Jammu & Kashmir Economy: Key Questions & Answers
This guide covers essential questions about the economic structure, key sectors, and development policies of the Union Territory of Jammu and Kashmir. The content is structured for clarity and better understanding.
Q1. Largest Contributor to J&K’s Gross State Domestic Product (GSDP)
Which sector contributes the largest share to the Gross State Domestic Product (GSDP) of Jammu and Kashmir UT?
- (a) Agriculture and allied activities
- (b) Manufacturing
- (c) Services
- (d) Mining and quarrying
Answer: (c) Services
Explanation: The services sector, comprising tourism, trade, transport, communication, banking, and public administration, accounts for the highest proportion of J&K’s GSDP. This reflects the UT’s economic shift from agrarian to service-based.
Q2. Focus of Horticulture Development Programme
The Horticulture Development Programme in J&K primarily focuses on which crops?
- (a) Wheat and rice
- (b) Apple and walnut
- (c) Cotton and sugarcane
- (d) Pulses and oilseeds
Answer: (b) Apple and walnut
Explanation: Jammu and Kashmir’s horticulture thrust is on high-value temperate fruits like apple, walnut, almond, and cherry. These are major export commodities and a key source of farmer income.
Q3. Correct Statement on Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)
Which statement about the “Pradhan Mantri Krishi Sinchayee Yojana (PMKSY)” in J&K is correct?
- (a) It aims to provide 100% irrigation coverage to all cultivable land by 2025.
- (b) It is exclusively for the Kashmir Valley and excludes Jammu region.
- (c) It promotes micro‑irrigation and watershed development.
- (d) It provides direct cash subsidies for purchasing tractors.
Answer: (c) It promotes micro‑irrigation and watershed development.
Explanation: PMKSY in J&K emphasizes micro‑irrigation (drip and sprinkler), watershed management, and improving water use efficiency, rather than full surface irrigation or tractor subsidies.
Q4. Nationalisation of Jammu and Kashmir Bank
The “Jammu and Kashmir Bank” was nationalised in which year?
- (a) 1969
- (b) 1980
- (c) 1991
- (d) It remains a private sector bank.
Answer: (d) It remains a private sector bank.
Explanation: Jammu and Kashmir Bank Ltd. continues to be a scheduled commercial bank in the private sector. It was never nationalised, although the Government of J&K holds a significant stake.
Q5. Reason for Low Industrial Growth in J&K
What is the main reason for J&K’s relatively low industrial growth compared to other Indian states?
- (a) Lack of skilled labour
- (b) Inadequate power infrastructure
- (c) Geopolitical instability and difficult terrain
- (d) Absence of mineral resources
Answer: (c) Geopolitical instability and difficult terrain
Explanation: Frequent disturbances, security concerns, and the mountainous terrain deter large‑scale industrial investment, making geopolitical factors the primary constraint.
Q6. Impact of Udhampur‑Srinagar‑Baramulla Rail Link (USBRL)
The USBRL project is expected to boost the UT’s economy mainly by:
- (a) Increasing hydroelectric power generation
- (b) Improving connectivity and facilitating tourism and trade
- (c) Expanding mining operations in the Pir Panjal range
- (d) Providing direct employment to over 1 lakh youth in agriculture
Answer: (b) Improving connectivity and facilitating tourism and trade
Explanation: The USBRL will integrate the Kashmir Valley with the rest of India, reducing travel time, cutting logistics costs, and stimulating tourism, hospitality, and related service sectors.
Q7. Highest Export Earnings Commodity
Which commodity accounts for the highest export earnings from J&K UT?
- (a) Saffron
- (b) Handicrafts (carpets, shawls)
- (c) Apple
- (d) Timber
Answer: (c) Apple
Explanation: Fresh and processed apple is the leading agricultural export from J&K, contributing significantly to foreign exchange earnings, surpassing handicrafts and saffron in volume and value.
Q8. Target of Jammu and Kashmir Rural Livelihoods Mission (JKRLM)
The “Jammu and Kashmir Rural Livelihoods Mission (JKRLM)” primarily targets:
- (a) Urban slum redevelopment
- (b) Skill development for IT professionals
- (c) Women’s self‑help groups and farm‑based livelihoods
- (d) Construction of highways in Ladakh
Answer: (c) Women’s self‑help groups and farm‑based livelihoods
Explanation: JKRLM focuses on mobilising rural women into self‑help groups, promoting agro‑based enterprises, skill training, and access to credit to enhance household incomes.
Q9. Largest Share of UT’s Annual Budget Allocation
Which sector receives the largest share of the UT’s annual budget allocation?
- (a) Defence and security
- (b) Education
- (c) Health and family welfare
- (d) Infrastructure (roads, bridges, power)
Answer: (d) Infrastructure (roads, bridges, power)
Explanation: A substantial portion of J&K’s budget is earmarked for infrastructure development—roads, bridges, electrification, and hydropower—to overcome geographical constraints and spur economic activity.
Q10. Per Capita Net State Domestic Product (NSDP)
As per the latest available data, the per capita Net State Domestic Product (NSDP) of J&K UT is approximately:
- (a) ₹ 45,000
- (b) ₹ 78,000
- (c) ₹ 1,20,000
- (d) ₹ 2,00,000
Answer: (b) ₹ 78,000
Explanation: J&K’s per capita NSDP hovers around ₹ 75,000–₹ 80,000, reflecting a moderate level of economic development compared to the national average.
Q11. Focus of Pradhan Mantri Matsya Sampada Yojana (PMMSY) in J&K
Which statement about the “Pradhan Mantri Matsya Sampada Yojana (PMMSY)” in J&K is true?
- (a) It focuses only on marine fisheries along the coastline.
- (b) It promotes inland fisheries, trout farming and cold‑water aquaculture in the UT.
- (c) It provides subsidies for deep‑sea fishing vessels.
- (d) It is not applicable to J&K due to lack of water bodies.
Answer: (b) It promotes inland fisheries, trout farming and cold‑water aquaculture in the UT.
Explanation: PMMSY in J&K emphasizes inland fisheries, especially trout farming in the Kashmir Valley and cold‑water aquaculture in high‑altitude lakes and rivers.
Q12. Incentives in J&K Industrial Policy 2021
The “Jammu and Kashmir Industrial Policy 2021” offers which of the following incentives to attract investment?
- (a) 100% exemption from income tax for 10 years
- (b) Capital subsidy, interest subsidy and GST reimbursement for eligible units
- (c) Free land allocation in all districts
- (d) Mandatory reservation of 50% jobs for outsiders
Answer: (b) Capital subsidy, interest subsidy and GST reimbursement for eligible units
Explanation: The policy provides fiscal incentives such as capital subsidy (up to 30% of plant cost), interest subsidy on term loans, and GST reimbursement to encourage industrial units, especially in food processing, handicrafts, and tourism.
Q13. NOT a Major Source of Non‑Tax Revenue
Which of the following is NOT a major source of non‑tax revenue for the J&K UT government?
- (a) Royalties from minerals
- (b) Income from tourism department (entry fees, permits)
- (c) Dividends from public sector undertakings
- (d) Revenue from Goods and Services Tax (GST)
Answer: (d) Revenue from Goods and Services Tax (GST)
Explanation: GST is a tax revenue head shared between the centre and states. Non‑tax revenue includes royalties, dividends, interest, and fees from services like tourism and forestry.
Q14. Source of Kashmir Willow for Cricket Bats
The “Kashmir Willow” used for making cricket bats is primarily sourced from which region of J&K?
- (a) Ladakh
- (b) Jammu region
- (c) Kashmir Valley (especially Anantnag, Pulwama)
- (d) Pir Panjal foothills
Answer: (c) Kashmir Valley (especially Anantnag, Pulwama)
Explanation: High‑grade Kashmir willow (Salix alba var. caerulea) grows abundantly in the Kashmir Valley districts of Anantnag, Pulwama, and Baramulla, supplying the raw material for premium cricket bats.
Q15. Skill Training Scheme Under “Skill India”
Which scheme aims to provide skill training to youth in J&K under the “Skill India” initiative?
- (a) UDAAN
- (b) SVAMITVA
- (c) AYUSHMAN Bharat
- (d) Pradhan Mantri Awas Yojana
Answer: (a) UDAAN
Explanation: UDAAN (Underprivileged Youth Development and Advancement Programme) is a special industry‑linked skill training scheme for J&K youth, focusing on placements in corporate sectors.
Q16. Emphasis of J&K Tourism Policy 2020
The “Jammu and Kashmir Tourism Policy 2020” emphasizes which type of tourism to diversify the sector?
- (a) Only religious tourism
- (b) Adventure, wellness and eco‑tourism
- (c) Space tourism
- (d) Industrial tourism
Answer: (b) Adventure, wellness and eco‑tourism
Explanation: The policy promotes adventure tourism (trekking, skiing), wellness (Ayurveda, spas), and eco‑tourism (homestays, wildlife) to reduce over‑reliance on traditional pilgrimage and sightseeing.
Q17. Correct Statement on Hydropower Potential
Which statement about the “Hydropower potential” of J&K is correct?
- (a) J&K has negligible hydropower potential due to low rainfall.
- (b) The UT’s economically exploitable hydropower potential is estimated at over 20,000 MW.
- (c) All hydropower projects in J&K are owned by private companies.
- (d) Hydropower contributes less than 5% to the UT’s electricity supply.
Answer: (b) The UT’s economically exploitable hydropower potential is estimated at over 20,000 MW.
Explanation: Studies estimate J&K’s economically viable hydroelectric potential at around 20,000 MW, of which a significant fraction remains untapped, offering a major avenue for revenue and employment.
Q18. Priority of J&K Food Processing Policy
The “Jammu and Kashmir Food Processing Policy” gives priority to which of the following sectors?
- (a) Textile manufacturing
- (b) Meat and poultry processing
- (c) Fruit processing (apple, walnut, apricot) and mushroom cultivation
- (d) Cement production
Answer: (c) Fruit processing (apple, walnut, apricot) and mushroom cultivation
Explanation: The policy incentivizes processing of horticultural produce (apple, walnut, apricot, cherry) and high‑value crops like mushrooms, aiming to reduce post‑harvest losses and increase value addition.
Q19. Major Challenge for the Handicrafts Sector
Which of the following is a major challenge faced by the handicrafts sector in J&K?
- (a) Excessive government subsidies leading to market distortion
- (b) Lack of raw material availability
- (c) Counterfeit products and declining demand in domestic and international markets
- (d) Over‑automation reducing employment opportunities
Answer: (c) Counterfeit products and declining demand in domestic and international markets
Explanation: The handicrafts industry suffers from imitation goods, insufficient branding, fluctuating export demand, and limited access to modern design, affecting artisans’ incomes.
Q20. Funding for J&K Rural Road Connectivity
The “Jammu and Kashmir Rural Road Connectivity Programme” is
