The most distressing part of the crisis is not only that the entire business is smashed but the debilitating impact it has on the purchasing power of a common man. With most of the small economies in the periphery devastated, showrooms will revive but what about the businesses, reports Tasavur Mushtaq
On September 3, 2014, Javaid Ahmad returned from Delhi after being there for around fifteen days. He had gone to receive a consignment of imported ladies wear and some high-end purchase, particularly for brides. A resident of Bemina, Srinagar, Javaid deals in exclusive ladies wears for the last two years. Prior to this, Javaid who has done M Com from Kashmir University was senior accounts officer at HMT, wherefrom he opted for voluntary retirement, as his company was almost defunct.
When he left HMT, the company had paid him around 10 lakh rupees. Javaid, with the help of his in-laws, who live in Dubai, invested the money in setting up a business of selling exclusive ladies wear. The response was good.
A day later, on September 4, 2014, Javaid along with his college-going son Ahmad, stored a part of the goods in his shop in Bemina. Rest he kept in the drawing-room of his house in the same locality. It took father-son duo, three days to manage all this. Javaid was hopeful of good business as it was the peak of marriage season in Kashmir and Eid was approaching.
On September 7, 2014, water inundated many areas including Javaid’s house-tuned-godown and his shop. Two weeks later, when the water started to recede, Javaid visited his house and shop. All he could recover was heaps of muck and silt. Everything else was lost to floods.
But Javaid’s story is not an isolated incident. Ali Muhammad and his brothers had land in Rawalpora. One day the family decided to sell it off and purchase more land at some other place. But Ali had different plans. With around 1.5 crore in his hand, he instead invested all the money in establishing the diagnostic centre at Karan Nagar. Till September 7, 2014, Ali was a happy man.
But the recent flood has turned his dream into rusted metal. Ali has nothing to work for and his family is worried about his well being. His mother who is in her late eighties has now offered her gold ornaments to see her son ‘happy’ again.
Every evening we have a report that against normal disposal of 250 tons before floods, SMC removes 2000 tons of garbage. Latief, a businessman who operates from Goni Khan Lal Chowk says, “It is not waste that SMC collects, but our shattered dreams and broken hearts.”
When Latief visited Bajaj Allianz office with his claim form he looked lost. Accompanied by his brother Altaf, who told Kashmir Life that before few days flood-hit valley, Latief had received lehengas and other wedding suits worth fifty lakhs and now what is left is “addition to the garbage figure of SMC.”
Srinagar’s main attraction and counted amongst the famous tourist hotspot of the Valley, Boulevard Road situated on the banks of Dal Lake, today presents a deserted look. The handicrafts sector is in shambles. The ruined handmade carpets, Pashmina shawls, crewel embroidery, leather works, ari work reflect Kashmir’s economic devastation. What had been hand-spun fine cashmere wool to make Pashmina shawls are now just muddy bundles, waiting to be disposed off. The tragedy struck when Dal burst its banks and scores of carpet showroom, once known for their fine produce were destroyed in a jiffy. Established over the years by generations of family involved in this trade, the future they say appears bleak.
“My earnings of four decades are now rubble. The loss is incalculable. Who knows how much time it will take to recover, leaves alone the concept of growth,” said Bashir Ahmad Dar, who owns showroom on Boulevard.
The loss is not only what flood did to shops and business centres, but it has a long-lasting impact on the confidence of tourists. From last few years, record-breaking tourist arrivals had boosted the industry.
According to the report, all bookings for airlines and hotels up to Oct 15 have been cancelled. The reports reveal that tourist arrivals in the state between September and November, both from India and abroad, have been severely affected. “Those who had booked for winters are watching the situation,” said an agency report.
Taxi drivers, whose source of income is directly dependent on the arrival of tourists, are sceptical about their future. Bilal Ahmad who expanded his fleet of vehicles from one taxi to five is shattered and sits quietly in the corner of his kitchen in the old city.
He had taken loan for all the vehicles and was paying regular instalments up to August 2014. “Where from I will pay the instalments for vehicles mortgaged to Bank,” says Bilal.
After relatively less tourist foot-fall between 2008 and 2010, because of political turbulence, people associated with this sector were hopeful of making recovery in the current season. “But the flood has shattered our dreams,” says Bilal, who is now worried about his children’s future as he cannot afford to pay their school fees.
The loss to tourism infrastructure is worrisome. Most of the houseboats in Dal have suffered extensive damage and hotels have become ‘unsafe.’
“Hotels near the lake have suffered extensive damages. In fact they have become unsafe, says Abdul Aziz, a hotel owner in Srinagar. Aziz adds that “It might take several years before things return to their pristine glory and I believe the revival of the tourism industry is now an uphill task.”
Experts say that “it is all the more difficult in states where the economy is heavily dependent on tourism-related sectors like trade, hotels, eateries and transport.” Pertinently the valley is estimated to have earned Rs 1,520 crore from trade, hotels and restaurant services in the current season (2013-2014), but there are serious question marks on the future. The loss according to estimates to the tourism industry is around 1700 crore, while the state-owned facilities like hotels have suffered a loss of over Rs 200 crore. Chief Secretary, Muhammad Iqbal Khanday said preliminary estimates are that “tourism infrastructure and government residential colonies have suffered losses to the tune of Rs 5,000 crore.
Maharaja Bazar, one of the oldest market places in Srinagar, and a one-stop destination for all marriage related shopping present a sorry picture. It stinks like an open drain. One has to pass through heaps of water-soaked dry fruits scattered on the roadside waiting for SMC pick-up trucks. “We had full stocks for marriage season, now you can see what is left,” said grim-faced Abdul Ahad.
In South Kashmir’s Islamabad town, which was inundated two days prior to Srinagar, traders estimate their losses at around rupees 1000 crore. And adding to their woes, the trader community say that “only 30 per cent of the business outlets are insured while remaining retail outlets are uncovered.”
Gulshan Book Shop at the Residency Road in Srinagar was a treasure trove for Kashmir’s literature lovers. It had around 40 thousand books, ranging from rare books on Kashmir’s history and politics that Sheikh Aijaz, its present owner, had inherited from his ancestors. “Mine is the fourth generation as the business was started by my forefathers. It took generations to collect these books and less than an hour to destroy everything,” says Aijaz. “Besides our Residency road shop, we had a huge collection of around 20 thousand books stored at two different stores in Bemina and Maisuma. Both got completely damaged.”
Aijaz says that these books were worth around 7 crore rupees but priceless in terms of their historic value.
Not only infrastructure and goods, but Kashmir’s apple crop was also washed away by the heavy downpour. “Floods has washed away Kashmir apple’s crop worth Rs 1,000 Crore leaving a devastating impact on growers,” an Assocham report said after an assessment of the crop loss.
With an annual turnover of Rs 1200 crore, production of apple in the state has reached about 1.6 million metric tonnes annually. This sector employs nearly 3 million people directly and indirectly.
“Kashmir apples, known for their taste and juice, have already lost a huge market share to those grown in other north Indian states due to the low prices of the latter variety,” D S Rawat, Secretary General of Assocham said.
Rawat said, “The devastating floods in Jammu and Kashmir have damaged the best varieties of Kashmiri apples that were to hit markets by September-end.”
Besides apple, floods have caused immense damage to Saffron crop. The main source of Saffron, Pampore was badly hit by floods. With floods damaging the new crop, according to reports, the old stock in the retail market has jumped 10 per cent to Rs 210 a gram.
A senior official in horticulture department told Kashmir Life on anonymity that “planting cycle of saffron is about 15 years, after which new planting is done. So, any damage due to the current floods will have a bearing on future crop cycles as well.”
The biggest worry after floods that face traders is that most of them have under-insured their stocks. “Business owners’ for records reveal stocks of 5 lakhs, but actually there is a stock of 20 lakhs. But the insurance company is liable for only 5 lakhs,” said an expert on condition of anonymity.
Many have lost their financial records, making it difficult for them to seek help from banks and other financial institutions. In Parimpora, when surveyor visited the shop, godown and workshop of a timber dealer
Muhammad Azhar whose loss is around 95 lakhs, the first question he faced was, “how can you establish that timber and its products were washed away by the flood.” Spellbound by the query, Azhar now feels that he has lost the chance to have the revival of his business. Though surveyor assured him of help, the query remains unanswered.
According to an industry expert of the valley and social activist Shakeel Qalander, “I see it (losses) at more than double the state’s gross domestic product (GDP).” President of the Federation Chambers of Industries Kashmir (FCIK).
However, according to the state government, the preliminary loss estimates is Rs 1 trillion, while 12.5 lakh families have been affected. Out of this, the business sector has incurred a loss of Rs 70000 crore.
Businessmen in Delhi are sceptical to carry business transactions as they say “we don’t expect to get either their money or their ordered goods anytime soon.”
Delhi is the most important supplier of industrial goods-electrical, electronics, shoes, clothing etc to the Valley and it carries on business with traders on credit. At the same time, it sources a lot of artisanal goods-shawls, carved pieces, semi-precious jewellery-and natural produce with ready cash.
According to people who are well versed with trade activities, “September is a time when the Kashmiri businessmen repay Delhi’s wholesalers and place fresh orders for the winter season on credit. Godowns in Delhi are already brimming with woollen ladies suits, jackets and caps in anticipation of the winter demand.”
Anil Mehta, a jeweller in Chandni Chowk is quoted to have said “People in Uttarakhand haven’t recovered fully a year after the floods, so J&K will also take time. But we are bleeding. Artificial jewellery is an important article of trade from J&K. We were awaiting big consignments for which payments have already been made.”
Besides the loss to the main business holder, the flood has snatched people their livelihoods as they are rendered jobless. “I can’t support my staff under such circumstances when I fear for my survival,” said a businessman of Maharaja Bazar.