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In ICU, on ventilator support — businesses in Kashmir gasping for breath!

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Continued disruptions since Aug 2019 have led to loss of livelihoods big time

Like in other parts of the world, the pandemic has impacted every aspect of social life in Kashmir as well. However, the growing unemployment and loss of livelihoods have surfaced as a great challenge to society here. Due to the consecutive lockdowns, Kashmir has lost most of its businesses, causing drastic unemployment in every sector.

Trade and industries like tourism, transport, et al used to be one of the important sources of employment generation in Kashmir. However, due to the situation caused by the pandemic, hundreds of thousands of people affiliated with these industries have either lost their employment completely, or got huge income deductions. It is not only that thousands of people lost their livelihood in this pandemic, but those who passed out from the educational institutions and were readying for the job market, are also facing problems in finding meaningful engagements. Moreover, a large number of people who would work in various other countries in the pre-Covid era have also lost their jobs after the pandemic hit those countries. Many companies also laid off staff soon after the outbreak of the Covid-19 early last year. Those who lost jobs came back, and they too are now jobless here.

In such circumstances, the experts say even the government cannot do much to help the people because the brunt of the pandemic is huge and vast, and thus the affected people may have to face the repercussions of this economic meltdown for a long time. They say the growing unemployment together with and lack opportunities would push people to poverty.

As if this was not enough, the unemployment and loss of livelihoods have its implication beyond the economic crisis. In some cases, it draws an adverse impact on the physical and mental health of the affected people.

To gauge the situation in terms of growing unemployment in the Valley, KASHMIR IMAGES spoke with several concerned people and experts. Here are the excerpts:

Abrar Khan
Chairman, Jammu Kashmir Economic Confederation

According to our estimate, Kashmir has faced 1.25 lakh job cuts in the general trade market during the past one-and-half years. J&K Economic Confederation has done a comprehensive survey to find out the impact of the Covid on the livelihoods and employment of the people, and we did find that there have been job cuts in every sector of the trade and industry in the Valley. The survey has brought some astonishing figures to us in terms of loss of livelihoods. For example, in our tourism industry alone, 65,000 people have lost their jobs due to the situation caused by the pandemic lockdown.

More than 45,000 jobs were lost their jobs in the cottage and other small-scale industries (SSIs). Similarly, 15,000 people have lost their jobs in the IT sector. Even, strangely there have been layoffs of approximately 15,000 teachers in the education sector as well.

The transport industry is the worst hit with an estimated annual loss of Rs 1200-1300 crores. Consecutive lockdowns since August 2019 have rendered more than 19,000 people affiliated with this industry jobless. As far as the transport industry is concerned, we have as many as 780 busses, 2,500 minibuses, 18,000 taxis, and 12,000 auto-rickshaws in the Valley. Constant lockdowns have left the owners of these vehicles in pathetic condition. On one hand, they have lost earnings and on the other hand, they were forced to spend money on the maintenance and for updating of documents like insurance, etc. Most of the owners have bought their vehicles on bank loans and they are forced to pay interests as well even though they have not earned much for more than two years. Many people affiliated with the transport industry are on the verge of starvation. In some cases, people have sold out the accessories of their vehicles to ensure their families don’t sleep on empty stomachs.

Be it the post-August 2019 situation or the Covid lockdowns, the general trade and industry in Kashmir have met huge losses.  Even our capital has drained out during the past two years.

For example, some business units have retained their skilled staff despite the uncertainty and the losses. This has caused the loss of capital. As if all that was not enough, most of the traders and industrialists have fallen prey to the debt trap. A large number of traders have become bankrupt.

For the revival of their businesses, they need capital help from the government. Apart from government measures, ruined businesses can be helped out at the local level as well. Let the banks come up with a helping hand to these traders. Banks should not impose strict rules and regulations on these already stressed businesses. Banks must understand the situation that trade and industry are facing due to the situation caused by the pandemic. They must at least abide by the recent RBI circular in which they have been asked not to stress traders beyond a limit in terms of the recoveries of the loans.

J&K Bank should play a handholding role in the stressed businesses in these challenging times. This bank has been a principal banker for the past 70 years. This bank has grown up with the help of the business and industries of J&K. Even in this pandemic, the bank has earned huge profits. In the first quarter of the current fiscal year, the bank has made a profit of Rs 331 crore. Thus, it should also help businesses in J&K in these tough times.

Government must also realize the situation the general trade is facing these days. It must not be forgotten that general trade has always been the highest revenue generator for the government in terms of taxes. Traders have been the largest contributor to the GDP.  Now it is the responsibility of the government to come up with some reliable measures for the revival of the businesses.

Parvez Ahmad Bhat
President, Kashmir Artisans Rehabilitation Forum (KARF)

The pandemic has rendered Kashmiri artisans completely jobless, and this is for the first time in history that Kashmir Art has lost its domestic as well as the international market in terms of sales of the products. There are zero domestic or international orders for these products at this point in time. I can tell you with great responsibility that more than three lakh people affiliated with Kashmir Arts have lost their livelihoods because of the impact of the pandemic. These people include artisans, laborers, washermen, shopkeepers, wholesalers, exporters, and so on. There is no doubt that families of artisans and others who are concerned with this trade are facing acute poverty after they lost their livelihoods.

They are facing this situation for the first time in history. This trade remained safe even in the conflict situation of the past three decades. Since most of the artwork such as the making of papier-mache, shawls, carpets, rugs, namdas, crewel embroideries, and so on is done inside the homes, shutdowns and curfews, and other uncertainties could not disturb this line of work. Artisans would do their job even when there was the worst kind of uncertainties and agitations going on in the Valley.

However, the pandemic has badly hit these centuries-old crafts. The situation caused by the pandemic across the world has snatched our market from us. We have no more orders for products from any part of the world now.

Similarly, earlier there would be exhibitions in various parts of the country and even in Europe and the Middle East where handicraft goods from Kashmir used to be sold in large quantity. But there are no more exhibitions since the outbreak of the Covid.

Likewise, our trade has lost its local market as well because no tourists are coming to Kashmir since the pandemic hit the world. Some artisans had continued their production last year after the Covid started. They had thought the disease would go away in few months; but today the situation is such that nobody knows how long the pandemic and its impact on businesses would continue. These artisans ended up with a huge stock of the unsold inventory at their homes. This has further increased their worries. Many of them even lost their raw material because they could not process and use it in time. Most of the artisans and the people affiliated with the trade are in debt. They had borrowed money from the banks for their business.

Ironically, many of the artisans who spent their entire lives in this line of work are now trying to search for other jobs. I fear that if the situation continues for a long time, they would not be able to switch back to their traditional work, and eventually, we would lose the 600-year-old heritage crafts.

This is the time when government must come up with some creative measures to safeguard the artisans and the heritage crafts. As per our estimates, Kashmiri artisans have thousand of crore worth of unsold goods with them at this point in time. To begin with, the government should come forward to purchase these goods and it will eventually help the artisans to revive their work. Government can use these goods in different government offices and intuitions across the country. Why can’t MLA hostels and other government houses in different states have crewel curtains and carpet floor coverings?  Similarly, the government must come up with loan-waivers for the artisans.

Muhammad Yasin Khan
President, Kashmir Traders and Manufacturers Federation (KTMF)

There are more than three lakh shopkeepers across Kashmir. On average two people are affiliated with one shop and by this estimate, we have six lakh people including the salesmen and helpers whose livelihood is dependent on shopkeeping. According to our rough estimates, 15 percent of this workforce, mostly the salesmen, lost their jobs since the outbreak of the pandemic early last year. We can say 90,000 people who worked in shops got unemployed due to the situation created by the Covid. They lost their jobs simply because the owners were unable to pay their salaries as they have met huge business losses due to the pandemic. I know many shop owners who have not been able to pay salaries to their employees for the past several months and they are now trying to pay them in installments.

I fear worst might happen in case the pandemic prolongs further. Since some experts have warned about the third wave of the pandemic in coming weeks, I fear we may have to face more challenging situations. More people working at shops may lose their jobs.

We are going through a very tough phase. A dominant majority of the shopkeepers are earning very little and living hand to mouth. They are also in debt trap. On one hand, they have minimum earning and on the other hand, they are supposed to pay interest on the money they have borrowed from various financial institutions. Many of the shopkeepers are declared NPAs by the banks.

As head of the KTMF, I can tell with authority that some shopkeepers want to get rid of their businesses. They want to sell off their shops they get out of the continuous losses and the debt trap of the financial institutions. Ironically, there are no buyers to these shops and properties.

We indeed expect the government to come forward to bail out the ruined businesses, but we don’t see this as an appropriate time to give our suggestions in this regard. Simply because we have no idea how long this pandemic goes and what would be its ultimate impact on our businesses. We feel helpless at this time. May Almighty help us to get out of this crisis that we have never faced in the past.

Ejaz Ayoub
Economic Analyst

The growing unemployment caused by the pandemic will surely affect our overall economic growth. The first impact will be in the poverty profile of our population. Before the Covid era, we had around 10 percent of the population living under the poverty line compared to an all India average of over 22 percent. It had taken us decades to get most of our population out of abject poverty. But these consecutive and continuous income and livelihood shocks can start reversing all the gains in poverty alleviation at a rapid pace. Though nobody can predict the exact figures about the possible decline, however, this is for sure that more people would be pushed below the poverty line due to the situation caused by the pandemic.

Since poverty has its repercussions on other socio-economic aspects of a society, people will have to face tremendous challenges in coming days. The unemployment and loss of livelihoods will have a direct impact on the life expectancy of the people; because poverty renders most of the people unable to live a comfortable life with proper nutritional food and access to a good healthcare.

Second, it may lead to a decline in our literacy rates. With consistent effort during all the previous decades, J&K had succeeded to raise literacy levels at par with the national average. However, this too might take a serious hit because of the income shocks to the families. The lack of proper income and unemployment would force many students to leave their education halfway. Their parents would prefer them to start doing something for living rather than spending money on their education. Our literacy rate may get negatively impacted in the coming years and eventually most of our human resources in the future might lag behind in employability, skill profile and education levels.

Thirdly, with the repeated restructuring done, the business borrower accounts might take a very toxic shape. Many people who have already borrowed money from banks might get further into a debt trap. Self-employed people, traders, transporters, and so on would face the debt crisis with more severity this time.

To ensure the damage control to some extent, Union and the UT governments must come up with some fiscal measures in addition to existing monetary help. For example, budgetary provisions under MGNREGA scheme needs to be enhanced to support dwindling rural economy. Similarly, the government should work on providing debt relief in order to help the businesses which are facing consistent losses due to the situation created by the Covid lockdowns.

Our traders and transporters, who would employ lakhs of people, have been bleeding financially since August 2019. It’s the government’s constitutional as well as moral responsibility as a welfare state to rescue the businesses. There are around Rs 40,000 crore business loans outstanding in J&K as on date. The annual interest cost for this amount arrives at around Rs 3000 crore. One year moratorium and bearing of this interest cost of Rs 3000 by the governments will provide a much-needed breather to the business community. They can focus on revival with a much better mindset and less burdened obligations.

It would be a vast measure if the center and the UT governments share the responsibility of paying these Rs 3000 crore to the banks so that people would be able to revive their businesses. It will also help them to restore the employments and eventually the government will also start getting more taxes with the improvement of the businesses. Since UT has a sizeable budget of more than Rs one lakh crore, it should not be much of a hassle to pay half of the interest on the existing business loans for a year. Spending this money will ensure the revival of businesses in J&K.

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