The economy of Kashmir is multifaceted by the fact that it is contributed by various sectors. The region has witnessed violent conflict for more than 3 decades, its geography is hostile and the politics are even more complex. As Kashmir’s economy is export-driven and import-dependent, the turmoil disrupted supply chains and negatively impacted whatever economic activity existed, politics and political discourse taking center stage. This article tries to understand the ground realities of the economy with emphasis on the last five years.

The major contribution to the economy of the region comes from exports, a major part of which comes from agriculture and allied activities, which are partially taxed. Hence, it does not have a strong tax base and results in dependence on the Center for funds. However, the argument that the economy of the region is centrally dependent has to be understood in context. The erstwhile state was given special status as the region is situated in hilly and difficult terrain and is strategically located along the borders of neighboring countries. From the perspective of the wider political economy, there is an increased dependence, which has become a part of the system over the years. As a result, the regional government was not obliged to raise the resources to fund itself.

The mountains are limited in mineral and fossil deposits with maximum of it are concentrated in the plains of Jammu with small reserves of bauxite and gypsum occurring in Udhampur. Ores such as limestone, coal, zinc, copper. The industrial population of Jammu and Kashmir is largely dependent on the available resources. The majority of the areas are electrified with the hydroelectric and thermal generating power plants. Jammu and Kashmir have vast hydroelectric generating potential along the south western part of the Chenab River but also along the Indus, Jhelum and Ravi River. Although in present scenario only a fraction of it is being exploited in present.

MSMEs (Micro, Small and Medium Enterprises) dominate the UT’s industrial sector, and they play a vital role in driving industrial development and economy in the state, contributing to 8% of the UT’s GDP and manufacturing and services Area. About 25,000 MSMEs working in the UT account for about 60% of the total investment and 90% of the total employment in the industrial sector of the UT. J&K SIDCO (Jammu and Kashmir State Industrial Development Corporation) is the nodal body of the state for promotion and development of small, medium and large businesses.

Before 2019, around 22000 persons were employed in around 500 IT firms in Kashmir. The Jammu and Kashmir government recently announced plans to build a huge IT hub with a built-up area of ​​2 million square feet to boost the information technology sector. As per the IT Policy 2020 of Jammu and Kashmir, the government will create a world-class IT park near the airport, national highways, rail terminals and institutions. Since the Internet is the oxygen for the IT sector which is often suspended, this sector is always at risk. Though the government has announced incentives for the sector, its future is still bleak as many of its facilities are currently unusable.

Handloom is the oldest and most widely practiced industry in the state, and it has been a way of life in the state since time immemorial. It is the largest unorganized sector in the Union Territory and mostly employs craftsmen. Handloom specializes in the production of materials like pashmina shawls, ruffle shawls, Shahtosh shawls, silk sarees etc. Because policymakers are thrilled with industrial jobs, no one has tracked the job creation of the artisanal economy. As per the records of the Department of Handlooms, Govt. In Jammu and Kashmir in 2007, one lakh women were officially registered as spinners, and an estimated five lakh women worked from home. However, only 15,360 active women spinners were registered in the department in 2021. Number of women involved in hand spinning in Kashmir.

The yarn for pashmina shawls has shrunk significantly over time. traditional weaving techniques rapidly disappearing. Women who spin the best yarn in the world have been left out due to low wages and automation. However, in response to this trend, Kashmir’s Directorate of Handicrafts and Handlooms has recently announced a Minimum Support Price (MSP) for GI-certified hand-made pashmina shawls to “preserve existing techniques”.

Industries have developed from rural crafts including handloom weaving of silk, cotton and wool. Carpet weaving wood carving and leather work add to the tourism of Kashmir by attracting and exporting goods to various parts of the country. The handicraft sector makes contribution in sustaining the export of the state providing employment and potential to generate employment outside the state as well. The industry has in particular grown from double digit budget to a Industry in itself also keeping the financial autonomy.

Estimates suggest that the annual turnover of this sector is more than Rs. 9,000 crores. The horticulture industry is vital to Kashmir’s economy, employing 700,000 households or 3.5 million people directly or indirectly. The Valley is the largest apple producer in the country. A district called Shopian is known as the apple bowl of the country, with apple orchards spread over 21,676 hectares. The apple industry is very sensitive to logistic disturbances as it is perishable and hence is directly defined by a certainty, lockdown, curfew and delay in moving the produce to Delhi or Punjab or any other place, whatever benefits a gardener can afford, it can cost.

Saffron is grown in three districts of Kashmir: Pulwama, Budgam and Srinagar. Pampore in Pulwama is bestowed with the title of “Saffron Town” as it produces the highest and best quality saffron in the region. About 30,000 families are involved in saffron cultivation in Pampore. About half of the workforce in the saffron cultivation sector is made up of women according to 2011 census.         

Tourism is another important component of the economy of Kashmir, accounting for 8% of the total GDP of the UT. According to industry estimates, the sector employs about 100,000 people directly and indirectly. Due to its geography, it provides opportunity to conduct various winter and adventure sports. Activities like skiing, rock climbing, river rafting, trekking etc. are enjoyed by thousands of tourists every year in the valley. This can also be lucrative for the locals of the Kashmir as the can be recruited as coaches of these winter and adventure sports.

Picturesque and enchanting, Kashmir is cradled high in the lofty of green Himalayas and hailed all over the world for its incredible natural beauty. Surrounded by mountain peaks, lush green valleys, glistening lakes, temples and spectacular Mughal-era gardens, it has inspired poets through centuries. Kashmir is crisscrossed by chinar tree-lined roads and quaint wooden bridges; and is home to busting bazaars, sufi shrines and forts. Add to this, the charms of flavourful Kashmiri cuisine and apples and walnuts from the lush orchards surrounding it. Mainstream population of India has a very different and disturbing image of Kashmir as a place due to insurgency and terrorism in valley. People of all classes and races think twice before visiting this place which leads to the valley staying sidelined in all aspects. Kashmir valley is a treasure which we possess and which needs to be experienced by each and every individual of this country.