The Kashmir Economy's Truth And Myths with Haseeb Drabu

In this conversation, journalist Puja Mehra speaks to Former Finance Minister of Jammu and Kashmir Haseeb Drabu about the inner workings of the Kashmir economy, opportunities for businesses in the valley, what the abrogation of Article 370 meant for businesses and much more.

ABOUT HASEEB DRABU
Haseeb Drabu is an Indian politician, economist and the former member of Jammu and Kashmir Legislative Assembly. He was elected as Finance Minister of Jammu and Kashmir in the BJP-PDP coalition government from 2015 to 2018. While he was the finance minister of J&K, Jammu and Kashmir reached Rank 7 in fiscal management. As a state finance minister he was also an active member of the GST council in its phase of formulating and introducing the new tax regime in India.

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TRANSCRIPT

Puja Mehra: Dr.Drabu, thank you so much for taking out time for this podcast. 

I want to talk to you about the very significant development in Kashmir's economy, where a company that you mentor has just received a proposal for foreign investment. 

But before I come to that, so that my listeners can understand the significance of what has happened, I want you to take us through how the Kashmir economy was structured, what it was like right at the time of independence and partition, and then the various political developments that happened over the years and how that shaped helped structure the Kashmir economy…so that we'd be in a better position to understand the developments in 2019 and where things stand today. 

Haseeb Drabu: Sure. Before we come to 1947, one of the interesting things about the Kashmir economy, in particular, is that it became an economy post a corporate transaction. So this is perhaps the first economy in the world, which became an economy post a corporate transaction. So the East India Company sells Kashmir in 1846, after it faces a crisis in West Bengal; in Bengal, in Calcutta, and there was pressure on the balance sheet. The first asset monetization they do–is to sell Kashmir to Maharaja Gulab Singh for 75 lakh rupees, actually quarter of a million sterling. And that has a huge impact on the economy in terms of how the resources are mobilised; what happens to taxation; what happens to import prices; what happens to exports? So the biggest jolt comes into that. So the disruption in the Kashmir economy actually starts with a transaction. And strangely, there has never been a corporate in J&K ever, except for J&K Bank in 1996. 

So, 1947, the economy is pretty much driven by what I think is perhaps again the only place in the world where you had massive, massive restructuring of the assets, debt markets, credit markets in 1948 through a land reforms act called the Big Estates Abolition Act. 1948. And these were the most radical land reforms anywhere in the world outside a communist regime. Even Kerala does it in 1956. J&K does it in 1948. 

But like much else, it's never recognised. It's not a part of the economic history of India; that here is a democratically elected government and it enforces land ceiling. It does land restructuring completely. Not only does it kind of do land restructuring, it redistributes land to the tiller, and completely alters the debt market. It does an 80% waiver, 50% waiver of the principal, no interest, and makes settlements with money lenders, private money markets. So the economy is really shaken out of its slumber, so to say. And this is driven by a document which starts in 1944, somewhere around 1944, perhaps 43-44, called Naya Kashmir which was written by a set of communists who were working in J&K, in particular by a couple called B.P.L Bedi and Freda Bedi. This is Kabir Bedi's father, who was a communist activist working in Kashmir, and his Austrian wife Freda Bedi. They were responsible for drafting the document and it was kind of became the policy of the National Conference, which at that time was a party that led the freedom struggle of J&K from the feudal setup. 

So 1948, a feudal economy gets transformed into a less feudal economy which is altering the modes of production, the land distribution...

PM: What is the main source of employment for the people, largest percentage of workforce
HD: Even then, as of now, it’s agriculture. But what happened post land reforms, a lot of landlords, zamindars tried to avoid the ceiling by converting agricultural land into horticulture, which is where the horticultural thing starts in J&K, becomes a major player because a lot of apples, peaches, plums, and pears. But horticulture in general, commercial agriculture. So once you had a land ceiling on subsistence agriculture, which is basically paddy and largely paddy, a lot of landlords converted their paddy fields into horticulture. That has a huge set of implications which can come to separately. But it's triggered off the entire thing on horticulture. And today, as in when you look at it in terms of last 20 years, J&K has been the 6th largest producer of apples in the world on its own. India is the fifth largest. And 90% of India's apple production comes from Kashmir. So on a standalone basis, it's the 6th largest economy in the world. And there's no other production or any other variable where I think Kashmir will qualify to be in the first top ten in the world. As I said, one is this horticultural thing. 

But prior to that, in 1948, there was a huge craft segment, the artisanal economy of J&K, which was really into handicrafts. And it has a history of handicrafts, which is largely drawn from Central Asia because that's where most of the activity is used to, the Silk Route. 

HD: No, I'm not….really talking of …Pashmina is a very small segment, but shawls, yes, not of pashmina entirely. That was the high-end segment. But there are ruffle shawls and there are wool shawls and then there is embroidery of different kinds. There are rugs, which are there. So a whole range. Paper machete is a huge industry there. So a wide diversified range of crafts in Kashmir. And the special thing about that being that while elsewhere you see crafts are more or less decorative, but in Kashmir crafts are functional. So every piece of handicapped that you actually get is used. It's not put on a wall, so either a carpet or a shawl. It's all a very functional kind of a thing. And it all draws from Central Asia, Iran, the kind of designs and whatever else. So that's one large part. 

Since we're also on the spice route—There was a lot of trade which is happening in spices. Saffron being a huge commercial crop that actually drove feudalism in J&K. Kosambi has a very nice, interesting chapter in his book on how a single crop can drive trade and commerce. So we did do some trade and spices. There was some tobacco was grown. It was again exported at that point of time. So largely, if you were to look at it, it was an agrarian economy which had a strong trade segment till the mid 70s, which is when the horticulture becomes big because of markets, the markets start expanding. Apple gets a good commercial return and that's when the apple thing becomes very important. So then it becomes and by mid 70s, you begin to see that J&K doesn't have a poverty issue because of land reforms. It's a very xxxxxx. And the economy gets structured largely in terms of an export-oriented economy. So you have apples are exported, you have crafts are exported, you have tourism, which is kind of coming from outside. And it's an import-dependent economy. So it's export oriented, import dependent economy, which gives it a very different nature of policy making required. 

Plus, of course, one shouldn't forget that by….  in the initial stage, the 50s, then somewhere around the mid 60s, there was public investment, autonomous public investment, which also drove some infrastructure, be it in terms of roads, in terms of…. But the size and scale of that was not very large. Instead, what grew large from government side, from public expenditure side was government jobs. So you had four and a half million people working in government on a total base of about a crore and 30. So this is perhaps as big as what Bihar would have or what up would have in terms of….So a huge amount of government employment, which created a certain structural dissonance in the economy.

HD: It was corruption as a mode of cohesion, if you want to call it that. You were kind of spending money on various things. There was a particular regime, very notoriously known as the Bakshi regime between, I think, 1953 and 57, when much of this happens and then it becomes a part of the DNA of policy making, as it were, in J&K. 

But what is also interesting to see is that if you map the growth of J&K economy in terms of incomes and whatever, it never really follows a national pattern. So when the national economy is doing a dip, JK still does very well. When the national economy is doing very well, JK still maintains the quote unquote, Raj Krishna's Hindu Rate of growth of about three and a half - 4%. So it never aligns. It's not asymmetric with national growth, actually, because of structure of the economy. So that's where it led….The boom really comes in 1970s with apples becoming a significant part and getting a market price, which was very different. Plus the export markets for crafts opening up, Europe opening up big time, getting lots of stuff. So that was the boom period, the mid 70s, and that led to an enormous amount of construction in the system. And then the economy took off in a direction which few have understood. 

 

PM: And government of India's policy in those years of heavy public investments, large PSUs. Does that play a role in Kashmir's economy or Kashmir remains isolated from that…

HD: Strangely. Never. Actually. Quite strange that there was no heavy public investment. Not that I would advocate it also, but I think there was one small little HMT watch factory, which was a part of the public investment, but one didn't see huge PSUs, one didn't see a large amount of public investment. As I said, we saw a lot of public expenditure, not public investment. I mean, one way would be, which I would tend to subscribe, is that there is no need to get into big, large public or private corporate investments in J&K. The economy should be, and we can say this now, now that we are in a different regime of ESG and sustainability and growth. You perhaps could think that's a good thing that happened, that there was not much of public investment because the economy still can be resurrected through a different set of means, like both, whether it's crafts or whether it is horticulture. Both are ESG compliant. Sustainability is the big thing there. So you could considerably redesign the JK economy as India's potentially biggest ESG economy among the states, because no other state has this kind of structure which actually naturally aids ESG. And also the fact that when you look at other economies, you have to introduce policy instruments for redistribution, which you don't have to do in J&K, because the craft segment is so dissipated and diversified and distributed across the state that income distribution is almost natural. So in the case of apples as well. 

 

PM: So 1991, the Indian economy undergoes a big change. The years that follow, did that have any influence in Kashmir? And am I jumping too soon to 1991? Is there something that we need to talk about?

HD: No, you're right. The big landmark was 1991 for the rest of the country when you liberalise. But the tragedy is that that's when militancy was at its peak in J&K. So 89 militancy started in J&K and it would be impossible to look at it from any other perspective than that. And that actually was the last decade in J&K, which is where till then, the income per capita income was almost as much as the rest of the country. In fact, in many cases higher. All the numbers, if you look at it from the 90s, even today, 2015, 2017, every single number of the J&K economy has been better than the national average. Whether it is in terms of average age, income, childbirth, life expectancy at birth, all social indicators are much better, largely because of land reforms. Poverty levels are one fifth (1/5th) of what nationally is there. But because of the peculiar structure, it couldn't get into a self-sustaining mode of growth. 

In the 90s, we missed the bus, so to say, for liberalisation. Nobody would want to invest in that situation. Security was the biggest concern. There was huge expenditures happening, which caused a lot of distortions in the economy, including an asset price bubble. So you would see land as expensive in Kashmir, probably as expensive in Bombay. So the kind of distortion of the asset markets was phenomenal because there was a lot of money being pushed in for security, for all kinds of stuff, and it was finding its thing into land and other assets. Also, there were no other avenues for investment. So the long and short answer is yes, we did not get the benefits of economic liberalization. It was not the priority that time. It was the throes of a civil strife and military violence. So we tend to look at the 90s as a lost decade. 

 

PM: And then should we talk next about 2019? Or is there something that we are missing out in the in between years?
Because I remember I had come to Kashmir in 2009, and I had met a few entrepreneurs there and written about them. And what they had told me is that they were very willing. These were local Kashmiri entrepreneurs. They were very willing and ready for big investments, for instance, the dairy sector, the hospitality sector, cement manufacturing, et cetera.
And they were being encouraged by the Government of India to create an atmosphere of corporate investments-led economic change in Kashmir.
But ten years later, in April 2019, I visited the same set of Kashmiri entrepreneurs again. And they said that in the ten years, all those plans that they had, some of them had set up those factories in Bangalore or moved those business plans to Dubai, and they were yet again being encouraged to relook at their investment plans. But I didn't see the kind of excitement that I had in 2009. 

HD: So 2009, I was working with the government of J&K. I had a dual role. I was the economic advisor of the government of J&K and chairman of the J&K bank…

So we did some interesting work in 2008-2009 from the bank side, we funded a lot of local entrepreneurs who today are doing very well, in the state. Primarily, hospitality was a big area. Something like the Khyber Hotel is something we funded at that time... Young entrepreneurs… So I was betting on the young. So I had these seven young kids who had just come out because there was this upward social mobility. People had moved from being contractors to large projects, send their kids abroad. They'd come back with degrees from good colleges, good universities, and were trying to move up the business thing as well. So somebody's father was a contractor on the SALAL project, became an independent power producer. It was a delightful experience to kind of see that transition happen. All young people, they’re doing very well right now. They’ve diversified, they've got…. But purely local. Where the disappointment came—and since I had worked outside of J&K for many, many years—I personally met all the big corporates, took delegations, there was absolutely no response. There was no appetite for investments even then, and even I can say that even now. In fact, even for what was, what used to be amazing was J&K Bank was a listed stock, and we had 47% foreign investors. We didn’t have domestic mutual funds. So there was this unstated kind of a mental block against ….and in every sphere that I look at it.
For instance, even into the research, when I was talking to you earlier about the kind of fabulous land reform that took place, no Indian academic has done substantial work on it. You have tomes, and tomes, and tomes of stuff written on Kerala and West Bengal. But nobody has acknowledged the kind of significance of land reforms in India at that phase, or Panchayati Raj, for that matter. We started in the 1930s…

PM: You know, some of the entrepreneurs that I'd met in 2009 told me that they were facing a lot of problems finding the right local Kashmiri youth trained to do the jobs that required to be done. For instance, they said the Kashmir University has a course in finance MBA, which is not…..other than  J&K bank, which is not a great source of employment for the Kashmir economy. But they do not have a course in horticulture, for instance, which is probably more relevant for Kashmir's economy and…..
HD: Right, absolutely right. I mean, this is something that I used to shout from rooftops that, why am I not having an MBA in horticulture? And why don't I have MBA courses in craft management? In fact, as J&K bank, we funded courses and chairs in the thing saying, no, we'll fund a professor in horticulture management, then... that's precisely the kind of activity that should have happened. Because if you have a vibrant horticultural sector, if you have a vibrant tourism sector, if you have a vibrant craft sector, then let’s look at building skill sets within those enterprises rather than doing MBA in IT and finance, which really wasn't something that was there. It eventually perhaps may come there. But as of now, if 70% of your entire activity is around these three or four things, or 80%, then why not have that kind of skill built into it? Absolutely right. 

But that's aside the other problem. What I'm also saying is that for some reason Indian capital, corporates never reached out to J&K. If you broaden it and look at J&K economy as such, we had policies, industrial policy which gave land for 99 years lease and Jammu did develop a couple of industrial estates where you had corporates like Videocon and others who had come in to do assembly and avail of some of the taxation benefits. Post GST also we still have a 9%....the SGST is refunded by the state and so is 42% of the CGST. So there are things. But as always the infrastructure has been so poor that it's impossible to function a good industrial unit because power still is an issue. Electricity still is a huge issue. Connectivity is a huge issue. So it will be difficult to drive industrialization through tax incentives. 

PM: And the popular impression is that there wasn't permission for corporates from outside the state to buy land or operate. I remember you told me sometime back that none of those restrictions were
HD: Absolutely. 1929, the Maharaja issues an order which allows Clause three of that is very clear that any corporate doing any development…. I mean forget 1929. Even in the 1970s, 1980s, 1990s, 2000, you had Industrial policy which gave land on lease for 99 years. So where was the issue? How did Chenab Textile Mill set up its shop in 1964? Still one of the largest employees in J&K. How did the Oberoi chain of hotels come to J&K? I mean if there was a land restriction on land, how were these guys doing it? Because there was always a provision within the industrial policy, not just land—taxation, seed capital, capital subsidy, all kinds. 

In fact, I remember when I was finance minister, I presented to the cabinet a note which showed that for 25 years the amount of subsidy that the government of J&K plus government of India gave to industry was less than the total industrial output. Quite apart from being an accounting anomaly, it’s also ridiculous to say that I spent 100 crores trying to get investment— all I got was 80 crores.

PM: You said less. But I think you told me earlier too that the amount of subsidy was more than the output
HD: Subsidy was more than the output. So, I mean, I might have done a DBT and been done with it. Right. Why was I kind of spending this kind of money? So that also reflects the kind of anomaly. I mean, cement plants. Yes, because we have a buoyant cement industry in J&K. Largely it is resource based, so there is no raw material available. And limestone, high quality limestone is available. But the consequences of that on the ecology and economy of J&K have been quite damaging. So ideally, one would want a reset, which is more in line with today's thinking globally than what it was in the 70s and maybe the 50s

PM: The political leaders both in the state and at the center and the promise of the economy of Kashmir was not enough to change corporate mindsets in the rest of India to invest in Kashmir is what you're saying. 

HD: I have personal experience on this. I've taken all the industry leaders to J&K from the IT space, from other areas there was very little interest in….Perhaps the scale was too small for the big guys, I don't know. But also there was this whole issue, you know…. it’s a part of Kashmir, India, but not a part of India. So somewhere there was that whole issue of the disputed, quote unquote disputed tag on J&K till such time. Perhaps that was one reason why…. But I have never been able to understand the reluctance of corporate India to invest in J&K. 

PM: And did 2019 August…did anything change after that
HD:I have a slightly more granular view on it. I mean, perception wise, yes. I mean, obviously you've created a perception that it's been integrated. It was integrated in 1956, really speaking. And by 1961, Nehru makes a statement; so does the home minister of India at that point of time say that, you know, 370 is for all practical purposes over. But yes, Article 35A and then the splitting of the state into two parts, then having downgraded to a union territory—what it did was create a perception. And I keep reading that investment is coming. I haven't seen anything on the ground as of now. 

But there is one thing for sure, that the environment, the day-to-day environment, not the policy environment, the day-to-day environment, operationally speaking, is far better. You don't have stone pelting, you don't have hartals. So you have an auto driver who is sure that I have taken an auto on a loan. I'll be able to do my day's job and pay my EMI. So there is that security, without doubt, which is there... I was in Srinagar a week back. You can see that it's far more stable.
So a guy doesn't have to worry that if I go to my orchard, will, you know, stone in the middle or will they be Hartal? No. So that stability, which is providing an overall environment, not a policy environment, but pure operational environment to function, is certainly way better than it has been in the last ten years. 

PM: And what about the disputed tag, which was such a big cause for reluctance?
HD: I think that for sure has dissipated. And the kind of media and the civil society and government actions post the abrogation of 370 should not leave anybody in doubt in terms of the status of J&K. So my point has been that, not that it was there earlier, but it was a perception that you were looking at it from a different perspective, from investment purposes. And in fact, just before I was dropped from the cabinet, I had a big session with foreign investors and domestic investors in Delhi, where I in fact said that there is no legal restriction to your coming. And whatever else we are seeing are more on the social side, not really on the political side, but post 370 abrogation, that part should have settled the thing. But I still don't see people investing again. At the end of the day, you go back to the basics of why would you want to invest? I mean, yes, there is a certain national requirement, perhaps, but fundamentally businesses are driven by profitability. And if you have poor infrastructure, if you don't have state investing in infrastructure, which is critical infrastructure, then would investments flow to J&K? So perhaps… I had signed an MoU with Dubai World to do a dry port because our connectivity is very, very poor. But that didn't again materialize. So somewhere we are not seeing that quantum investment which will lift the state. 

 

PM: This is the constraint that the valley faces because it's landlocked and the only access to it is through the highway or the airport and the highway tends to get blocked. Is that what you're referring to?
HD: Even so, well, there is a major improvement in the highway connectivity also. We also have another road now. The train has reached. So there is that connectivity that's happening. But within the industrial estates itself, intrastate, interstate, yes the connectivity is poor. 

Obviously we're landlocked. We need to look at some of these mass initiatives like a dry port and some of that, plus information for products and all that, it is not a fully functional, robust economy where there is… you know, asymmetric information is huge there. So that's where you are really talking about the constraints on investment.

 The situation should look better. And we keep hearing. I don't have any information on actual is there. But we keep hearing investments have come—30,000 crores, 40,000 crores, 2000 crores. But I haven't seen a quantum thing that, look, this has now come up and this is a major initiative. 

In fact, Jammu also, which has a large SME sector, has not been doing too well in the last couple of years. Of course, Covid must have had a huge impact itself, but I don't see the thing. But I'm also in some ways happy because if that investment comes into the areas like steel, cement and whatever, then perhaps it would not be in the long term interest. So one needs to reset the thing to look at it from the perspective of sustainable investments, new energy sources. We have a huge potential of geothermal, this huge hydro potential which are new age kinds of sectors. Perhaps a focus on that would be ideal. 

PM: Spring water and tourism, of course.
HD: Oh yes, of course. A whole lot of stuff. Food. I mean the kind of food that perhaps if a Master Chef can transform Australia's tourism business, I'm sure something similar would be very transformative in J&K. But what I find most remarkable and I've not been able to kind of get my head around it is—visually speaking, the number of shops that Kashmir has…per capita must be the highest in the world. For every 2ft you have a shop. You know, that whole tertiary trade is just booming and I can't figure out how that has happened. 

So many years back I had written a piece: for the economy of Kashmir is about Makan, because everybody constructs houses, huge ones; Dukan and Wazwan. These are the three things that… Wazwan, of course, the feast. So I said, this economy is driven by these three things. So you have huge construction, which has big spinoffs in terms of employment generation, labour, material intensity is very high, so you get multiplier incomes. The problem is that since most of it is imported, the multiplier gets active outside of J&K and not within the J&K. And that is quite tragic because if you're able to capture the missing multiplier, as it were— like you know the Kashmiris are known to consume mutton. The entire thing comes from Rajasthan, chicken comes from Punjab. So the multiplier effects benefit those states… are then in this case. But again, I saw a lot of prominence… One of the reasons why we did that was to sign off on GST, because that time we had the right, we had our own constitution. We could have very easily done it under our own act. But because we are a consuming state, GST tends to benefit that. So the resources are much better now. It is not like the earlier regime where production states would benefit. So you find that we are getting a lot of tax incomes, which would probably strengthen our own resource base. And we also need to realign that. I remember when we first went in, we were taxing exports, apple exports, and like quite bizarre. Why are you taxing the most… So we withdrew that tax. We abolished the Octroi on apples and stuff. So that also led to a certain generation of income within the state. 

 

Interviewer: So politically and security wise issues largely settled, you're saying. If the infrastructure problem could be resolved, do you think there'll be more corporate interest in Kashmir from the rest of India and probably the rest of the world?
HD: For sure. Political insecurity should have been now addressed. If you were to ask me do I want corporate investments?  Can we first corporatize these sectors? So the problem really is that you have a horticulture sector, which is informal, which is unorganized, which is still functioning in the same way in which it functioned in the 1940s. You have a forwarding agent, you have a Mandi in Delhi, you will send fruit. Then you have no control over it. There is a glut at a particular point of time. There is no storage. But what has happened over the last 10-15 years is a huge amount of investment in agriculture infrastructure, horticulture. Largely private, not government. All CA stores have come. So you store apples. Earlier... My father is himself an orchardist. All his life he used to send his apples to Delhi in a store. Now there were issues of cost and all that on it. You had no control over it. But now that there are those storages which have come, which have come CA stores in J&K, you can store in J&K, so the multiplier also gets addressed there. You can exit at will, you can store it till January, avoid the gluts, get better price realization. So we need to strengthen the sectors that are vibrant and growing, rather than chase the sectors which are not there. 

So if you were to look at horticulture, you can start doing risk mitigation by doing futures and options in the markets. You can do information technology based xxxxx on that, on disease patterns, on management of pesticides, fertilizer, water conservation, and also corporatise the entire formation of an orchard. Now all orchards in J&K, to my mind, now are anywhere above 80 years old. So they're not going to have the same yield. So when you look at our yields, despite the fact that we are the 6th largest, in such a small area, our yield is 10 to 15 tons per hectare. The global average is 40. You go from 10 to 20, you have sorted the problem of J&K forever. So that's where the…it is  just so simple that I don't know why one has not been able to actually convert this into a very operational policy. 

So if you create small branding units, you create packaging units. I had started an initiative called Apple Village, which the government was kind of giving 50% subsidy and say you convert to high density, which is still there…you convert this into high density and we'll give you for five villages six villages, one branding unit and some of that so it becomes more like a gentleman farmer— so you can have an MBA horticulture, who runs your farm and stuff like that. So you will then see once that is there then corporate interests will come in.. because you will see an established form. You look at a balance sheet, you look at what is my EBITDA, what is my PAT, you look at the normal kind of stuff that happens in any enterprise and then you can look at investors and say look this is my thing. Year returns I give, I have fabulous returns, 25% to 40%. Why don't you invest?
Now we are doing it the other way around. But that's not how it it ought to be. That's the broad thrust of what I've been saying for a few years.

PM: For our end, I want you to tell us about this company you're mentoring and its found foreign investors and probably how it encourages the rest of young investors in Kashmir. 

HD: Yeah, as I said during the phase of my, when I was the bank we had put together a bunch of seven young kids who've done—one was in hospitality, one was in power, one was in horticulture, one was in spices— these bunch of youngsters, that's the investment that really has happened over the last 10-15 years and has fructified. So you can see some of those investments are very much flourishing. So one of those was with horticulture. It's a young gentleman from Shopian who set up his orchard installation company and he installs high density orchards and has a CA store, it's more an integrated unit, does a bit of IT in terms of trying to provide diagnostics to various farmers and he's already worked with 10,000 farmers. He has converted a whole lot of orchards into high density orchards. So it's become one of these drivers of things… and not really in terms of any government support but generally working in the private sector funded by the J&K Bank.
And so he reached a certain scale when it was looking that one should try with not just debt but also explore the options of private equity. You're not really at public markets… so you're looking at private markets. And he reached out to quite a few funds across. It was a very difficult job because again the due diligence requires such a thing which a startup doesn't have. So all of that was quite long and arduous but InCofin, which is I think a Danish Impact Fund, did invest 60 crores, value the company at around 400 crores, which was wonderful because it just sets off a different thing in J&K. First of all, it gives a huge confidence to every orchard. Is that something I can do? Do asset monetization, raise private equity, raise growth capital, grow bigger. And also more important for me was not so much that the money came. Yes, that's very critical. But what will it do to the enterprise? You'll get into governance. You'll get into a board. You will start looking at various options. Risk mitigation. So you will evolve as a company. 

Now as a policymaker my whole effort would be to let these companies evolve from being in school to being in the university and college and then go right. So you start up in the school because you don't have.. all the companies in J&K are stunted. Around 400-500 crore. So it hasn't reached the second level. The only listed company out of J&K is J&K Bank. So the point being…that can you.
So the one more Jammu company which at some point I'd helped out did list in a smaller exchange has done very well given 1200% returns—Sarveshwar. So there are these pockets of good excellence which need to be tracked. And since they are not in public markets, private equity. 

So I think you will now see there have been some small, small private equity investments in the logistics space in Kashmir. I see some 10-12 crores. But this was a large ticket and into horticulture. So a fabulous development which should open up this whole area and perhaps bypass some of this whole fetish that we have with corporates, corporates, corporates. 

If you see these funds and there are now a whole lot of private equity players who are investing so much in the rest of the country can invest in these businesses… That perhaps is the route to follow. And then subsequently they will handhold them to the next level where perhaps the exit option could be a listing in five years from now, seven years from now. Who knows? 

So we are quite delighted to see that happen. And absolutely wonderful for Khuram who has done a great job in setting this up. Has pretty much employs 2000 people and has been there on the field for 15-16 years now.