According to the National Sample Survey Organisation report, an average household in the state owned assets worth Rs 10.67 lakh, which is the highest in the country. Also, the state has the lowest poverty rate of 3.4 per cent - against the national average of 26 per cent.
The report, the first in a series of five reports to be brought out on the basis of the data of All-India Debt and Investment Survey, says the state has the lowest indebtedness - 4 per cent - as well.
The good showing has come despite the fact that the tourism industry in the state - often believed to be the Valley's backbone - has been in a bad shape under the pressure of militancy.
But Dr Nisar Ali, head of economics department, Kashmir University, says "tourism has never been the mainstay of our economy". "Hardly 4 per cent of the population depend on tourism directly or indirectly."
Ali and other experts like Dr Ghulam Sarwar Naqash, director horticulture department, say the state economy depends on horticulture, agriculture and handicrafts. "Around 85% people are directly involved in these sectors," says Ali.
Naqash says, "Horticulture production has witnessed a boom, and we are currently producing 14 lakh metric tons of fresh and dry fruit. Before 1989, we used to produce 5.63 metric tons." He claims the state earns Rs 1,900 crore revenue every year from this sector alone.
Ali says grants and assistance from the Union government have also helped. Official figures say that since the beginning of militancy in 1990, the state has received Rs 35,571.3 crore in grants from central resources.
Experts say that the vacuum created in business and employment fields due to the migration of Kashmiri Pandits came as an opportunity for others to fill in.
But the official per capita income of J&K is around Rs 16,000, which is lower than the national average of Rs 23,000. The literacy level in the state is 64.8 per cent, against the national rate of 65.4 per cent.