Various mujahideen groups in Afghanistan received arms from the CIA-ISI opposing the Soviet troops in the 1980s. Despite these arms being pumped into Pakistan in large quantities through various routes, little was received on the other side of the pipeline. Instead of checking the leakages and pilferages in the pipeline, the CIA increased the supplies. What is happening in Jammu and Kashmir is the same story. The Union government has been pumping funds into J&K, but little emerges on the other side. There is enormous pressure on the Union government to increase the funding, but what is being ignored is the pilferages and leakages.

Habibullah’s statistics are revealing and shocking. He states: Across the nation, the Indian government generally funds 20 percent of the cost of state development, requiring the states to raise the remaining 80 percent themselves. From the 1950s until 1990, however, the state of Jammu and Kashmir enjoyed the reverse, receiving 80 percent of its funds in the form of loans from the central government. Since 1990, when the onset of insurgency exacerbated the state’s financial problems, 100 percent of the state’s budget has been financed by the central government, of which only 20 percent is repayable.

One wishes the author had explained and expanded on the implications of this important fact. Until and unless the problem of pilferages and leakages is stopped or significantly reduced, nothing much can be achieved. A leading analyst on Kashmir, Amitabh Mattoo, now the Vice Chancellor of Jammu University, has been quoted saying that corruption in J&K during the NC government would make Laloo’s Bihar seem like Plato’s republic. Has the Mufti government been able to make any impact on this crucial aspect of governance? Habibullah talks about the vested interests that have a major stake in keeping the conflict alive, otherwise the flow of funds from the Union to the State would have reduced considerably. Even if funding is received from regional and international financial institutions, as Habibullah suggests in the later part of his report, unless the State and Union governments take measures to combat corruption, they would not be able to make any impact at the ground level.

For example, Habibullah focuses on the Dal Lake’s contribution to the economy of the State. He writes that while the Indian government has flagged the Dal for restoration under its National Lake Conservation Plan, it has made little headway in cleaning and rejuvenating the lake. Numerous articles have appeared in the Kashmiri media on the need for cleaning the Dal and what the Union government and international community should do to restore the lake. What goes unnoticed, as even Habibullah fails to mention, is the level of corruption involved in the Save Dal Movement. Richard Mahapatra, Chief Reporter of the Centre for Science & Environment (CSE), New Delhi, stated before the Parliamentary Committee on Science & Technology, Environment & Forests, headed by C Ramachandriah that out of the huge sums of money provided by the Central Government, only 20 percent were actually spent and that towards meeting the establishment cost and the State Government has spent Rs. 267 crores to prepare 24 reports, the implementation of which is hardly visible. The problem clearly is not only funding, but also in implementation.

What about the role being played by the J&K Lake and Waterways Development Authority (LAWDA). LAWDA is seen as one of the most corrupt organizations by many Srinagaris; Mahapatra informed the Parliamentary Committee that LAWDA was in fact “preparing for the funeral of the Dal.” In fact one of the recommendations of the Parliamentary Committee was to shift the LAWDA office from within the lake and relocate it elsewhere to set an example before the people that the State Government is keen to conserve the lake!

Commenting on the need to exploit wooden furniture marketing, Habibullah comments: The Jammu and Kashmir government’s joinery mill was established in Pampore, south of Srinagar, in the 1950s. Aspiring to rival other world class furniture manufacturers, the government employed foreign experts to ensure that the mill met international furniture specifications. The mill is now closed. Mismanagement led to declining quality and wasteful overuse of valuable raw materials. What can the Union government or the international financing institutions do if the delivery mechanisms at the state level fail to perform? One way is to threaten that the funds would be slashed unless it reaches the other side. Misgovernance and non-performance would then become a political problem. What options does the Union government have? Wish Habibullah had commented on this also.