Srinagar, Oct 11: Jammu and Kashmir requires an estimated investment of Rs 1.44 lakh crore over five years to address deep-rooted development deficits and expand employment opportunities, according to a new research report that has identified educated youth unemployment, inadequate earnings and a weak formal economy among the region’s most pressing challenges.
The report, released by the Rajiv Gandhi Institute for Contemporary Studies (RGICS), accessed by Rising Kashmir, estimates that a coordinated investment programme could generate approximately 9.27 lakh additional jobs and increase annual economic output by Rs 34,206 crore by the fifth year. However, these figures are projections under the institute’s proposed development model, not jobs already created or investments committed by the government.
Titled “A New Vision for J&K and a New Strategy for Realising that Vision”, the study examines the relationship between Jammu and Kashmir’s economic structure, social development indicators and environmental resources, arguing that substantial investment alone will not deliver lasting economic progress unless it addresses the underlying weaknesses restricting employment and incomes.
The findings present a picture of an economy where considerable natural resources and a large network of small enterprises coexist with limited formal employment opportunities and inadequate earnings for a significant section of the workforce.
According to the study, Jammu and Kashmir had approximately 8,99,874 unincorporated enterprises, based on the Annual Survey of Unincorporated Sector Enterprises (ASUSE) 2023. Yet the size of this enterprise base has not translated into sufficient secure and adequately paid employment.
The report identifies what it describes as economic dualism: a relatively small formal sector operating alongside an extensive informal economy, where self-employment and small-scale business activity do not necessarily provide sustainable incomes.
This distinction is significant in Jammu and Kashmir, where unemployment among educated young people remains a persistent concern and the availability of stable employment continues to lag behind aspirations for government and organised private-sector jobs.
Rather than treating the number of enterprises as an indicator of economic strength, the study draws attention to their capacity to generate productive employment, improve household earnings and sustain business activity over time.
The proposed five-year investment requirement has been estimated at Rs 1,43,849 crore, of which Rs 94,764 crore, or nearly 66 per cent, is intended for enterprise development and economic activity.
Another Rs 29,953 crore has been proposed for social development, including education, healthcare and nutrition, while Rs 19,131 crore has been earmarked for environmental restoration and the regeneration of natural resources.
The distribution of proposed investment indicates that enterprise development accounts for the largest share of the strategy, but the report argues that employment generation cannot be separated from improvements in human development and the protection of natural assets.
It identifies deficiencies in foundational education, healthcare and nutrition as constraints that can weaken the capacity of people to participate productively in the economy.
The study cites the Annual Status of Education Report (ASER) 2024, which found that only 37.8 per cent of Class V students in rural Jammu and Kashmir could read Class II-level texts, highlighting the challenge of translating school enrolment into meaningful learning outcomes.
It also draws attention to worsening anaemia indicators between successive rounds of the National Family Health Survey, placing nutritional deficiencies alongside poor learning outcomes as barriers to long-term social and economic development.
On employment, the institute proposes strengthening existing small enterprises rather than relying exclusively on large industrial investments to create jobs.
Its strategy distinguishes between enterprises serving local demand and those capable of accessing larger metropolitan and export markets, with different approaches proposed for financing, infrastructure, technology and market access.
The report argues that expanding economic activity without improving the productivity and earnings of existing enterprises could leave the structural weaknesses of the labour market largely unchanged.
Under the proposed framework, approximately 9.27 lakh additional jobs could be generated over five years, equivalent to an average of about 1.85 lakh jobs annually if the projected employment gains were achieved evenly.
The study also estimates that the programme could add Rs 34,206 crore to annual economic output by the fifth year.
These estimates, however, depend on the implementation of the proposed interventions and cannot be treated as guaranteed employment or growth outcomes.
The financial requirements are substantial. The estimated investment of Rs 1.44 lakh crore translates into an average annual expenditure of nearly Rs 29,000 crore, equivalent to approximately 11 per cent of the Union Territory’s stated gross domestic product for 2025–26.
According to the report’s proposed financing structure, institutional lending would account for 40.2 per cent of the investment, followed by government contributions of 22.9 per cent and community and household contributions of 22.4 per cent.
Climate finance would provide another 8.3 per cent, while philanthropy, corporate social responsibility contributions, individual giving and voluntary participation would account for the remaining share.
The proposed funding structure underscores the dependence of the strategy on participation from banks, public institutions, households and other financing sources, rather than government expenditure alone.
However, the report does not establish that the proposed financing has been secured or that the institutions expected to contribute have agreed to provide the required resources.
The study also identifies environmental degradation as an economic concern, warning that damage to forests, water resources and agricultural land could undermine livelihoods in communities dependent on farming, horticulture and other natural-resource-based activities.
It estimates that approximately 7,087 square kilometres of recorded forest land in Jammu and Kashmir lacks tree cover and proposes regeneration measures as part of its wider development framework.
The institute argues that environmental restoration, social development and enterprise expansion must proceed together if investment is to generate sustainable economic benefits.
The report’s central concern is that development measured primarily through expenditure, infrastructure creation or the number of business establishments may not adequately reflect improvements in household incomes, employment security and living standards.
Its findings also raise questions about the scale of financing and institutional coordination required to implement a development programme of this magnitude.
The RGICS assessment is an independent research proposal based on existing statistical evidence and illustrative development models. It is neither a government-approved investment programme nor an official assessment of the Union Territory’s funding shortfall.
Whether the proposed investment could deliver the projected employment and economic gains would ultimately depend on financing, implementation capacity and measurable improvements in productivity and household earnings.
