Four years ago, on August 5, 2019, Article 370 of the Indian constitution was abrogated. Article 370 was a temporary provision that enabled a separate constitution for the state of Jammu and Kashmir. It was created in the specific historical context of the partition of India and the territorial conflict between the two post-colonial states, India and Pakistan.
Over the years, there was considerable discussion on whether Article 370 had outlived its utility. There were concerns that its continuation in Jammu and Kashmir was hindering the fundamental rights of minorities and the vulnerable such as women and children.
The abrogation of Article 370 allowed the application of all provisions of the Indian constitution and other progressive legislations to Jammu and Kashmir. Further, the state of Jammu and Kashmir was bifurcated, and the Union Territory of Jammu and Kashmir (J&K) and the Union Territory of Ladakh were created.
At the time of the abrogation of Article 370, there was considerable speculation that the move would result in a sharp spike in hostilities between India and Pakistan and the whole region would be engulfed in violence. The experience of the past four years has been to the contrary.
It is a little too early to speculate on the economic consequences of the abrogation of Article 370 in August 2019. As Professor Durgesh K Rai has noted, the abrogation was followed by the global Covid-19 pandemic in early 2020, which constrained the Indian government’s ability to implement quickly numerous policy measures to rejuvenate the economy of J&K.
Nonetheless, in the post-pandemic phase, there has been a significant spurt in the economic activity in J&K.
The perception that overall terrorist incidents have declined contributed to increased tourist traffic in J&K. It was estimated that an unprecedented 18.8 million tourists visited J&K in 2022, the highest number in 75 years. The spurt in visitors created new employment opportunities in the tourism sector and allied activities such as transportation and hospitality.
Over the past two years, there has been a rise in hotel construction and an increase in paying-guest accommodations in J&K. The tourist infrastructure is also getting renovated.
To reduce congestion in popular tourist areas and offer travelers a wide array of experiences, about “75 new destinations, 75 Sufi/religious sites, 75 new cultural/heritage sites and 75 new tracks” are being developed by the government as a part of the ‘Tourist Mission” initiative.
In order to encourage “film tourism” in picturesque J&K, a Film Policy-2021, with provisions such as a time-bound single-window permission mechanism, financial incentives, easy access to transport infrastructure and revival/upgradation of cinema halls, was also approved.
There has been a significant increase in budgetary allocations to the tourism sector. Given the improvements in tourist infrastructure and government initiatives, the number of visitors to J&K will further increase in the coming years.
In the recent past, there was a 55% increase in agricultural exports from J&K. Apple cultivation contributes significantly to the economy of the union territory, and it accounts for more than 75% of total apple production in the country.
While apple production has increased, there have been challenges in terms of fluctuations of prices in the market yards. In order to overcome such challenges, an “Apple Cluster” is being established in Shopian district. This cluster will facilitate value addition in proximity to farms and enhance branding and marketing efforts to compete in international markets.
Simultaneously, the floriculture sector is poised to take off in the region. Medical plants like lavender from J&K are much sought after in international markets. The purple revolution initiative boosted the cultivation of lavender cultivation in the past few years.
Similarly, an aroma mission has promoted the cultivation of crops such as lemon grass, rosemary, rose and wild marigold. In the past two years, there has also been a spike in the production of saffron.
There have been steady improvements in the handicraft sector. To facilitate easy access to financial resources for artisans and weavers, a special credit-card scheme’ was launched in 2020.
Two years ago, the central government launched the Karkhandar scheme with an aim to revive languishing crafts through skill upgradation by imparting new techniques and improving the earnings of the artisans. The export of handicrafts, such as shawls and carpets, from J&K almost doubled between fiscal years 2021-22 and 2022-23.
Massive infrastructure projects are being operationalized in J&K. Indian Railways is connecting the Kashmir Valley with the rest of India. Thus far, the railway line has been operationalized between Jammu-Udhampur-Katra in Jammu region and Baramulla-Banihal in the Kashmir Valley. The project includes construction of the world’s tallest railway bridge on the Chenab River in the Himalayas.
In addition, massive road construction projects have been initiated, including Zojila Tunnel, Asia’s longest, which will ensure all-weather connectivity between Kashmir and Ladakh. The operationalization of the railway line and the new road projects will fundamentally alter J&K’s economic interactions with India and with the outside world.
In terms of foreign direct investments, the EMAAR group, a Dubai-based firm that operates in multiple countries, is constructing a multipurpose tower and a shopping mall in Srinagar, Kashmir. The project is one of the first investments by a foreign company in Kashmir. In May, the Third G20 Tourism meeting was successfully organized in Srinagar, which showcased the tourist potential of J&K.
In post-conflict situations, such as J&K, sustainable peace requires wide-ranging economic and political actions. Despite the challenges brought about by the pandemic, several economic and infrastructure initiatives are being implemented quickly in the union territory.
However, the future trajectory of peace and prosperity in J&K will be impacted by Pakistan’s actions as well. It is important for the international community to prevail on Pakistan to refrain from supporting terrorism and initiating irresponsible actions in the region.
After all, sustainable economic growth and successful completion of India’s infrastructure projects in J&K will enable India to project power to its north, which is also in the interests of New Delhi’s strategic partners.