Jammu & Kashmir is, possibly, the first Union Territory (UT) or State in the country to convert its Forest Corporation into a registered, public sector undertaking with a share capital of ₹10 crore.
J&K Lt. Governor G.C. Murmu on June 6 sanctioned the creation of the J&K Forest Development Corporation (J&K FDC) as a registered company to replace the J&K State Forest Corporation (J&K SFC) after the passage of the J&K Reorganisation Act, 2020, that created the UTs of J&K and Ladakh.
Previously, the J&KSFC was tasked to “undertake removal and disposal of trees and exploitation of forest resources entrusted to it by the Government” as per the old website that is still available online. It was also mandated to “manage, maintain and develop such forests as are transferred and entrusted to it by the Government till these are handed back to the Government”.
The share capital of ₹10 crore, divided into one lakh equity shares worth ₹1000 each, has been earmarked under the Companies Act, 2013, an official order of June 22, seen by The Hindu, said.
“All the shares except two shall be held by the Lieutenant Governor. One share each shall be held by the Administrative Secretary of the Department of Forest, Ecology and Environment and the Administrative Secretary of the Finance Department,” the order said.
Board of bureaucrats
The Board of Directors of J&K FDC will comprise of the Administrative Secretary of the Department of Forests, Ecology and Environment as its chairman, five directors — including the administrative secretaries of Finance, Tribal Affairs, Industries and Commerce, Rural Development, and Principal Conservator of Forests, J&K — and Managing Director J&KFDC as its member secretary.
Former J&K finance minister and economist Haseeb Drabu said the erstwhile corporation has been moved from a department undertaking to a non-department undertaking, with implications on its budget allocation, resources and resource use.
“It has to be a profit making corporation now and could impact employment generation. It can now divest up to 49% shares. The impact of this on the forest policy is to be assessed. Is it a move towards changing the use of forest land? This is something that will emerge when more details are public,” Mr. Drabu said.
Former Union minister of environment and forests and Congress MP Jairam Ramesh described the move as baffling. “I am unable to understand the logic behind this move. I have tried to understand it given my long years of association with J&K but have failed,” Mr. Ramesh said.
A retired Chief Forest Conservator (CFC), J&K, who preferred to remain anonymous, warned that if people from outside J&K were allowed to buy shares in the J&Kfuture, it would impact the local economy.