Weather Costs

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For the last three quarters, everybody was hopeful that the devastation wrecked by the unprecedented September 2014 floods would pave way for an elaborate reconstruction and rehabilitation plan. Regardless of the costs it entailed in public and private infrastructure, the main brunt of the crisis was taken by people who were otherwise on the margins of the society. Tens of thousands of the livelihoods were washed away and, in certain areas, in Sonawari belt, there are habitations that have still their agriculture land submerged.

 Insurance companies, mainly the Bajaj Allianz, disbursed around Rs 1500 crore and it helped the people, mostly in business, and the ‘creamy layer; to reconstruct and repair their homes and the businesses. Governments at the centre and in the state, chipped in, and is yet to record an outgo of Rs 1000 crore. As the state government is reportedly chasing the central government for approving part of the memorandum that Omar Abdullah government submitted, the only face-saving so far is the reported approval to US $ 250 million low-cost grant by the World Bank. Put together, the government has not been able to even manage to pump in even 10 percent of the estimated losses that J&K suffered.

While the weather is ideal to get as many tourists as possible to Kashmir from the scorching heat in the plains, it is simply not happening because most of the existing infrastructure in the hospitality sector is still under repairs. Even if it happens, it still would help a section of the population.

But the worst casualty of the freak weather is the agriculture and horticulture, the main bread and butter of Kashmir. Though the vast swathes of paddy fields have already been converted into apple orchards, even in the Valley’s main rice bowl in south Kashmir, the massive raining has delayed the season. There is the least chance of Kashmir producing the quantum of rice, it recorded last year.

Early fruits like cherry have taken a huge hit. Almonds were caught during flowering by rains. Now, Apple is gradually emerging as the major casualty of the season. Apple failure will mark the beginning of a major crisis that will have a severe cascading impact on the economy. It actually has started. Defaults in private sector, primarily because of floods and now by the crop failure would add to the sustainability of financial institutions, especially the J&K Bank that has taken a hit in the plains in last two financial years.

 In such a situation, the policymakers will have to exhibit caution and understand the costs its interventions or inertia can have. It will have to address certain key concerns and convince Delhi that while states with better tax revenue can manage the lack of follow up to the sweeping initiatives like doing away with Planning Commission, J&K may not be in that position. J&K’s tax revenues have also taken a huge hit because of floods. The government must increase its spending and take flood-devastated rebuilding and rehabilitation as the top priority. Part of the plan funds must unfreeze so that spending improves. Kashmir has already lost part of the working season to the weather conditions.

Any delay in improved spending and rehabilitation will cost Kashmir hugely and has the potential of impacting the credibility of a political set up too.

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