Kashmir: Economics of Uncertainty and conflict

J&K government placed on table the Economic Survey 2016 listing achievements in multiple social and economic sectors. For a change, the 265 page survey has closed shops on its front page indicating stress and tension. For the first time again, it has tackled the costs of unrest. The survey suggests that Kashmir and Jammu have lost Rs 16000 crore to the summer unrest 2016 in addition to the human losses, delay in infrastructure projects and failure in implementing routine schemes. In the larger public interest, Kashmir Life is reproducing this chapter to help readers understand how government sees the tension and the conflict.

This chapter focuses on the economics of civil strife and unrest in Jammu and Kashmir. While the causes of it are complex and highly debated, the costs and consequences require a basic formulation and a deeper analysis. In this chapter, an attempt has been made to examine how the issue of social unrest and civil strife impacts the economy of the state.

Apart from loss estimation, it will seek to answer who bears the costs, how are the costs manifested, and how it affects the physical, social and institutional capital of the region.

Much has been written on the Kashmir Issue and the conflict in political terms. Virtually nothing has been written on how people are coping with what has now come to become an enduring conflict in the words of T E Paul. It is never been the focus of any research as to how it is actually the people of the State, who are made to suffer in absence of a sustainable peace, survive through turbulent times.

The turmoil of 2016 resulted in unending clashes between people and security forces, caused killing and injuring of civilians, burning of Government property, and tremendous loss of Industrial production and services coupled with the halt in Economic activities in the backdrop of long spells of curfews and hartals for a period of more than 5 months from 8th July, 2016 to November, 2016. The tourism sub sector and industrial/business activity which is backbone of Kashmir economy came to grinding halt during the period.

Stone pelting at Eidgah Srinagar port Eid prayers. (KL Image: Bilal Bahadur)

With regular cycles of unrest since 2008 disrupting the social life and hitting the economy hard, the biggest challenge for the state government is two fold: (a) to prevent re-occurrence of such events (b) to calibrate the economic and social policy to what in the short run is the ‘new normal’. The planning process has to factor in the possibility of such events happening in the short run. Economic policy has to factor in the ‘uncertainty impact.

After a decade and half long militancy and a five-year relative period of peace 2002 onwards, the prolonged cycles of unrest since 2008 have become a new normal in the social, political and economic life of Jammu and Kashmir resulting into highly adverse impact on economic growth and infrastructural development.

Since June 2008, there have been four cycles of unrest – Amarnath land row, Shopian ‘rape and murder’ case, 2010’s summer turmoil and the latest unrest following killing of Hizb militant Burhan Wani – adversely hampering the delivery of public service and drastically slowing down the developmental expenditure.

It is imperative that public expenditure policy provides for unforeseen contingencies that may arise. Public finance, on its part, must have a plan to meet the liabilities arising because of these uncertainties.

Be it bandhs, hartals, curfews and civil strife, the impact on business and trade and the consequent effect on the process of income generation needs to be taken into account.

As it is, the prolonged cycles of unrest and short bouts of heightened militancy over the last twenty five years have affected the development scenario in the state. It not only has virtually acted a barrier to private investment, but created hurdles in creating basic infrastructure for delivery of public services.

The economic cost of the conflict cannot be confined to a particular sector of industry or investment prospects. It has affected the important sources of livelihood of local people such as tourism, horticulture, handicrafts and industries.

Understanding the politics of the conflict is vital

Without getting into the historical roots and basis of the ‘conflict’, the recent three episodes have shown how fragile the peace is and how easily not only business but the whole life is disrupted in the valley. Quite unfortunately, this has now been occurring with alarming regularity. The Economic development of J&K State, therefore, is the first causality due to lack of “enduring peace”.

People shout slogans during funeral procession of four youths killed in Aaripanthan area of central Kashmir’s Budgam district. People in thousands attended the funeral prayers

Conflict creates macroeconomic instability and Crisis volatility

Macroeconomic instability is “a situation of economic malaise where the economy does not seem to have settled in a steady position”.

Macroeconomic instability can take the form of volatility of key macroeconomic variables and of unsustainability in their behavior. In addition to volatility, unsustainable performance in the macroeconomic variables like low and unstable growth rate, high inflation, large unemployment, unsustainable and current account deficits are also the attributes of macroeconomic instability.

Macroeconomic volatility refers to fluctuation in macro variables and to the uncertainty associated to them. J&K economy is not experiencing normal volatility but “crisis volatility”. Crisis volatility refers to extreme shocks exceeding certain cut off points. The continued lockdown/ curfew in the state due to unrest is the instance of “Crisis volatility”.

The major costs of macroeconomic instability are significant in terms of (i) Welfare loss (ii) Increase in inequality and poverty and iii) Decline in long term growth Macroeconomic instability induces increase in Pre-cautionary savings for future, which ultimately reduces investment. In Kashmir valley people save more for future shocks that are caused due to conflict economy. During the unrest of 2016, we could see that the people of the valley could sustain only when they had kept good savings apart on which they sustained during 5 month long inactivity.

Cost of Conflict to the State of J&K in general terms

J&K State is a hilly state. Its net area (in Indian part) is 1,01,387 sq kms. Its population (2011 census) is 1.25 crore souls. The forest cover of J&K State is 20% of its total geographical area (comparable). The density is 124 people per sq km.

Its GSDP (at constant prices 2011-12) for 2015-16 is Rs. 91806 Crore and the per capita income (NSDP 2015-16) is Rs 57858. The growth rate is 7.79% over 2014-15. The composition of GSDP (2015-16) is as under:-

Composition of GSDP 2015-16 (Rs in Cr)

Primary sector (Agriculture)  Rs 13893 (making 15.89% of the GSDP)

Secondary Sector (Industries) Rs 23710 (27.11%)

Tertiary Sector (Services) Rs 49848  (57.00%)

Now, let us compare the economic progress of J&K State with sister state “Himachal Pradesh” which is not a conflict area state. Its total geographical area is 55673 sq kms with population of 68,64,602 souls as per 2011 census. The density is 123 people per Sq km. Its forest cover is 20% of geographical area.

Total Geographical Area of Himachal Pradesh 55673 sq kms

Total Population 6864602 (2011 census)

Forest cover 20%

Density 123 people per Sq km.

GSDP of Himachal Pradesh for the year 2015-16 at constant /Base 2011-12 is Rs 95,929 cr. Per capita income (NSDP 2015-16) is Rs 1,11,977. The growth rate is 7.72 % over the previous year.

Composition of GSDP of state of Himachal Pradesh:-

Primary sector (Agriculture) 15.44%

Secondary Sector (Industries) 39.70%

Tertiary Sector (Services) 44.86%

Conclusions from the comparison:-

J&K State is trailing behind in the following indicators:-

GSDP (Constant) less by Rs 4123 cr (2015-16)

NSDP (Constant) less by Rs 2263 cr (2015-16)

Per capita NSDP (Constant 2015-16) less by Rs 54119

  1. With just 55% of the geographical area and 55% population compared to J&K State, the GSDP of Himachal Pradesh at constant prices is 4.30% more than J&K State. Per capita income (NSDP 2015-16) is 48% more than that of per capita income of J&K State. Growth rate of Himachal Pradesh is 7.72% while growth rate of J&K state is 7.79% at constant 2011-12 prices for the year 2015-16. But growth rate of Himachal Pradesh is consistently growing at same pace. The following table explains the same: –
  1. J&K state with population and geographical area almost double than area and population of state of Himachal Pradesh, is trailing behind the state of Himachal Pradesh by Rs 54119 in respect of per capita income (2015-16 NSDP). The main reason of backwardness of J&K State is that it is a “conflict area”.
  1. Had J&K State been a “conflict free” state, its economic progress vis-à-vis state of Himachal Pradesh should have been at least double the economic progress of state of Himachal Pradesh.

J&K Economy with and without conflict in comparison to the state of Himachal Pradesh

Assumption I:

By extending area of Himachal Pradesh state and population to the level of J&K state at current progress, the progress of J&K state would be:-

GSDP (constant) 2015-16 would have been Rs 173015 cr viz-a-viz Himachal Pradesh State

Per capita income (constant NSDP 2015-16) Rs 115094 viz-a-viz Himachal Pradesh State Conversely had Himachal Pradesh been a conflict area, its economic progress would be as under:-

Assumption II:

GSDP (constant) 2015-16 Rs 50902 cr

Per capita income (Constant NSDP 2015-16) Rs 62808

GSDP computed on the area of J&K State at 1.01 lakh Sq Kms and Himachal Pardesh 0.56 lakh Sq Kms. Per capita income has been computed on the basis of population of 2011 census.

GSDP of J&K State is less than that of state of Himachal Pradesh by Rs 4123 crore despite of the fact that area & population of State of Himachal Pradesh is less than J&K almost by 45%.

The tourist inflow to J&K State for the year 2015 stood at 92.03 lakh tourists whereas during 2014 it stood at 95.25 lakh. The tourist inflow to Jammu region, Kashmir region and Ladakh stood at 77.77 lakh & 78.03 lakh for Jammu, 12.81 lakh and 15.41 lakh for Kashmir and 1.46 lakh and 1.81 lakh for Ladakh respectively during the said years.

While the magnitude of pilgrim tourists during 2015 and 2014 to Jammu province was 77.77 lakh and 78.03 lakh, the magnitude of pilgrim tourists to Kashmir valley was 3.53 lakh & 3.73 lakh. In view of the fact that pilgrim tourists do not add much value to the economy of the region therefore, the increase in number of pilgrim tourists to Jammu or Kashmir does not make substantial impact on economy of the region excepting that it increases some economic activities in the local vicinity of pilgrimage places. Generally, pilgrim tourists do not undertake luxury tours and therefore, they spend very less. Piligrim tours are specifically of very short duration which last for 2 to 3 days where as luxury tourists stay for more than 7 days. It is the luxury tourist which adds to the economy, as luxury tourists stay in hotels enjoy eating in restaurants, use shikaras, taxies, Ponies, cable car etc, Besides, luxury tourists purchase gift items for themselves and for their relatives. Thus, the luxury tourist adds value to the economy. On the contrary, tourist inflow to the state of Himachal Pradesh for the said years i.e. 2015 and 2014 stood at 175.31 lakh and 163.14 lakh tourists respectively. Therefore, tourist inflow to J&K state is less by

83.28 lakh tourists in 2015 and 67.89 lakh tourists in 2014 than the state of Himachal Pradesh despite the fact that J&K state particularly Kashmir valley has tremendous scenic beauty/tourist spots than that of state of Himachal Pradesh.

Thus, the tourism sector needs to be given highest attention to boost tourist inflow for economic development of the State.

Hydel power potential of both J&K and Himachal Pradesh states is estimated at 20,000 MW each. The State of Himachal Pradesh has harnessed capacity/projects to the extent of 6370 MW (32% of estimated potential) while as J&K State has exploited 3263.46 MW (16% of estimated potential) only.

Large & Medium Scale Industries in J&K state are only 86 with employment of 19314 persons as against 503 Large & Medium Scale Industries with employment of 60908 persons in state of Himachal Pradesh.

Net area sown of J&K State is only 7% of total area (comparable area) while as the net area sown of the state of Himachal Pradesh is 12% of it’s total cadastral surveyed area of 4543 thousand hectares.

Unrest and Civil Strife in Valley in 2016: Costs

Loss of life and property, and complete shutdown of business during unrest:

In 2016, like the earlier cycles, the civil strife caused tremendous miseries, loss of life, complete halt of economic activities in the valley coupled with loss of property worth crores of rupees.

The scrapping of internet services, mobile and terrestrial phone services for long spells during the turmoil made communication in the state very difficult. Hartals, bandhs, stone pelting, curfews, and restrictions immobilized the whole life in all the 10 Districts of the valley.

The medical services also got badly affected and disrupted. Chronic patients suffering from cancer, heart disease and patients requiring dialysis, and other patients requiring continued treatment and check up had to suffer a lot during the unrest, resulting in death of some of the patients due to lack of timely medical treatment.

The general estimates of the losses caused due to the unrest are estimated at more than Rs 16,000 crore over a period of 5 months from 8th July 2016 to 30th November, 2016.

The cost of security related expenditure is over & above the losses caused due to unrest of 2016 in J&K State.

Pellet hit trio.

Loss to Human Resource Capital

The importance of Education for the well being of the individuals and nations need no explanation. The exposure to violence and armed conflict reduces the quantity of education attained by children of conflict areas. The main contributories to the lessening of attainment of quantity of education are (i) destruction of schools infrastructure, (ii) fear of sending children to school, (iii) incorporation of youth into armed groups, (iv) negative economic shocks to households and v) forced displacement.

In the year 2016, the schooling could be conducted only for a period of 4 months in Kashmir valley.

The 10th class and 12th class exams held in November, 2016 covered only 40 % to 50 % of the total curriculum.

Similarly, classes from Ist to 9th had to be given mass promotion.

All these fire fighting measures would definitely tell upon the learning capabilities, quality and quantity of education attained by the students of the valley, which will impair their future learning and competitive abilities compared & contrasted to students of other areas of the state/ country and the world. This will affect the human capital resource of the valley.

Besides, those children/ students who got injured or blinded due to conflict or were forced to dropout whether temporarily or permanently again constitute the loss to human capital resource of the valley.

Other Macro Economics Costs

Conflict has reduced Per capita GDP growth in J&K State. It has reduced FDI inflows, exports, trade flows. It has reduced domestic investment and savings. It has redirected public expenditure to security related expenditure. It has reduced tourist inflow and tourism receipts and reduced demand for transportation.

Impact on Economy of J&K State

Right from 8th July evening, the valley got entrapped in the politics of hartals, stone throwing, curfews and chronic law & order problem. The entire valley including rural areas and urban areas remained shut down for a long time due to continuous hartals, and stone throwing incidents followed by curfews.

Roughly, the hartals engulfed the whole valley for more than 5 months up to now. The continuous hartals, stone throwing and curfews have resulted in loss of tourist season (July, 2016 to October, 2016), loss of working season, about 116 days out of total working season of 180 days (May to October) in 2016. Thus, about 64% of the tourist and working season has been lost.

The loss caused to economy of the state due to hartals /curfews in the valley is estimated to about more than Rs 16000 cr.

The impact of hartals /curfews on Industry and development sectors of the state economy in the valley is summed up quantitatively in brief which is as under:

Education sector

Primary, Middle & High/Higher Secondary

There are 14352 schools (primary, middle & high / higher secondary) including 2787 private schools in Kashmir valley as on 31.03.2016. The total enrollment in these schools as on 31.03.2016 is 1377183 including 598734 in private schools. The academic session in Kashmir valley starts in March and ends in October in a year. The exams are in general conducted in November. Due to closure of schools, the academic session got badly hit to the extent that it caused irreversible loss of study and tuitions to the students. The exams conducted by J&K Board of Secondary Education for 10th & 12th standard students covered only 50% of the total syllabus. However, an option has been given to the students to appear in March (for 100% syllabus coverage) also.

The loss of 50% content of the syllabus will surely have to be covered by the student community itself so that they are able to compete in ensuing entrance exams held at the country level. Around 95 % students have appeared in the 12th exam and 99 % students have appeared in the 10th class in the valley. Decision was taken by the Govt. for waving of Term-2 examination from Class 1st to 8th

The total strength of the enrolled students in 10th &12th classes in the valley schools is of the order of 56277 & 31964 respectively during Academic session 2016.

31 school buildings were gutted (17 fully +14 partially) during the turmoil period. 15 school buildings were saved by the chowkidars / employees of Education Department/ local community.

Higher Education

After declaration of results in December, 2015/January, 2016, the classes in higher education institutes like colleges, had started in March, 2016. The class work could be conducted up to 8th July only & from 9th July, the colleges have also been closed, resulting in loss of study of 130 days & more. This has resulted in the delay in the coverage of 1st semester syllabus & also is resulting in the delayed conduct of 1st semester exams. The hartals have also badly affected coverage of other semester studies which were got also delayed due to it.

Similarly, in the universities located in the valley, the class work at Master Level remained badly affected. The 1st semester studies got half way left and the entrance exams schedule also got delayed / affected. The classes work in the Medical colleges, NIT was also affected badly resulting in stress to student community and to their parents.

During the current academic session 2016-17, 84811 is the total enrollment registered in all Government Degree Colleges of the Kashmir division against enrollment of 72000 during the year 2015-16. The loss of studies of 130 days & more is irreparable and will have to be compensated through conduct of evening classes and additional classes on holidays to make the students have the knowledge in order to enable them to compete with student community at the country level.

The level of expenditure during the 1st two quarters of 2015-16 was of the order of Rs 26.79 cr while as expenditure during 1st two quarters of the financial year 2016-17 is of the order of Rs 48.43 cr. Rs 8.98 Cr have been utilized on development of infrastructure of the University of Jammu, University of Kashmir, Islamic University, Baba Ghulam Shah Badshah University and Shri Mata Vaishno Devi University.

Technical Education

The prevailing turmoil and strikes in Kashmir valley have obvious implications on the implementation of Technical education programmes in the valley. Some of these implications are outlined hereunder:

Ø The impact of strikes has been deep and profound on the educational atmosphere in the valley. The academic calendar got altered and was adjusted in order to meet up with the current situation. Technical education Institutions/Students in the valley were not able to complete their academic/practical work fully within the prescribed period.

Ø Skill based courses require no disruption in the process in order to guarantee easy transmission of skills. The normal skill imparting process as well as new skill development initiatives got hampered due to strike, resulting in truncation of initiatives. This may consequently affect the formation of generation’s next workforce.

Ø The infrastructure development is a key to progress and economic development of every sector. A good number of working days have been lost due to the prevailing strike resulting in non-creation of adequate infrastructural facilities in various institutions and slow execution of new projects/works in the valley.

Ø For proficiency and efficiency, the up-gradation of available facilities and equipment used in the teaching and learning in the Technical/Craft institutes, is a must. But, due to incessant strike, action in this regard got hindered.

Ø Closure of financial institutions also lead to recording of low financial progress under various programmes during the strike period.

BOLLYWOOD RETURNS: Asia’s largest Tulip Garden has become a major attraction for tourists as well as people from Bollywood. A sequence for Mahabarta serial was shot in the garden when it was in full bloom.


Tourist season in the Kashmir valley starts from April and lasts up to Oct, thus making season of 7 months. During 2015-16, the number of tourist who had visited the valley stood at 6,23,932 including 2,20,490 Amarnath yatris. The tourist season had started during 2016 in April and was in full swing up to end of 7th July, 2016. The remaining about 4 months (24 days of July, August, September and October) remained completely tense and registered closure of all activities due to turmoil resulting in almost zero arrival of tourists in the valley.

The disappearance of tourists in the valley during 04 peak months resulted in loss of business to hoteliers, restaurants, houseboats, handicrafts, poniwallas, transporters, shikara walla and so on.

The revenue loss during 2nd quarter of 2016-17 is of the order of Rs 751.97 lakh (80%) compared to revenue realization of Rs 936.89 lakh in Q2 of 2015-16.

Revenue realized during 1st and 2nd quarters of the financial year 2015-16 and 2016-17 by Tourism Department. Nine revenue earning units in tourism sector recorded an earning of Rs 19.13 cr and Rs 9.36 crore in Q1 and Q2 of 2015-16. For the same period in 2016-17, the earnings were recorded at Rs 32.45 crore and Rs 1.85 cr.


The industries in the valley came to halt due to turmoil. The industrial units in industrial estate Lachipora, Khonmoh, Baghi Ali Mardan khan, Rangret, Anantag , Aischan, Chittipora, Baramulla, Bijbehara, Kupwara, HMT etc came to halt which resulted in the idle payment of wages to the skilled labour for more than 4 months and loss of production in Kashmir valley.

The estimated loss suffered by Industry during hartals /curfews (130 days) is of the order of Rs 13291 cr comprising of Rs 6548 cr of private sector and Rs 6713 cr of Govt sector. The estimated turnover and revenue loss in Rs 13291 cr is of the order of Rs 11555 cr (Private sector = Rs 5720 cr & Govt sector=Rs 5835 cr) and Rs 1736 cr (Private sector=Rs 858.00 cr & Govt sector=Rs 878 cr) respectively.

In addition to above, some Jammu based SSI Units have also suffered production losses due to turmoil in the valley as reported by Industry department. The turnover loss has been reported as Rs 1800 cr and revenue loss as Rs 275 cr.

Infrastructure Sector

A number of schemes are under implementation under Roads & Bridges sector across the state for achieving the desired goals. However, due to law & order problems in Kashmir valley from July, 2016 onwards, the developmental programmes did suffer in the valley.

During first two quarters of 2015-16, a road length of 1685 kms were blacktopped under various programmes in the State whereas the achievement made during the current financial year for first two quarters, is 1410 kms.

It is estimated that had the situation been fully favourable, the department could have undertaken many more macadamization works in Kashmir valley. In addition to this, there is shortfall of about 300 kms of achievement in the Kashmir valley with respect to Water Bound Macadam (WBM) works of all grades during the current financial year (Q1 & Q2).

The level of expenditure recorded at the State level was of the order of Rs 348.47 cr during first two quarter of 2016-17 as against Rs 346.81 Cr recorded during corresponding period of 2015-16. The financial achievements made by the department reveals that the expenditure level has reduced considerably in Kashmir Division from Rs 178.97 Cr during 2015-16 (Q1 & Q2) to Rs 74.39 Cr during 2016-17 (Q1 & Q2).

In addition to this, the bridges as well as the buildings sector received setback in the valley though the pace of the works is picking up now. The progress of the projects being executed by National Highway Authority of India in valley especially 4 lanning of Srinagar-Banihal stretch and Z- morh tunnel, also got suffered due to disturbances.

Construction activities

All the major and minor construction projects which were going on, came to halt due to turmoil of 2016. The 1st impact of the turmoil was on labour. Almost 90% skilled and unskilled labour from Bihar/ UP/West Bengal etc which migrates to Kashmir Valley during April, 2016 could stay upto June, 2016 only and, thereafter, left the valley and went to other parts of India from 8th July onwards.

The return of migratory skilled/ unskilled labour in the valley due to turmoil resulted in the stoppage of almost all construction activities. Even the outsourced construction agencies who were constructing a few major projects like flyover, bridges, some major power & road projects etc have come to a grinding halt. This is sure to result in delay in the completion of these project and will escalate the cost of these projects. The following major projects have drastically come to halt due to the turmoil of 2016:-

  1. Flyover from Jehangir Chowk to Rambagh.
  2. Kishen Ganga Hydel project

Labour And Employment

The shops and commercial establishments remained closed during the hartals / curfews that had worst impact on the employees of these shops due to nonpayment of their wages.

A loss of Rs 168.00 crore on account of wages to the employees has been worked out as per minimum wage schedule. Likewise Rs 276.00 crore has also been worked out as loss to the self employed wage earners in construction and building works. There are 93572 employees in shops and commercial establishments while as 153388 are self employed in construction and other works under the “Building and other Construction Workers” (BOC) act as on Oct, 2016.

Due to hartals /curfews in Kashmir valley, most of the funds meant for implementation of the Self Employment Schemes could not reach to the deserving beneficiaries, besides no awareness camps/counseling programmes could be organized.

A representative KL Image


As per the information supplied by Power Development Department, the losses suffered by the M&RE wing of the department, due to prevailing situation in the valley, is of the order of Rs 1.07 cr which is mainly on account of damages caused to transformers, installed at various locations in the districts of the Kashmir valley.

Under T&D sector, the physical achievements for the first six months of financial year 2016-17 are of the order of 28.15% as against 37.19% during the said period of 2015-16 while as financial achievements are only 33.21% during (first six months) the year 2016-17 as against 40.65% during the said period of the year 2015-16. The less progress in physical and financial achievements during first six month of 2016-17 is due to unrest in the valley.

Transport Sector

Transport sector is the worst hit sector in the valley during 04 month of turmoil in 2016. There are 4500 passenger buses, 3853 taxis, 24223 trucks, 186477 private cars, 210236 two wheelers. The brunt of the stone pelters fell on all types of vehicles which included 2 wheelers, 3 wheelers, 4 wheelers, 6 wheelers and above. Even the railways closed the service from Banihal to Baramulla during the turmoil which has partly been restored from 18/11/2016. A sizeable number of vehicles were damaged by stone throwers during the turmoil. The halt in the transport meant halt in mobility. The alternative to public transport was private light transport which could only ply with risk of receiving stone caused damages to their vehicles. Some private vehicles were also burnt by the protesters.

Windshield shuttered trucks in Khrew.

Non earning of the transporters due to turmoil resulted in nonpayment of bank loans. The consecutive default in repayment of loans for 3 months and more to the banks means increase in NPA to the bank.

The transportation halt has caused halt in the mobility of the common people in their daily movement.

The hartals and curfews totally made the vehicles immobile.

The mechanical workshops, petrol pumps, service stations, etc also got affected due to the halting of public transport. The people connected to this sector were also affected badly.

Hartal has worst impact on JKSRTC working/earning due to continued strikes in Kashmir valley. The corporation lost at least Rs 5.25 crore of revenue as compared to last year achievement during the same period. However, due to all these odds, JKSRTC continued its passenger services from Srinagar to Jammu and trucks for carrying food grains in every nook and corner of Kashmir valley. Their 182 vehicles have been damaged by the miscreants which include 76 trucks.

Animal/Sheep Husbandry

The routine activities carried out by the Department especially with regard to the genetic improvement, vaccinations, dosing, etc was affected significantly.

The Maximum brunt of the unrest was witnessed at marketing of the animals especially at Qurbani Idd, when against availability and estimated consumption of 2.50 lakh animals, only 80,000 could be sold by the farmers/rearers and that too on the lower rates due to sluggish demand.

Stocking Flock: This year Wagey and his family are travelling with 650 sheep (including 35 he owns), 32 horses (including two which the family uses for transportation of essentials from one place to another), 30 goats and 20 buffalos.

Under normal conditions when a local grown rams generally 40kg body weight, could have fetched about Rs. 9500/-, was sold for around Rs. 7500/- only, incurring a total loss of about approximately 16 crore to the farmers.

In addition the department last about 658 quintal of Hay at sheep Breeding Farm Zawoora, Shopian as the hay shed was set ablaze by unruly mob on 29 July, 2016.

Moreover, the establishment of sheep units under Mini Sheep Farm Scheme approved under State Sector could not be carried out during the period as the process of selection of beneficiaries/Bank screening etc was not possible.

Similarly, construction and ongoing civil works mostly undertaken through R&B Department were also hampered.

Fisheries Sector is no exception to this. The revenue realization under Fisheries Sector ending September, 2016 was just 192.85 lakh as against is Rs.241.66 lakh during the same quarter in the last financial year.

The sport fisheries particularly Trout Angling has suffered significantly and against a total of about 1500 Anglers, only 600 Angling permits were issued resulting in huge loss of license fee.

Due to civil unrest, important assets of the department such as one hut each at Kokernag, Akad, Buniyar & Shopian were gutted.

The Animal and Sheep Husbandry Department has recorded level of expenditure of Rs 315.43 lakh during 2016-17 (Q1 & Q2) as against Rs 243.24 lakh during the same period of the year 2015-16.

The expenditure of Animal and Sheep husbandry Kashmir during 2016-17 (Q1 & Q2) is of the order of Rs 33.10 lakh as against Rs 44.87 lakh during the year 2015-16 (Q1&Q2). The level of less level of expenditure could be attributed to the turmoil in the valley.

The production (estimated) of milk, mutton and wool has gone down by 2.96%, 2.51% and 3.55% respectively during the first two quarters (Q1 & Q2) of the financial year 2016-17 as compare to corresponding production figures of these items during the year 2015-16 (Q1 & Q2).

Food Civil Supplies and Consumer Affairs

The hartals have little impact on the working of Food Civil Supplies and Consumer Affairs (FCS& CA) Department. However, 4908 KLs quantity of Kerosene Oil could not be lifted and distributed among beneficiaries due to turmoil situation in the valley.

The comparative analysis of FCS & CA department reveals that only Rs 7.50 lakh (4%) has been expended during Q1 & Q2 of the year 2016-17 as against Rs 36.00 lakh (21%) during the same period of the year 2015-16.

Health Sector

The workload of Tertiary Care Hospitals district hospitals, Sub-district hospitals, Public Health Centres hospitals and above medical care institutions has increased manifold due to law and order situation in the valley. 211 Ambulances have been damaged during the prevailing situation in the valley as on 18.11.2016.

The damaged ambulance Sofi was driving.

During first two quarters (Q1&Q2) of the financial year 2016-17, the expenditure level of the sector is of the order of Rs 152.97 crore as against Rs 153.61 crore during the same period of the financial year 2015-16 (Q1&Q2).

Drug & Food Control organization has nil expenditure during Q1 & Q2 of the year 2016-17 as compared to 63% during Q1 & Q2 of the year 2015-16.

Banking Sector

The state of Jammu and Kashmir has 24 PSU Banks, 9 private sector banks, 2 regional rural banks, 10 state and central co-operative banks and a state owned financial corporation. There are a total of 1998 branches in entire state as on 31st March 2016.

Besides banking branches, there are around 1456 banking correspondents spread across the state.

Kashmir Valley has been facing continued turmoil/ disturbances since 9th July, 2016, which has adversely affected economic pursuits of all the business establishments in the State. Business activities of all shops, commercial vehicle operators, Hotel Industry, industrial units and other business establishments has come to halt resulting in huge losses to the economy of the state. The trade, tourism, industry and transport have been severely hit.

The impact has resulted in the borrower’s inability to conduct their business in normal manner, operate their business accounts in smooth manner and repay interest and installments of Term Loans in time from July, 2016 onwards. Consequently, huge credit portfolio of the banks operating in the State is under stress and may slip to NPA.

The impact of continued turmoil/ disturbances on the credit dispensation by banking sector in the State is concerned, it is to submit that total credit disbursed by banks under Annual Credit Plan 2016-17 as at the end of first half of CFY stood at Rs 5,631.13 Cr (20.37% of the ACP target) as compared to credit disbursement of Rs 8,080.21 Cr (34.23% of ACP target) as at the end of first half of FY 2015-16, which indicates decrease of Rs 2,449.08 Cr (30% decrease in disbursement of credit).

Owing to lack of adequate credit disbursements during the H1 the Credit Deposit Ratio of the State has declined by 1.47% (from 49.11% as on 31.3.2016 to 47.64% as on 30thSeptember, 2016).

Gross NPAs of the banking sector in the State has increased from 5.39% as on 31st March, 2016 to 7.08% as on 30th September, 2016.

Forest Sector

The forest sector has also suffered loss due to Hartals/Curfews in valley as transportation of timber from forest to various sale depots was not possible due to restrictions on movement of vehicular traffic. Several buildings/ check posts of the department at various places have been burnt by the miscreants viz. Check Post at Sumbal Kenura, Akura, Kirkadal, Bijbehara and Khanabal. In addition to these, 02 Forest Depots at Harnag and Shalteng suffered damage due to fire incident during the turmoil.

Thinning forest cover in Kashmir – Photo: Shams Irfan

The State Forest Corporation (SFC) has been severely affected due to hartals /curfews in the valley. The transportation of timber by SFC due to restrictions on the movement of vehicles from Forest to Sale Depot got badly affected. From 01.04.2015 to 31.10.2015 last year, 11.30 lakh Cft of timber was transported from the Forest to the Sale Depot in Kashmir valley whereas during current year (2016-17) SFC could transport only 3.80 lakh Cft.

Auctions/Sale of timber from July, 2016 onwards could not be conducted by the corporation. During 2015-16, from 01.04.2015 to 31.10.2015, SFC auctioned/sold 11.04 lakh Cft timber in Kashmir valley whereas during the same period from 01.04.2016 to 31.10.2016, SFC could sell only 3.71 lakh Cft. A comparative analysis of the revenue generation made by the corporation reveals that revenue generation level has declined considerably in Kashmir Division from Rs 57.40 crore during 2015-16 (01.04.2015 to 31.10.2015) to Rs. 23.89 Crore during the same period of 2016-17. As a result, salaries to the employees of SFC are pending for 2 months which works out to Rs. 17.00 crore

During 2015-16 (Q1 & Q2), 1.34 lakh plants were planted on 242 hectares against which 1.19 lakh plants were planted on 209 hectares during 2016-17 (Q1 & Q2).

Under Compensatory Afforestation Fund Management and Planning Authority (CAMPA), 6.05 lakh plants were planted on 2264 hectares during first two quarters (Q1 & Q2) of the financial year 2015-16 as against plantation of 4.35 lakh plants on 1009 hectares during the 2016-17(Q1 & Q2).

Under Social Forestry wing, 1.19 lakh plants were planted on 115.03 hectares during first two quarters (Q1 & Q2) of the financial year 2015-16 as against plantation of 1.37 lakh plants on 137.6 hectares during the 2016-17(Q1 & Q2) and under CAMPA, 1.65 lakh plants were planted on 243 hectares during first two quarters (Q1 & Q2) of the financial year 2015-16 as compared to only 0.24 lakh plants planted on 83 hectares during the2016-17(Q1 & Q2).

Under Soil Conservation, 0.76 lakh plants were planted on 1.09 hectares during first two quarters (Q1 & Q2) of the financial year 2015-16 as against plantation of .90 lakh plants on 0.63 hectares during the 2016-17(Q1 & Q2)

The forest department as a whole has recorded level of expenditure Rs 8.28 crore during the first two quarters of the year 2015-16 as against Rs 8.04 crore during the same period of the FY 2016-17 which indicated that expenditure level has been less by 3% during the first two quarters of FY 2016-17 as compared to Q1 & Q2 of the year 2016-17.


The business in respect of retail sale of consumer goods/fertilizers, as reported by the cooperative department, has been affected due to turmoil in the valley as comparative analysis of physical achievements has gone down during first and 2nd quarter of the year 2016-17 as compared to first and 2nd quarter of the year 2015-16. The level of sale of goods for the first quarter of the year 2015-16 was Rs 13.36 crore and 2nd quarter was Rs 44.51 crore. The corresponding figures for the first and 2nd quarters of the year 2016-17 are Rs 13.15 cr and 36.56 cr respectively while as sale of fertilizer has gone down from Rs 21.80 crore in the first quarter of the year 2015-16 to Rs 15.60 cr in the first quarter of the year 2016-17 and in 2nd quarter of the year 2015-16, the sale was Rs 53.17 cr as against Rs 32.48 cr in 2nd quarter of the year 2016-17.

Housing & Urban Development Sector

The level of expenditure in respect of various sub sectors/schemes of Housing & Urban Development Department has been recorded at Rs 356.52 lakh in Q1& Rs 372.77 lakh in Q2 of the year 2016-17 as compared to Rs 647.40 lakh in Q1 & Rs 3358.27 lakh in Q2 of the Financial year 2015-16. The comparative analysis reveals that a decline has been recorded in the expenditure level by 45% in Q1 and 89% in Q2 during the year 2016-17.

Community Tapping: Locals blame that areas around these taps have become source of water borne diseases. This year the Sonawari belt saw out break of Hepatitis-B. Interestingly there is no primary health centre in the area. The doctors who visited these villages, besides other things advised locals to drink boiled water. “We have to go to Sumbal hospital or Pattan for the treatment,” says Showkat.


Under PHE Sector, the expenditure for the first two quarters (Q1 & Q2) of the year 2016-17 has been recorded at Rs 11488.61 lakh (9.53%) including CSS Rs 8035.40 lakh (69.94%) and Loan Rs 359.47 Lakh (3.13%) as against Rs 9490.96 lakh (12.41%) including CSS Rs 7126.62 lakh(75.09%) and Loan Rs 636.58 Lakh (6.71%)during the first two quarters (Q1 & Q2) of the year 2015-16. The outlay for these quarters were Rs 120523.12 lakh and Rs 76455.78 lakh for the years 2016-17 and 2015-16 respectively.

Against the target of coverage of 375 habitations during the 2016-17, only 13 habitations have been reported to have been covered ending 2nd quarter of 2016-17. While as the coverage of schools was 32 against the target of 339 schools for the year 2016-17. The population to be benefitted during 2016-17 was targeted at 2.00 lakh souls against which only 15 thousand achievements has been recorded upto 2nd quarter. Nil achievement in respect of number of hand pumps installed has been reported by the department against the target of 672 Nos.

Under major and medium irrigation sector, a target of 3428 hectares was set for the year 2016-17 against which only a potential of 195 hectares has been created upto2nd quarter of the year 2016-17 while as under minor irrigation sector, 9505 hectares of potential has been created against a target of 25842 hectares.



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