Jammu and Kashmir - Economy
The state is affected by continued violence and insurgency, the economy of Jammu and Kashmir is an undeveloped one. Unaffected and unaltered by modern day industrial developments and changing times, the indigenous traditional occupations of farming, animal husbandry and horticulture forms the backbone of the economy.
When India suddenly scrapped disputed Kashmir's semi-autonomous status, followed by an unprecedented security clampdown, economic ruin ensued. Days before the August 5, 2019, decision by India's central government, authorities asked hundreds of thousands of tourists, Hindu pilgrims and migrant workers to leave the territory, shutting its economy. Since then, tens of thousands of jobs have been lost. The Kashmir Chamber of Commerce and Industries pegged the economic losses in the region at $5.3bn by August 2020 and said about half a million jobs had been lost since August 2019.
Jammu and Kashmir's economy is predominantly dependent on agriculture and allied activities. The Kashmir valley is also known for its sericulture and cold-water fisheries. Wood from Kashmir is used to make high-quality cricket bats, popularly known as Kashmir Willow. Kashmiri saffron is also very famous and brings the state a handsome amount of foreign exchange. Agricultural exports from Jammu and Kashmir include apples, barley, cherries, corn, millet, oranges, rice, peaches, pears, saffron, sorghum, vegetables, and wheat, while manufactured exports include handicrafts, rugs, and shawls.
Rice, maize and wheat are the major cereals of J&K. The Basmati rice of RS Pora Tehsil of district Jammu is world famous for its taste and aroma. J&K is largest producer of Apple, Walnut, Almond and many other temperate dry and fresh fruits. J&K holds number one position in saffron production in India. J&K is a major exporter of superior quality carpets, wooden art, embroiderical clothes and many other valuable crafts.
Jammu city is the main cultural and economic center of the administrative division of Jammu. The city has a number of small industries. Jammu has a number of woodgrain mills to cater to the local population. One of the most famous local Basmati Rice is produced in RS Pura area near jammu, which is then processed in rice mills in Jammu. Apart from Rice Mills scattered all around Jammu, industrial estate at Bari Brahamna has a large presence of Industrial units manufacturing a variety of products right from carpets, electronic goods, electric goods etc. The local government gives incentives for new units by foregoing taxes for a few initial years of establishment. Bari Brahamna also has a freight rail link that helps carry the goods manufactured here to other parts of India.
Horticulture plays a vital role in the economic development of the state. With an annual turnover of over Rs. 300 crore, apart from foreign exchange of over Rs. 80 crore, this sector is the next biggest source of income in the state’s economy. The region of Kashmir is known for its horticulture industry and is the wealthiest region in the state. Horticultural produce from the state includes apples, apricots, cherries, pears, plums, almonds and walnuts.
The Doda district has deposits of high-grade sapphire. Though small, the manufacturing and services sector is growing rapidly, especially in the Jammu division. In recent years, several consumer goods companies have opened manufacturing units in the region. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has identified several industrial sectors which can attract investment in the state, and accordingly, it is working with the union and the state government to set up industrial parks and special economic zones. In the fiscal year 2005–06, exports from the state amounted to Rs. 1,150 crore. However, industrial development in the state faces several major constraints including extreme mountainous landscape and power shortage.
The state of Jammu and Kashmir located far away from the market, and the major raw material source base, has historically remained isolated from the major industrial development action happening in the plains. The geographical isolation has restricted state’s industrial activity to a selected few sectors in which it either had impressive expertise or had raw material locally available. At one point of time, forests were the main wealthmaking resources till the sector was nationalised and new conservation norms took over.
Historically, most of the manufacturing activity in the state has remained restricted to the state’s inherent capacities in agriculture and handicrafts. Both the areas remained, and partly still are, restricted to unorganised cottage sector. This has helped the non local corporate houses in respective sectors gradually takeover.
The fall of various local dairy products and their takeover by the branded products from the plains and the takeover by Punjab machine made products of the heritage handicrafts sector triggered crises for the local unorganised sector. Jammu and Kashmir has 3 million cattle, 1 million buffaloes in milk producing 1.4 million tonnes of milk annually. Besides, 5.6 million poultry are contributing 63.2 million eggs per annum. Small ruminants comprising 3.4 million sheep and 2 million goats also contribute significantly to the total livestock population of the state. The state also has about 47,000 yaks.
In 2016, the state government for the first time, revisited the twin incentive packages and created a comprehensive new policy. The scene on the jobs front has not been very impressive. When the central package was announced, the main focus was that, new investments will reduce the joblessness. But it did not help much because the industry said it is not getting the people with the requisite skill sets that it requires. The Government of India has been keen to economically integrate Jammu and Kashmir with the rest of India. The state is one of the largest recipients of grants from New Delhi, totaling $ 812 million per year. It also has a mere 4% incidence of poverty, one of the lowest in the country. The per capita income during 2017-18 at constant 2011-12 prices (NSDP) is estimated at Rs.65615 while the per capita income of Rs. 61349 was registered in financial year 2016-17. The per capita income during 2017-18 at current prices is estimated at Rs. 86108 while per capita income during 2016-17 stood at Rs. 77918 at current Prices. The projected per capita income at current and constant 2011-12 prices for the year 2018-19 are roughly estimated at Rs. 94992 and Rs.69221 respectively.
In an attempt to improve the infrastructure in the state, the Indian government has commenced work on the ambitious Kashmir Railway project which is being constructed by Konkan Railway Corporation and IRCON at a cost of more than US$2.5 billion. The Jammu & Kashmir Bank, which is listed as a S&P CNX 500 conglomerate, is based in the state. It reported a net profit of Rs. 598 million in 2008.
Before insurgency intensified in 1989, tourism formed an important part of the Kashmiri economy. The tourism economy in the Kashmir valley was worst hit. However, the holy shrines of Jammu and the Buddhist monasteries of Ladakh continue to remain popular pilgrimage and tourism destinations. Every year, thousands of Hindu pilgrims visit holy shrines of Vaishno Devi and Amarnath which has had significant impact on the state's economy. The Vaishno Devi yatra alone contributes Rs. 475 crore to the local economy annually.
Tourism in the Kashmir valley has rebounded in recent years and in 2009, the state became one of the top tourist destinations of India.[70] Gulmarg, one of the most popular ski resort destinations in India, is also home to the world's highest green golf course. However with the decrease in violence in the state has boosted the states economy specifically tourism.
As reported by the Government of Jammu and Kashmir, the agriculture operations are going on smoothly in the valley. During FY 2019-20 (upto January, 2020), 18.34 lakh MTs of fresh fruit (apples) have been dispatched. In the horticulture sector, under the Market Intervention Schemes (MIS) launched by the Government of India in September 2019, for the first time, 15769.38 MTs of apples valued at Rs. 70.45 crores have been procured up to 28th January 2020, directly from the growers in Kashmir valley through National Agriculture Marketing Federation of India (NAFED). This scheme has been extended up to 31st March, 2020. The sericulture sector recorded a production of 813 MTs of silk cocoon in the year 2019. During the 1st three quarters of FY 2019-20, handicrafts worth Rs. 688.26 crores were exported. Various tourism promotional campaigns have also been launched.
Government of Jammu and Kashmir informed that as per the Periodic Labour Force Survey, last conducted for FY 2017-18, by the Ministry of Statistics and Programme Implementation of Government of India, the worker-population ratio for persons in the age group of 15 years and above for Jammu and Kashmir is 51%.
The Vice President of India, Shri M. Venkaiah Naidu asserted 10 September 2019 that the dilution of Article 370 would accelerate the process of development in the Union Territories of Jammu & Kashmir and Ladakh by paving the way for extension of various schemes and legislations, including 73rd and 74th Constitutional Amendments to strengthen the funds and functions of local bodies.
|
NEWSLETTER
|
| Join the GlobalSecurity.org mailing list |
|
|
|
