Development is Freedonm

Sajjad discusses the role and importance of the regional rural bank, called the Grarameen Bank, in Kashmir's future development

(Mr. Sajjad Bazaz, 45, was born in Srinagar. He attended the Khalsa high school and the Sri Pratap College in Srinagar. He received his bachelor's degree in Media and his master's degree in Mass Communication and Journalism from the University of Kashmir. Mr. Bazaz has over two decades of experience in journalism (both print & electronic), and he is author of the book "Bankwatch" which is about a financial scenario with particular reference to the J&K state. He is currently incharge of corporate communications department in a leaduing financial instution in J&K. Mr. Bazaz likes to spend leisure time watching movies and enjoying company of his friends.)

J&K Grameen Bank

The Kashmir conflict being one of the most staggering conflicts and its persistence involving two nuclear powers needs no introduction. Besides, the economic cost of the conflict cannot be confined to a particular sector of economy, as it has affected the important sources of livelihood of common people. Besides exacting extensive damage to the infrastructure of the state, the conflict has discouraged private investment and pushed the economy towards stagnation. Precisely, in this gruesome scenario it is the common people who suffer the most. However, this needs to be realized that even in conflict situation like the one prevailing here, development programmes must go on.

Economic development of the state cannot be overlooked without intruding on political consequences of the conflict. It is also a fact that the Kashmir imbroglio cannot be resolved only by means of economic development, but there is no fun to oppose or stagnate vibrant economic growth which is only for the betterment of the lives of the people.

Here I quote the theory of “development as freedom” by Amartya Sen in which he argues that development and freedom are intimately related. Freedom is both constitutive of development and instrumental to it. Amartya Sen delineates five freedoms that are needed to bring true development: political freedoms; economic facilities; social opportunities; transparency guarantees; and protective security. Based on this premise, any economic underdevelopment amounts to lack of freedom. In the context of Kashmir situation, all kinds of freedoms that are both “means and ends of development” are under constant threat for the past two decades.

Violence has also directly affected other important sources of livelihood such as agriculture, horticulture, and the handicraft industry. The J&K state is known for wide variety of agricultural and horticulture products. However, the conflict environment has prevented from maximally tapping the potential of these sectors. Precisely, here overall suppressed economic development needs energetic efforts from all relevant sources to put all engines of growth back on the track.

On economic front, one of the major developments, which took place in J&K State last week didn’t get much attention was formation of a new regional rural bank – J&K Grameen Bank. The new bank carved out through merger of Kamraz Rural Bank and Jammu Rural Bank - sponsored by J&K Bank – began its operations from July 1, 2009. The area of operation of J&K Grameen Bank with 172 branches has the combined area of operation of the amalgamated Regional Rural Banks.

Even as the Regional Rural Banks have a major role to revolutionise the rural economy by way of providing adequate financial support to different sectors of rural economy, the performance of these has so far remained dismal. The erstwhile Kamraz Rural Bank and Jammu Rural Bank had advanced Rs.357 crores against their total deposits of Rs.1091 crores, thereby registered a poor Credit - Deposit ratio of just 33 per cent (approximately) as on December 31, 2008.

The new Regional Rural Bank - J&K Grameen Bank – has a huge challenge of revolutionising the rural economy of the state, which, so far, has not been realised to its potential. Agriculture, horticulture and the handicrafts sectors have become the survival mechanisms for the most of the people in the state, but the prevailing situation has not allowed these sectors to flourish. Precisely, the conflict situation here continues at a huge economic cost and under these circumstances the strategic positioning of the Grameen Bank to give boost to agriculture and allied activities, and other sectors of rural economy in its area of operation is need of the hour. It has to pull the sources of livelihood of people associated with tourism, agriculture, handicrafts industries etc out of stagnation. Otherwise it would be old wine in new bottle.

The first and foremost thing is to customize products and services suiting the rural economy. For example, It can lend a huge support to preserve and promote the traditional arts and crafts of the state by financing the people engaged in making shawls, silk carpets, rugs, embroidered clothes, silver-work, papier-mâché work, wood-carving, silk-weaving etc. It can even tailor a financial product for artisans associated with ancient art of stone carving, who, so far, have remained outside the ambit of formal financing. This is an area in which Kashmir has its own niche and could be tapped through formal financing.

Kashmir’s economy is highly dependent on agriculture, supporting about 70 per cent of its population. The horticulture industry in Kashmir is considered the bulwark of rural economy in the state. Nearly 75 per cent of temperate fruits in India are grown in the state. The cultivated orchards yield fine quality of pears, apples, peaches, cherries, walnut, almond, saffron, apricot, strawberry, plums, etc. These sectors provide job facilities for the thousands of people directly and indirectly. Considering the growth prospects of this sector, the new regional rural bank needs to reposition itself by providing timely and adequate finances to the farmers.
The Grameen Bank can play an effective role in tapping the potential in Sericulture, fisheries, floriculture, medicinal and aromatic plants, mushroom production, and apiculture. Sericulture is a traditional occupation for a large section of the population engaged in the extraction of silk fiber. But, today the industry is not enjoying glory due to inadequate infrastructural and agricultural inputs. In fisheries sector, according to an estimate, the 27,781 km of rivers and streams in the state could provide the facility for the farming of over 40 million tons of fish. If figures are to be believed then the right strategy cannot only cater to the local demands but will also enable the state to export.

Take the case of animal husbandry with a large livestock in form of cattle, sheep, goats, poultry, etc. The huge gap between the demand and supply in terms of meat consumption compels the state to purchase the same from other parts of the country. The state provides a suitable climate for cattle breeding and it should be used sufficiently. Tailor made financial products for sheep farming can go a long way in encouraging local farmers to establish their units in the sector. Besides, dairy development too has a vast scope which needs formal financing at the grass root level.

In succinct, the new Regional Rural Bank can prove as one of the instruments of change as far as tapping the potential of rural economy is concerned. Let it be a bank of villages, as it is the time to unearth the state’s economic potential for a durable peace, prosperity and profits for all.