Disinvestment Policy

After the abrogation of Article 370, Jammu and Kashmir has made every possible effort to overcome the economic stagnation, which it witnessed for more than seven decades.

In the post-August 5, 2019 era, the region has witnessed a transformation in its economic and governance landscape. Disinvestment, a crucial policy tool employed by various states across the country to unlock economic potential, is now a focus in J&K as well. But the big question is whether the incumbent National Conference government is in sync with the broader national vision? Is it ready to shed past inefficiencies and monopolistic policies?

The disinvestment policy of the J&K government is aimed at reducing the UT’s financial burden, promoting private sector participation, and unlocking the true potential of dormant public assets.

Several defunct or underperforming Public Sector Undertakings (PSUs) and government-owned enterprises are being considered for either outright sale, strategic partnerships, or privatisation.

The revival of defunct units in J&K either through disinvestment or Public-Private Partnership (PPP) models could generate employment and boost local industry. However, the success of these initiatives depends on whether the NC government has the political will to implement reforms that align with national development goals. Unlike J&K’s traditional approach, many states across the country have actively pursued disinvestment and private sector involvement in public assets.
States like Maharashtra, Gujarat, Tamil Nadu, and Karnataka have successfully privatized state-owned enterprises, leading to better services, job creation, and increased revenues.

However, some states still cling to a monopoly system where government entities dominate key industries. This approach not only stifles competition but also discourages private investments, resulting in inefficiencies and corruption. The question is whether J&K will continue to follow its old monopolistic path or embrace a more dynamic, market-driven model. The current NC-led government has to align its policies with the national vision of Atmanirbhar Bharat while addressing the region’s unique concerns.

Historically, J&K has operated under an unsaid rule—prior to August 5, 2019—where economic discussions were suppressed, and private enterprise was discouraged. This led to an over-reliance on government jobs and stagnation in private sector growth. The disinvestment and privatisation of loss-making assets should not be seen merely as an economic necessity but as a way to empower local businesses and entrepreneurs.

The pre-2019 bureaucratic mindset of using laws as tools of oppression and suppression must be completely dismantled. If the NC government continues the legacy of roadblocks, J&K’s economy will remain in the shadows.

With the current governance setup, the onus now falls on J&K’s Chief Minister, Omar Abdullah, to steer the region towards economic progress. The employment burden on the government sector needs to shift towards private enterprise, startups, and industries. This cannot happen without a change in mindset—both within the bureaucracy and the political leadership.

Omar Abdullah regime must take concrete steps to facilitate business growth, simplify regulations and reduce red tape. It should ensure ease of doing business by eliminating all the hurdles, create investment-friendly policies that attract national and international investors.

Alleged bureaucratic harassment has been a major deterrent for entrepreneurs. Strict action must be taken against officials who engage in corrupt practices or deliberately delay business operations. Instead of focusing solely on large corporations, small and medium enterprises (SMEs) need government support. A hand-holding approach should be adopted, where small business owners are guided and facilitated rather than being burdened with hurdles.

Regardless of caste, creed, or political affiliation, the development of J&K must be the priority. The Chief Minister needs to rise above petty political battles and deliver governance that benefits the common people.

Denizens of J&K have long suffered due to misplaced priorities and vested interests that have prevented economic prosperity. The monopolistic approach of previous governments has led to the decay of crucial industries like silk production, tourism, and manufacturing.

Now, a new vision must emerge—one where business and entrepreneurship are encouraged, not stifled. The extortionist approach that prevailed before August 5, 2019, must be completely dismantled. The rule of law should serve to facilitate growth, not suppress aspirations. J&K stands at a critical juncture. Will it embrace economic liberalization and open itself to private sector growth, or will it continue to cling to outdated monopolistic policies? The choice lies with the current leadership.

Chief Minister Omar Abdullah has an opportunity to redefine his legacy—not as a leader who merely managed the status quo, but as someone who drove meaningful economic transformation. He must prove that his government is not a continuation of the inefficiencies of the past but a vehicle for progress, employment, and prosperity.

Sheikh Khalid Jehangir writes for Greater Kashmir on Politics, Defence & Strategic affairs and is presently heading International Centre for Peace Studies,

New Delhi.