Bridging the Divide on Creating New Jobs in the Valley

Jahangir suggests ways to make the Rangrajan Committee's Jobs Plan meaningful


(Mr. Jahangir Raina, 37,was born in Srinagar. He matriculated from the Tyndale Biscoe Memorial School in Srinagar, and received "A" Levels from the Ealing Green High School. He graduated from the London School of Economics (LSE), and did his post-graduate studies in Operational Research at the Lancaster University, United Kingdom. Past experience includes work was a researcher in the British Telecom (BT) and an analyst for the Phillips Group. Mr. Raina is the founder-owner of iLocus in Kashmir, doing market research in emerging telecommunications technologies, and the Chairman of the Information and Communications Technology Association (ICTA) of J&K.)


Rangarajan Plan

Dr. Rangrajan’s Job Plan for J&K recommends a two-pronged strategy. While one prong deals with skills development the other deals with sectoral initiatives. In theory, strong skills lead to strong sectors. The assumption is correct. The intentions seem noble. However the vision is lacking. Unless we are able to set in a self-feeding and a self-sustaining virtuous cycle whereby ‘Skills’ acquired lead to a ‘Strong Sector’ which in turn invests in new and advanced ‘Skills’ – there is no way the private sector in Kashmir will generate sustainable employment. It is always a challenge to set in such virtuous cycles of growth: Hence the developmental incentives and government interventions such as the Rangrajan Committee.

The intervention that Rangrajan Committee proposes is that the skills be developed outside Kashmir, mostly in the Indian metros because that is where the successful corporate India is based. Therein lies the disconnect. Skills developed in corporate India cannot create jobs in Kashmir unless the youth undertaking the training are contractually bound to return. Clearly, majority of the proposed 1.5 Lakh youth who opt for a skill development program outside Kashmir will not be among the existing job creators and entrepreneurs in the valley. Majority of them are likely to be youth who are either out of work, or those not satisfied with the salaries they receive within the private sector in Kashmir. The question is whether the youth falling within that demographic profile and acquiring skills within corporate India will be motivated enough to return and serve within the private sector in Kashmir once the skills training is completed. This is an important factor to consider given the salary structures that exist in the private sector in Kashmir. The reality of our private sector is that while the skilled manpower is badly needed, we are unable to pay the requisite compensation that can compete to a certain extent with salaries prevalent in the Indian metros. It is for this reason that we have suffered a colossal brain drain over the years thus weakening our private sector even further.

It is also precisely for this reason that both the Chief Minister and Dr. Rangrajan have realised and admitted that this job plan is meant for job opportunities within India and shall serve as a means for integration of the youth with India.

One is tempted to conclude that the Job Plan has certain political connotations even if that was not the original intent. The Job Plan can easily be (mis)interpreted as a social re-engineering to displace the Kashmiri youth. Therefore the intervention chosen by the Rangrajan Committee needs to be re-assessed. Unless there is a causal link between skill development and creation of local jobs, these recommendations are only going to create problems.

The state government is over-employed. Jobs have to be created by the private sector. Brushing aside the politics of this Job Plan, its ultimate casualty will, ironically, be the local private sector, which the Plan actually seeks to strengthen. The private sector in Kashmir is largely sustained by youth aged 25 to 35 who are typically semi skilled. Surely they will opt for enhancement of their skills in the corporate world of India, which gives them a leg up in finding a suitable job outside. While at the individual level, there seems to be nothing wrong with that, from the perspective of our local private sector, this qualifies as a brain drain. A brain drain of 1.5 Lakh youth will shatter the local private sector.

An ideal skills development program would propose interventions that strengthen the local private sector instead, because it is that very segment which can create new jobs. Those are the types of interventions that will set in the virtuous cycle. We admire the willingness of Indian corporate sector to train our youth. But we should also bear in mind that most of them have a huge intake of fresh graduates each year. They bear the costs of training these graduates. Rangrajan Committee recommendations should not become an opportunity for the Indian corporates to get paid for investing in their own future employees. The Committee has proposed a spending of Rs. 757 crore for such trainings. It would be wise to spend a proportion of that expenditure on capacity building of the local private sector. The capacity building can be carried out by the same corporates in India who get paid in the process. That would amount to strengthening the existing structure, which will ultimately produce the requisite jobs. The Indian corporates have indicated the possibility of employing the youth they take up for skills development training. Instead of that, if the capacity building of local private sectors is accompanied by exploring outsourcing arrangements with them, jobs will automatically, and instantly, be created upon completion of capacity building. Apart from being compensated for this, the capacity building could also help the Indian corporates exploit the labour arbitrage that exists between Kashmir and the tier 1 cities in India.

The other intervention that could set our virtuous cycle of employment in motion, and something that may be implemented concurrently, is the reservation of business for local private sector in the state’s public sector projects. Throughout history, governments all over the world have pulled new public sector projects out of thin air just to create new jobs. That conventional wisdom, however, seems to be wasted on our economists. In each of the sub-sectors of our economy, there are pending government projects worth thousands of crores. The state government has shown preference to contract such work out to the larger private players in India. These projects need to be diverted and contracted out to the local private sector and the best way to do that is to have specific regulations and reservations in place.

If the state projects are contracted out increasingly to the local private sector, that will provide the latter the requisite exposure to self-develop their skills. Development and enhancement of skills will improve the qualification of private companies for participation in more government projects. The state government can get started on this intervention by studying the capability of the local private sector and plan the implementation of its infrastructure projects accordingly. The connection between government projects and job creation has to be established in earnest.

The reason why that connection, and connection in broader sense between skills and local job creation, has not been established by Rangrajan Committee is because the members of the committee did not go direct to the horse.

While the Committee interacted with the Associations and Forums representing various segments of the local private sector, it did not interact directly with the entrepreneurs and private businesses. The Job Plan by the Committee, as such, is based on secondary research, not primary research. Interestingly, except for Shakeel Qalandar, none of the Committee members have ever really created a job in Kashmir. The Committee needs to take input from people who have first hand experience creating jobs in Kashmir. For future, such Committees need to empanel entrepreneurs who have been in the thick of things, those who have learned how to survive in challenging conditions, those who have created jobs despite facing difficulties.

I would therefore suggest the Committee to consider putting the Job Plan report out for public consultation in the J&K. Let the current version be treated as the first cut rather than end up becoming ‘Yet-Another-Job-Plan’. Let the general public, businesses, academics and forums provide their feedback on the report. That will evolve recommendations which are consensus driven.