Experts predict situational turbulence’s long-term impact on J&K economy
Srinagar, Aug 04: The current uncertain situation in Kashmir caused by troops build up and the government directions asking the pilgrims and tourists to leave Kashmir shall have a long-term impact on the economy of state, warn experts.
“Kashmir being a dependent economy, with imports far exceeding its exports, the current suspicious situation has forced the people to prepare themselves for a long spell of insecurity. An invisible disruptive element has set in the economic system which shall have dangerous socio-politico and economic results,” said Prof G M Bhat, Head, Department of Economics, Central University of Kashmir.
The consumerist and dependent status of the economy of the state is born by the fact that it imported goods worth Rs 58,050 crore in 2017-18 where as its exports were only of Rs 30,406 crore.
The (induced) end-user nature of the society shall have tremendous shortfall of essential commodities in the immediate, and economy will suffer in the long run because of the existing uncertain situation, said Prof Bhat, also heading the School of Social Sciences at Central University.
He said Kashmir economy has witnessed many disruptions in the past decades of armed conflict in the form of the long spells of government imposed curfews, restrictions, separatist stimulated general strikes and the devastating flood of 2014. But it continues to remain afloat.
“However the invisible hand in the current situation is disrupting the economy here,” he said.
The expert referred to the Governor Satya Pal Malik’s recent assertion that Government of India has not so far informed him of any step at changing the constitutional position of the state.
“One can only infer that uncertainty shall prolong thus opening up the gates for disruption in the economy,” Prof Bhat said.
The business shall come to its lowest ebb, he warned adding “the transactions in all the business activities will recede and the income generating units will be shattered.”
The economist’s depressing forecasts are supported by the facts that services sector and the manufacturing sectors, the main contributors of J&K’s economy (86% cumulatively), both shall be affected the most.
The two sectors are the main job providers in the state employing 10.84 lakh men and women.
The situation has also affected the transitory upward trend in the sales of products on the festival of Eid also, the economist said.
People have been resorting to desperate purchases of essential commodities in Kashmir over the past few days and many a warehouses have exhausted their stocks
“In the current confusing situation where an average person’s foremost priority is the survival, the economy takes a back seat,” said a Nasir Hamid, a businessman from Srinagar.
He said the economy shall be shattered in the long run.
“The tourism has already been smashed by the government advisory in which it asked the tourists to leave Kashmir. Constructions, one of the main drivers of Kashmir economy, and the development projects shall be badly hit by the government actions,” he said.
Even if the situation recoils to its earlier position, the economy will take a lot of time to recoil, he said.