Greater economic opportunities, ‘Naya’ hopes, in ‘Naya’ Kashmir

Ten years after assembly elections were last held in Jammu & Kashmir, voters in the state are flocking to the booths to exercise their franchise over three phases from September 18 to October 1. These are the first legislative elections after the abrogation of Article 370 in August 2019. The Article, which was in place since 1949, gave the state a special status with its own Constitution, flag, and autonomy of internal administration.

Despite the dire scenario doomsayers painted, residents and businessmen say the situation in the Valley and beyond is much improved since the Narendra Modi government’s bold step five years ago.

Tourism is the most visible indicator of change. Data shows a record rise in the number of domestic and international arrivals in Kashmir. Assured of their safety and secure surroundings, tourists are flocking to the state with Srinagar, Gulmarg, Sonmarg and Pahalgam as the hotspots. This tourism revenue is being ploughed back into the state’s economy.

 Business Today spoke to Sajji, a tour operator who confirmed a “significant change” in the past five years. “Five years ago, we were cautious about organizing tours here. But now, it is a different story,” he said, adding, “I bring around 150 tourists from Calicut every month. The improved security and infrastructure have made Kashmir a top destination once again."

 He is not alone in his optimism for the future. Momin, a student, told us, “There's definitely a sense of progress. Schools are functioning better, and there are more opportunities for students like me. It's encouraging to see things moving in a positive direction."

 Srinagar resident Ashaq Hussain was vocal in his praise for the development seen in the past few years. “The changes are real. We have better roads, more businesses are reopening, and there's a sense of normalcy returning”, he said to Business Today. Shah Imtiaz, proprietor of Fashion Ghar remarked, “It was tough before. The market was often closed due to unrest, and we were struggling to survive. But now, things have changed for the better. We have a steady flow of customers, both locals and tourists. I support the election process and believe that the continuation of the abrogation is essential for peace and stability. I hope we don't go back to the old days.”

In downtown Srinagar, once a flashpoint of unrest, a remarkable revival is underway. The area surrounding Jamia Masjid, which was once deserted, is now teeming with crowds. Shops are open, and business is thriving, marking a new chapter for this historic part of the city. Basarat, who lives in downtown Srinagar, says, “It's like a breath of fresh air. The fear and tension that once ruled these streets are gone. People are moving freely, businesses are growing, and there's a sense of peace that we haven't felt in years. This 'Naya Kashmir' is what we always hoped for.”

BUSINESSES DRIVING THE CHANGE

It is not just tourism that is blowing the winds of change in J&K. A report by the Indian Brand Equity Foundation (IBEF) highlights the role of horticulture and floriculture, handicrafts and handloom, and sericulture as the other key industries in the state.

 The climate of the region suits food processing & agro-based industries with cultivation of fruits and vegetables hitting a high in 2021-22.

J&K enjoys a unique place in the handicrafts map of India with its silk carpets and cottage handicrafts industry providing employment to lakhs and earning precious foreign exchange. The state government has ploughed in hundreds of crores to upskill craftsmen and build capacity in the sector.

Emphasis is also being put on manufacturing in the valley, with industrial hubs being developed in Rangreth, Khonmoh, Zainakote and Zakura localities of Srinagar and in Pulwama. Separate agri processing zones are being planned to promote the marketing and exports of apples and walnuts.

Special focus is also going into educating and skilling the youth to ameliorate the economic stress due to unemployment which, as per the Economic Survey 2023-24, currently stands at 4.4 per cent, down from 6.7 per cent in 2019-20.

THE BIG NUMBERS

The past five years have seen the Gross State Domestic Product (GSDP) of J&K grow 54 per cent to Rs 2.46 lakh crore in 2023-24 from Rs 1.60 lakh crore in 2018-19. This translates to an impressive compounded annual growth rate of 8.98 per cent. The state economy grew 7.41 per cent in 2023-24, with the nominal GSDP growth estimated at 9.9 per cent, well above the national growth rate of 8.2 per cent in the same period.

This overall economic growth has pulled up the per capita income in the state 58 per cent to Rs 1.80 lakh in five years to 2023-24.

However, what has also ballooned is the debt, which has ballooned to 49% of the state GDP in 2023-24. This translates to around Rs 1.20 lakh crore.

What could act as the next catalyst for an economic boom in the valley is the rail connectivity which will open Kashmir up further to commerce with the rest of the country. The rail link will not only bring in passengers and tourists, but improve access to even goods and other services.