Besides, it suggested establishment of Special Economic and Industrial Zones and Public Private Partnership (PPP) projects to make the state economically and financially self-dependent.
"The topography of the state is such that it hardly allows for raising resources, physical and financial, for adequate investment in infrastructure and other socio-economic activities...
"All in all, the state is not only heavily dependent on the Centre for financial and other material resources but is also unable to fully utilise the available funds," the report said.
The report said the overall investments are much below the volume needed for improving infrastructure and quality of human resources.
"The entire gamut of fiscal management, including mobilisation of internal resources, should, therefore, be urgently examined with a view to reconciling the concepts of political and economic components of the new compact," it said adding to "promote cross-LOC cooperation in areas of common interest and concern."
The report quoted former Prime Minister and senior BJP leader Atal Bihari Vajpayee's remark that 'Jammu aur Kashmir ko insaniyat ke daire mein dekhna hai' (look Jammu and Kashmir under the ambit of humanity) and suggested adoption of the best practices of other states for promotion of socio-economic activities under public-private partnership mode.
It recommended creation of SEZs for promotion of the industry, which should be extended financial and fiscal incentives on the pattern of the North Eastern States and to provide attractive export incentives for promotion of Kashmiri handicrafts, explore exploitation of minerals and other natural resources.
