Militancy: How the Kashmir Valley calculates its notional economic losses

Jul 13, 2016 10:17 PM IST

The common agenda of the ruling combine in Jammu and Kashmir hinges on tourism and urban development, which cannot take off without lasting peace

Ever since militancy began in Kashmir in the early 1990s, very seldom did scholarly discussion move outside the familiar fields: the history of Jammu and Kashmir and its accession to India in 1947, the special position of the state in the Constitution, the relationship between Jawaharlal Nehru and Sheikh Abdullah, the distance between the erstwhile Dogra ruling family of the State and its subjects, failure to develop democracy at the grassroots, etc. The economy did enter the discourse but only fitfully as if it were just adjunct of the main course of events. Now, with an elected government being there, some healing touch was expected to be provided. The common minimum programme that the two ruling parties, the BJP and the PDP, drew up had a strong economic component to it. But unfortunately, with unabated infiltration from across the border for the past six months, leading to repeated attacks on the security forces, and the disturbances and shutdown following the killing of the Hizbul Mujahideen commander, the state’s economy again seems to be headed towards an uncharted path.

Srinagar:Policemen patrols during curfew in Srinagar(HT)
Srinagar:Policemen patrols during curfew in Srinagar(HT)

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What have the repercussions on the economy of the state because of infiltrations and the shutdown over the past four days? No principal industry chamber such as the CII, Assocham or Ficci has attempted a calculation so far. Nor has the Kashmir Chamber of Commerce and Industries, which says its principal concern is now with the lives lost.

Assocham had estimated in 2014 because of the floods in the state, the state’s economy suffered an immediate loss of Rs 5,400-5,700 crore, with the maximum damage caused to trade, hotels, restaurants, horticulture and handicrafts. But with the shutdown this time, the bite will be felt largely in the tourism sector, which had been on the uptick since the gory summer of 2010, when about 120 young people had died in encounters with the security forces. And in 2013, with 26 days of curfew in the valley following the hanging of Afzal Guru in February, the tourism industry had pegged the loss at an estimated Rs 4,500 crore.

The worst part is that tourists may now stop coming after having booked the rooms. Rooms in Kashmir are usually booked from May 25 to June 25. If the demand is good, people in areas around Dal Lake rent rooms to tourists, and in many cases even floors.

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Extremist activities followed by shutdowns do not bode well for the new vision of the state that the two ruling parties have crafted. The common manifesto of the BJP and PDP has a lot that hinges on tourism, which, in turn, depends on urban development. It intends to develop Jammu as an independent tourism circuit, in addition to rebuilding ‘Shehr-e-Khas as a heritage destination by dovetailing craft, heritage and tourism’. Dal Lake is supposed to become ‘a world heritage site’. The state also wants to develop two mega cities in the shape Greater Srinagar and Greater Jammu. Each of the two would have New Jammu and New Srinagar as satellites. Finally, it also wishes to upgrade ‘all towns with population size class of 30,000 to 99,999 to cities’.

According to the Sixth Economic Census of 2013, there are 507,372 establishments in J&K. Of those 40%, comprising handloom and handicrafts, are in urban areas. We have to wait for more information from government and industry sources to know how militancy has affected them.

Jammu and Kashmir is a special-category status state that gets 90% of normal plan assistance in the form of grants against just 30% in the case of general-category states. But the state must create enough revenue-generating sources, which can come only from sustained peace. But with peace constantly eluding the valley, are the goals given in the ‘Agenda for Governance’ realisable within, say, 25 years? I rest my case.


    Uddalok Bhattacharya was part of Hindustan Times’ nationwide network of correspondents that brings news, analysis and information to its readers. He no longer works with the Hindustan Times.

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