in UT. I am not saying everything is perfect right now but I am pretty much sure it is heading in the right direction. After reviewing all the projects and their potential I can confidently say that the New Union Territory is developing.