Rashid Paul

Inflation burns holes in peoples’ pockets as Kashmir economy slips into depression

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Srinagar, Feb 03: Despite Kashmir economy having slipped into depression, prices of goods and services continue to be on the higher side — a strange phenomena as the severe downturn is always characterized by a significant fall in the prices.

People across different social and economic strata in Kashmir are complaining of general increase in prices of commodities with a corresponding fall in the purchasing value of their money. They say there has been a nonstop increase in the general price index over the past one year.

“I used to purchase a litre of edible oil at Rs 80 to 90 in June, the previous year. But it is now being sold at Rs 120 per litre”, said Abdul Hamid, a class IV employee from Jawaharnagar.

Onion prices have also been bringing tears to customers for the past several months with price for one kilogram reaching Rs 120. However, with the import of this commonly used vegetable by the government to overcome shortage, the Indian produced onion continues to be sold at Rs 70 per kilogram. The cost a kilogram of onion till July last year was between Rs 16 to 20.

Cost of baby milk (powder) has virtually skyrocketed. Says Mudasir Ahmed of the Wani Pharmacy in uptown Srinagar: “Manufacturers of powdered baby foods have increased the price by 20 percent since past one year.”

Medicines, according to Ahmed, have become costlier since implementation of the General Service Tax regime by the government. For instance, Pantoprazole, one of the commonest used drugs in Kashmir, used to be sold at Rs 80 to 90 a year back but today it is priced at Rs 138 for a strip of ten tablets.

Similarly the price of the insulin products required by diabetic patients too has shot up by 20 percent, he said.

Experts say that value of the goods and services in Kashmir has less to do with the bad state of affairs of its economy.

“We have ended up an importing economy where almost everything is brought in from different states of India,” said Prof G M Bhat, who heads the Department of Economics at Central at University Kashmir.

Official figures also substantiate the expert view on the import dependency syndrome confronting J&K. The erstwhile state imported goods worth Rs 58,050 crore from across India in 2017.

Bhat says the Indian industry defines the costs of the products for us. The poor communication network connecting Kashmir with the Indian markets also increases the costs for our consumers, he said.

“The historic communication blockade in Kashmir broke almost every sector of the local economy and incapacitated the local producers. This too has lead to inflation,” said Farooq Amin, a Kashmir-based industrialist.

The August 05, 2019 decision to put J&K under a historic communication gag (in the aftermath of scrapping of its special status under Article 370) also cast a spell over Kashmir economy, leading to a steep fall in output, massive unemployment levels and high inflation.

Its economy has slipped into depression, Prof Bhat, the economist at Central University told this newspaper in a recent interview.

Chamber of Commerce and Industry Kashmir has pegged the business losses to Kashmir economy at approximately Rs 17,900 crores from August to the first week of December last.

“One million people in the organized and unorganized sectors lost their jobs in the post-August scenario in Kashmir,” Prof Nisar Ali, a former Head Department of Economics at Kashmir University informed this newspaper.

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