Kashmir’s Bleeding Economy!

(The uncertain situation for last few years is making already fragile Kashmir economy to bleed without any redressal in sight!)

The founder of the Ziraat Times, Arjimand Hussain Talib in a recent post on the Facebook while highlighting the problems faced by the trade in Kashmir has observed,Kashmir’s economy is dying silently, with far-reaching long term negative impacts.It is high time regional political parties, business groups and civil society initiate a coordinated and effective action. Strikes will only inflict self-harm. A collective response has to be politically sophisticated and result oriented too”. But the moot point is why is Kashmir economy dying? Because it has been slowly made to bleed to death! The bleeding started immediately after Kashmir’s first Prime Minister Sheikh Mohammad Abdullah was unceremoniously removed and imprisoned in 1953 to enable Kashmir’s total merger and integration. The subsidy culture of fifties introduced by Bakshi Ghulam Mohammad was the first wound given to the local self-sufficient economy at least in food related items.

There are no two opinions that the agriculture has always been the real backbone of Kashmiris economy for centuries. Even at present the 80% of the population consists of cultivators. Unfortunately, over the years instead of progressing this sector has been rather dwindling and we are at a juncture when we depend on imports for most of our agriculture based products!While on one hand most of the agricultural products and the people engaged in producing these have been declining over a period of time, on the other the only thing which has grown geometrically are the government employees! A sizeable chunk of the State budget goes into the salaries of these employees. Unfortunately, over a period of time we have depleted slowly the dignity of manual labour and created a mind-set of white collar jobs among our youth. According to some estimates almost a million youth are educated but unemployed. Most are waiting for the white-collar government jobs even at the lowest level. This is the greatest disservice that has been done to our society by our rulers for last 70 years or so! This mentality has to change.

The other unproductive expenditure specially incurred by NRIs (Non-resident Kashmiris) is the construction boom in bungalows and villas. Over past few years a hundred thousand posh houses worth thousands of crores must have been constructed by our Non-resident fellow Kashmiris spread all over the world in the entire valley with Srinagar topping the list. This is totally dead investment. Those people hardly use these villas and houses. May be they use these at the most for a month or so when they visit Kashmir if it is peaceful. Almost eleven months in a year these are occupied by watchmen looking after these! The same money could have been invested in various local enterprises especially in agriculture based industries.

Tourism has been wrongly propagated as the backbone of the economy even though it forms not more than 7% of the GDP! Yes, if things were peaceful and Kashmir had year round direct international air access, Kashmir would have become another Switzerland. Again the massive investment in this sector has become dead investment due to uncertain and disturbed situation which does not appear to improve in the near future. Moreover, because of total dependence on imports regarding various inputs in the sector, Tourism does not have a multiplier effect in Kashmir. It is estimated that the multiplier effect in Indian conditions is about 3.5 which means a single rupee invested in Tourism is equivalent to 3.5 rupees invested in other sectors. But this does not hold in Kashmir as most of the inputs in this sector are imported from outside the state which makes tourism earnings to have a quick exit providing only seasonal jobs to the locals.

Another sheepish mentality is construction of shopping complexes everywhere. Instead of investing money in making goods which could be locally used and could lessen imports of these, people have virtually gone crazy in making shopping complexes to sell goods from all over the world. Totally consumer based economy without any attempt to produce these goods especially in the food chain locally.

Above everything else, the local economy faces another serious handicap and that is the most undependable highway which incidentally is the only exit for the valley, the main historical one through Jhelum Valley Road having been blocked since 1947. If the state economy is to stabilise and grow, two things are most essential. First is the return to agriculture based economy for which the Ziraat Times has taken an initiative and the other is a dependable access to the valley from the outside world.The State Governments of all the political parties are least interested in creating an independent economy. They have mostly been busy in improving their own and their family’s economic well-being at the cost of the common people. If the economy is to survive and progress then a private and enterprising initiative taken by Ziraat Times has to be encouraged and multiplied manifold. The civil society has to wake up and take an initiative in this regard. Let us hope and pray this happens soon. In the alternative, Kashmir’s economy is destined to bleed to death!

Mohammad Ashraf, I.A.S. (Retired), Former Director General Tourism, Jammu & Kashmir

Courtesy: Counter Current



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