While the rest of the world is discussing the coronavirus pandemic and the possible economic slowdown due to it, Jammu and Kashmir is preparing for yet another lockdown — this time due to the disease.
The coronavirus pandemic has caused panic in Jammu and Kashmir, as it means another spell of suffering. For an economy that has already collapsed, the ongoing shutdown can end hopes of an economic resurrection.
The Kashmir Chamber of Commerce and Industry (KCCI) has said that businesses had suffered losses of about Rs 18,000 crore due to the clampdown following the abrogation of Article 370.
“We have already suffered financially due to recurring lockdowns,and there is a need for capital infusion. Our survival is solely dependent on the revival of economy,” Sheikh Aashiq, president of KCCI, said.
Aashiq added, “Our delegation met the Union finance minister Nirmala Sitharaman on 15 March in Delhi. We submitted a report to the ministry, which stated that businesses cumulatively lost around Rs 18,000 crore. The finance ministry has assured us of a comprehensive revival package that will give a boost to businesses in the Valley. We are very optimistic."
This year, Kashmir saw a harsh winter, and the Valley remained covered in snow for about four months. There is no rabi harvest in the region due to the harsh weather.
An economics graduate studying in the Kashmir University, said, "People in Kashmir are used to consuming things economically. But it is difficult for a population of around eighty lakh to sustain itself in a lockdown for such a long time."
Tourism contributed over 5 percent of the GDP of the erstwhile state of Jammu and Kashmir. The situation since 5 August, 2019 has led to large-scale losses.
A high-ranking official said, “In 2018, more than eight lakh tourists visited the Valley, while up to July 2019, more than five lakh tourists had arrived. However, the lockdown may have cost the Valley’s economy around Rs 100 crore.”
However, the official added, “Since tourism sector all over the world is in recession due to the current health emergency, we cannot complain about our losses right now.”
A similar situation exists for the agricultural sector. Official reports reveal that the apple harvest for 2018-19 was more than the previous year’s yield. However, most of the harvest has either been left to rot in the fields, or has been stuck in supply trucks. All components of the agricultural sector have been affected, including horticulture, floriculture and orchards.
Haseeb Drabu, former finance minister of Jammu and Kashmir, said, “The current lockdown will damage the economy of Jammu and Kashmir more than any other state of Union Territory. As domestic markets are closed, people can't sell their products or crafts."
Drabu further said, "The economy will also be adversely affected by the loss of income for daily wagers, reduced industrial production and business crashes. Infusion of capital has become impossible."
Due to the disturbed law and order situation, the government has been unable to attract investors.
The Centre has proposed a Budget outlay of over Rs 1 lakh for the Union Territory of Jammu and Kashmir for 2020-21. However, there was no mention of any revival package.
On this, Drabu said, "This Budget does not seem grounded in the reality of Kashmir. On the expenditure side, there are pending liabilities and payments, which makes the Budget operationally impractical vis-a vis Kashmir."
Another cause for concern was that banks gave no concessions to debtors during the seven-month lockdown. It was only on 29 March that several banks, including the J&K Bank, announced a three-month moratorium on term loan installments following an RBI directive.
Ayaz Bhat (name changed) sold his house to repay loan installments to the Jammu and Kashmir Bank. “I had taken a huge loan of Rs 50 lakh from the bank to establish my hotel business. I had no option but to sell my house," he said.
Drabu, who had earlier headed the J&K Bank, said that the moratorium should have been extended to those affected by the lockdown imposed ahead of the abrogation of Article 370.
So far, 27 cases of COVID-19 have been reported in Kashmir. If the government allows for testing at private clinics, compensating for the tests will add to the government's financial burden.
Updated Date: Mar 30, 2020 22:16:01 IST