Representational image. | Image Courtesy: Livemint
In the din of charged political contestation pertaining to Jammu and Kashmir, what hardly gets attention is the economic conditions in the state that are taking a heavy toll on the people because of the prevailing conflict coupled with the indifference of successive central and state governments. Notwithstanding the enormous significance of the political problem that common Kahsmiris are grappling with, the struggle for livelihood is equally important. The Bharatiya Janata Party-led led government has, in fact, aggravated the economic crisis by creating a political chaos in the state, fueled by measures like demonetisation and goods and services tax.
It is primarily the working class and peasantry which are bearing the brunt of the current deadlock and wrong policies of successive governments. The misery and deprivation of people belonging to these marginalised sections is ever increasing. Most of the dead, blinded and amputated youth, militants and even policemen who frequently become victims of the conflict, belong to these sections. In some instances, the peasant and working-class families are losing their bread-earners to the conflict, creating a lot of hardships for their livelihood and survival. Because of persistent violent confrontations in the hinterland and cross-border shelling on the Line of Control (LoC) and Working Boundary, Kashmiri peasants and those who reside near the border in both Kashmir and Jammu provinces, continue to lose their property.
Not only these sacrifices, the Kashmiri peasantry and working class find themselves severely cornered on the livelihood front. The income gap between different classes is widening in the state, like in other states. The upper and upper middle class Kashmiris may have become richer, but the small land-owning peasants and urban working classes are living in terrible conditions. Land is diminishing fast. Peasants are under heavy debt burden. Rice and apple yields are forever declining.
The plight of daily wage earners, small time workers and labourers who reside in the urban areas, is equally bad because frequent lockdowns directly affect their livelihood. Teachers, ad hoc employees, daily wagers, casual workers, NREGA workers, contract workers, anganwadi workers/helpers, ASHAs, mid-day meal workers and others who are highly underpaid, can be often seen on the roads demanding pending salaries and wages. Instead of meeting their demands, the state authorities often use force to quell their legitimate protests.
After the revolutionary land reforms carried out by Sheikh Abdullah in the early 1950s, no major economic initiative has been undertaken in the state. Industry and employment generation has been the least priority for all governments. The state continues to be a consumer economy. According to one estimate, every year the state purchases goods worth Rs. 60,000 crore from the rest of India. The state’s three main economic sectors -- agriculture, handicrafts and tourism -- are experiencing stunted growth. Healthcare and education have also largely been ignored.
There exists a deferred liability practice in accounting in the state. Currently, the state is under huge liabilities which reveal gross mismanagement. In 2017-18, these went up to a record Rs. 68, 204 crore, recording an increase of 88% in the last six years. The problem is that there is no significant revenue back-up, which is one of the main reasons why the government often takes recourse to salary and arrear starvation, which adversely affects Grade 3 and 4 employees.
The states’ natural resources are also taking a terrible toll. For instance, the state does not own any power projects. The previous BJP-People’s Democratic Party coalition government had promised to get back ownership of power projects from the Centre, but far from delivering on its promises on this, it, in turn handed over one more hydel project (Kishanganga Hydroelectric Plant) to the Centre in May 2018 in return for only 4 megawatts out of the 330 megawatts that the project generates.
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Unemployment among educated youth is growing at alarming proportions. Yet there has been no effort to generate employment avenues for youth. In 2018, the state had an unemployment rate of 12.13%, according to the data compiled by the Centre for Monitoring Indian Economy in collaboration with the Bombay Stock Exchange. According to the government’s own economic survey, there existed an unemployment rate of 24.6% in the age group of 18-29 years, which is highest in India and far above the national average of 4.7%.
Many government departments, like the power development department, revenue and forestry, according to government’s own admission, are exhibiting abject performance owing to mismanagement and ad-hocism. Some key government departments and institutions also stand discredited with widespread allegations of corruption and nepotism, particularly under the PDP-BJP coalition, especially with regard to the recruitment process. As a consequence, the credibility and functioning of the key public institutions, like J&K Bank, J&K Public Service Commission, Vigilance Commission, Information Commission, and School Education Department, have been dented badly.
No concrete policy measures have been undertaken to improve the horticulture sector, which is one of the core sectors in the state’s economy. Apple farmers are reeling under the burden of bank loans while the prices of fertilisers and spray oils are sky-rocketing in the absence of any regulatory mechanism. The presence of spurious spray oils in the market is also impacting apple production.
As if the issues facing apple farmers were not enough, during the last harvesting season in November 2018, there was heavy non-seasonal snowfall in the valley which caused massive damage to apple produce and orchards. According to a report in the Hindustan Times, this particular calamity caused damages estimated ta around Rs. 1,000 crore. As compensation, the government paid the affected farmers Rs. 3,000 each, while in some cases, the amount was Rs. 4,000, which an absolute pittance considering the massive damages suffered by the farmers. These farmers have literally been left to fend for themselves. It was only the state unit of the Communist Party of India (Marxist) and its affiliate organization, J&K Kisan Tehreek, that lead a protest campaign for the affected farmers, demanding adequate compensation from the government and implementation of the crop insurance scheme in the state for any such future calamity, besides a one-time loan waiver. Till now, the government has not shown any readiness to meet any of these demands.
In the meantime, the local industry in the state has also been hit by the uncertain situation, mismanagement and the implementation of GST in 2017. The once world-famous handicraft industry of Kashmir is in shambles. Downtown Srinagar, which once used to be a handicraft hub, is now facing deprivation. Experts believe that cheap machine-made imitations and counterfeits of the hand-made artifacts are directly and indirectly affecting the livelihood of around 2.5 lakh Kashmiri artisans.
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The crisis in the local handicraft industry has been further hit by the hasty implementation of GST and has adversely impacted small businesses in the state. But its more palpable effect has been found on tourism, another key sector of the state’s economy. A report by a parliamentary panel on the development of tourism noted in December 2018: “Unlike other states, residents of Jammu and Kashmir and its business owners spend huge amounts of money on procuring essentials, most of which have to be flown in, which increases their capital expenditure…The sensitive nature of Jammu and Kashmir must be taken into consideration during the development of tourism in the region. The implementation of GST on tourism in the region will have manifold effects, mostly negative on its economy…The small business owners of small-scale hotels and home stays cannot list their properties on various travel intermediary websites as there is a levy of 18 per cent of GST, which cuts across the little profit they make, making their venture “unsustainable”. In this regard, the committee recommends that the implementation of Goods and Services Tax on tourism-related activities in the state must be reconsidered. It must be done in a cautious and phased manner in order to ensure that the delicate state of tourism in the region is not adversely affected.”
Like in the rest of the country, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in J&K was launched with the aim to uplift the rural economy by providing employment opportunities to men and women. However, according to some recent surveys and as already reported by Newsclick, there is enough to suggest that the scheme has been badly hit by poor implementation, mismanagement and corruption in J&K. Sub-standard construction, fake job cards by contractors, delayed and less wages to labourers, and less than the required 100 working days (only 57 days in the last two years) are the other issues hampering the scheme in the state.
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A survey in 2018 disclosed that only 37% of overall construction was considered good in the state. Similarly, government data on the scheme for the last two financial years, 2017-18 and 2018-19, shows a huge deficit of funds Rs. 120.36 crors and Rs. 577.74 crores, respectively, in the funds expenditure. As a result of this deficit, the wages due for these two years have been Rs. 417.06 crores and Rs. 509 crores, respectively. This shows that the MNREGS in J&K is failing to meet its objectives.
Another issue that adversely impacts the activities of trade and commerce besides causing other problems is the frequent internet shutdowns enacted by the government. According to a survey by International Council for Research on International Economic Relations (ICRIER), the recurring internet shutdowns have caused an estimated loss of more than Rs. 4,500 crore to state’s economy in the past six years.
Adding to the crises was the latest decision of the Centre to close the national highway for two days a week for “security” reasons. This has dealt another blow to the already shabby economy of the state by impacting the transportation of fruits, goods and flow of tourists. Various unions of traders are already protesting the ban. Banning transport for two days a week could also lead to shortage of essential commodities which, in turn, will lead to a hike in prices, thus worsening the already prevalent crisis.
The writer is a blogger and youth activist based in Kulgam, Jammu & Kashmir. The views are personal.