On January 11, 2018, when the then finance minister of undivided Jammu and Kashmir, Haseeb A. Drabu, presented the annual budget, little did anyone realise that it would be the last one for the state. One of the key highlights was a focus on logistics. “The big idea,” he said, “is to move the economy to a frontier of lower logistics costs. The only way to reduce transactional and inventory management costs, which are hurting our businesses, is to bring down the logistics costs to sub 10 per cent levels.” The figure of 25-30 per cent for the state was unusually high.
According to RBI data, the state’s growth rate fluctuated between a negative 3.2 per cent and 17.7 per cent in the past few years. The economy reached a stage where industry and livelihoods either collapsed or were on the verge of it.
Since August 2019, when Article 370 was abrogated and the state was divided into two Union territories, the region incurred an estimated loss of Rs 40,000 crore, as per preliminary figures provided by the Kashmir Chamber of Commerce and Industry (KCCI). “We shouldn’t be treated like any other state,” says Sheikh Ashiq of KCCI. “We are different, and we jump from one lockdown to another. This cripples our economy.” He complains that the Centre has turned a blind eye to the plight of local traders.
Before the abrogation, J&K’s economy was driven by the service sector (56 per cent of the state GDP), followed by industry (28 per cent) and agriculture (16 per cent). Tourism accounts for 7 per cent.
According to the government’s response to a Lok Sabha query in December 2019, the number of tourists slumped from 154,000 in 2014 (August to November) to 36,105, a fall of 75 per cent. “August to November is peak season,” says Bashir Khan (name...