Kashmir: Post 370A Abrogation Economic Loss stand at Rs 40000 Cr

The report highlights not just the human cost of a year of lockdown but also shatters the myths of economic prosperity that was promised to the now union territories of J&K and Ladakh.


On August 5, 2019, the Government of India revoked the special status granted to the state of Jammu and Kashmir under Article 370 of the Indian constitution.

Almost a year later, a report titled ‘The Impact of the Lockdowns on Human Rights in Jammu and Kashmir, August 2019-July 2020’ has been brought out by the Forum for Human Rights in Jammu and Kashmir. The report is co-chaired by Justice Madan Lokur and Radha Kumar.

The report highlights the trauma people in the state have undergone since August 4, 2019 – the day the state was put under lockdown.

Prime Minister Narendra Modi and Home Minister Amit Shah cited ‘National Security’ as the prime reason for abrogating Article 370. However, this idea of abrogating Article 370 was also backed up by the free-market economic understanding wherein PM Modi had claimed that it would bring stability, market access, predictable laws to Kashmir. Modi and Shah had left no stones unturned in gathering support for the ‘Cause of India’. Political understandings were busted within no time, now the economic argument also seems to be doomed.

The report has also elaborated on the economic impact of post-abrogation measures. Post-abrogation lockdowns was followed by restriction of the internet to 2G speeds in J&K. It also suffered from Covid-19 lockdown and opening up of J&K economy to companies from other parts of the country between August 2019 and July 2020.

Economic Situation of J& K post abrogation:

J&K was one of the better performing states of India before August 2019 both economically and in terms of Human Development Indices (HDIs). However, since August 2019, the state has suffered immensely on economic terms. Kashmir region only has suffered losses worth Rs 40,000 Crore over the past 11 months. These figures were estimated by Kashmir Chamber of Commerce and Industry (KCCI). However, economic losses for the Jammu region is still not studied the report noted.

The report elaborated on the losses for the fruit industry which contributes almost 10% for J&K’s economy. It had suffered badly the industry lost almost 1.35 Lakh metric tons of crop due to restrictions on transportation. The government announcement that National Agricultural Cooperative Marketing Federation of India(NAFED) would buy the crops. This also could not help owing to the same transportation issues. Most apple dealers have also defaulted with banks and this would have domino effects on the economy.

Lockdown of markets, issues in internet connectivity for online payments, non-availability of transportation and rise in cost for the same, monopoly of pesticide dealers, and lack of opportunity to market the crop were some of the major issues faced by the industry.

Read about: UN Sec-General expresses concerns on child casualties in J&K

The report detailed that the tourism industry which contributes around 8% of the GDP of J&K also faced the brunt. According to statistics provided to the Parliament by the government, the number of tourists fell from more than 3,15,000 in 2018 to just over 43000 in 2019 for 5-month period of August to December. Booking was impossible and people were unwilling to visit a highly-militarized region. In addition, the Draft Tourism Policy announced in March 2020 is affecting the Houseboat business adversely which also impacts livelihoods of lakh of people directly or indirectly.

IT and e-commerce based industries have either shifted their base or have closed down services. This has left the localities unemployed. Even the carpet and garment industries, home-based and village industries which depended on online orders have faced the brunt of such drastic measures of keeping a state under lockdown for almost a year. Around 20000 weavers were employed by units to make silk carpets. According to the report, the number of losses suffered by the Transport and Communication industry between August and December 2019 amounted to Rs. 2267 Crores. Militants opposing the decision of abrogation of Article 370 and the bifurcation of the state had banned truck drivers. The truck drivers were banned from collecting harvested apples to distribute it to the Rest of India. Public transportation services including private busses serving the poor were also stalled. Hence, thousands of people associated with the transport industry are in distress.

Figures for the losses by Start-ups, small businesses, and shops are unavailable. However, the report has provided testimonies for the issues faced by these entrepreneurs. It can be inferred from these testimonies that the non-availability of internet connectivity and a prolonged lockdown for over a month have left lakhs of people under immense financial distress.

Newspapers were not published either online or in-print for couple of months post-abrogation of Article 370 . Also, advertisements fell drastically both from government and private players as their circulation was restricted. Also, since criticism of the governmental actions was stifled upon, opinions and content have dwindled which has decreased their readership. The Covid-19 lockdowns have also severely hampered journalism in the region. In a domino effect, journalists – especially the onfield reporters have lost jobs noted the report about journalism in the region. It must also be borne in mind that the New Media Policy announced by J&K administration will further jeopardize journalism and journalists in the region.

Unemployment in J&K 

As of July 2020, J&K’s unemployment rate was 17.9%  almost double the national average. Almost a quarter of educated youth in the region are unemployed. The new domicile rules issued has furthered the chances of unemployment for the people from the region. Under the new rules by Home Ministry under Amit Shah, only people who have lived in the state for over 15 years or have studied for at least 7 years would be considered domicile. Earlier,  the permanent residents of the state were considered as a domicile the report has noted.

Human Rights Violation has been a norm in the most-militarized region in the world for decades now. However, the region has suffered immensely even on the economic front too over the last year.

As the BJP-RSS and Rest of India is all set to mark One year of Abrogation of Article 370, J&K continues to suffer.

Read the complete report here.


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April 2024


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