Dec-22

THE ECONOMIC CRISIS

IN
INDIAN ILLEGALY OCCUPIED
JAMMU & KASHMIR
THE ECONOMIC
CRISIS IN IIOJK

by

Mehr-un-Nisa
Edited by

Altaf Hussain Wani

 CONTENTS
Introduction......................................................................................................................04
IIOJK Economy before Abrogation of Article 370............................................................04
IIOJK Economy Post 5th Aug 2019...................................................................................04
Trade and Tourism............................................................................................................04
Land Grabbing...................................................................................................................05
Torching Public Property..................................................................................................05
Hydro Economics in IIOJK................................................................................................05
Curfews, Lockdowns and Siege & Search Operations....................................................06
Unemployment..................................................................................................................07
Undeclared Internet Shutdowns.......................................................................................07
Agricultural and Horticulture...........................................................................................08
Poverty..............................................................................................................................09
Arts & Crafts Industries....................................................................................................10
Conclusion........................................................................................................................10
 INTRODUCTION
For the last seventy years, Indian occupation has
affected not only social and cultural aspects but
also political and economic aspects in Jammu &
Kashmir. The current economic crisis in IIOJK is
actually a sequel to unrestrained and unjustified
actions by the Indian government in the past.
The last three years in IIOJK has a devastating
impact on the livelihoods of the local populace.
Small businesses and shops in IIOJK are culturally
colonized by the Indian government. The primary
sectors including agriculture, horticulture, tourism,
and the handicraft industry have all been adversely
affected. Many traders have shifted their trading
centers from IIOJK to other parts of India and others
have to find alternative ways to make money during
this difficult time. IIOJK’s economy has lost around
nine billion dollars and three years of development.
This section analyses how the Abrogation of Jammu
and Kashmir Article 35A has impacted the economy
of the Indian-occupied valley, which is in recession
at a high unemployment rate and with industries
collapsing, and thousands becoming jobless.
IIOJK ECONOMY BEFORE
ABROGATION OF ARTICLE 370
Kashmir is a geopolitical and socio-cultural region
with roots that date back centuries. Due to the
conflict, there’s been not only human loss, but also
an economic loss for the people living in Kashmir. The
losses in Kashmir were assessed based on its GDP
in 2017-18. The continuous negative effects of the
conflict in Kashmir have led to many banks having
distressed customers that cannot repay their loans
and are bankrupt. This has created an environment
where a lot of businesses have closed down or are
contemplating closure. Tourism is one of the main
sectors of Kashmir’s economy, but with slowing
tourism and a lack of jobs, it has been broken down
into its various sub-sectors. Tourism encompasses
anything related to tourism: tour operators, travel
guides, hotels, bus service, houseboats, “shikaras”
(boats), adventure sports, and so on.
4
IIOJK ECONOMY POST 5TH AUG 2019
Since the abrogation of Article 370, there has been
a negative impact on Indian Occupied Jammu and
Kashmir’s economy. In the first four months alone
from August to November 2019, that number
added up to around 1.78 crores. This has had a
ripple effect on the state’s economy and has led
to a decrease in government revenue. In addition,
the central government has also reduced the
budgetary allocation for IIOJK. All these factors have
contributed to the current economic crisis in IIOJK.
Most Indian companies were unwilling to invest in
the region as it was perceived as unfit for business.
Acuite Ratings & Research Limited found that about
Rs 270 crore worth per day has been lost because
of the 2019-2020 lockdown across India. A study
by the Institute of Development and Economic
Alternatives has estimated that Jammu and
Kashmir’s loss to unrest is Rs1,500 crore per year.
Kashmir’s share is around Rs750 crore or 0.77% of
India’s GDP since Kashmir contributes 55% of the
state’s GDP. The total IIOJK GDP is pegged at Rs1.3
lakh crore per annum.
TRADE AND TOURISM
The main reason for this is the lockdown imposed by
the central government which has led to a decrease
in trade and tourism. Indian government’s cross-LoC
trade suspension order on April 18, 2019 affected
more than 1700 traders in IIOJK. From 2019- 2022,
India’s occupation of Jammu and Kashmir has led to
more than $7 billion in economic losses.
More than a million people have lost their jobs just
since Aug 2019, including thousands in the region’s
flagship tourism and horticulture industries. The
existing economy in this region is on the verge of
collapse. Local businesses don’t have much hope
for new investments, owing to the fact that it needs
a credible economic policy. Only in the first three
months after 5th Aug 2019, 71 percent of revenue
decline in the tourism sector. The number of tourists
fell from 316,424 in 2018 to 43,059 in 2019 – a
sharp 86 percent decline.

LAND GRABBING
As it is mentioned above that the unjustified actions
by the Indian government in the past led to the
current crisis in IIOJK. In 2008, 800 Kanal of land at
Baltal in South Kashmir was transferred to the Shri
Amarnath Shrine Board (SASB). Much of the Jammu
area is feeling economically deprived because
they’ve lost land rights to Kashmiris.
From 2009-2015, the Indian army occupied
1,054,721 kanals of land in the three regions of
Ladakh, Kashmir, and Jammu. In the next three
years (2015-2018) Indian army illegally occupied
more than 4.3 lakh kanals of land in IIOJK. According
to the former Chief Minister of J&K Mehboba Mufti
51,116 kanals of state land in Jammu province and
379,817 kanals of land in Kashmir and Ladakh are
under unauthorized occupation by the Indian army.
Indian military occupation also includes 1,526
private buildings, 280 government buildings, 14
industrial units, cinemas, and 28 hotels. The Public
Commission on Human Rights in 2005 identified 46
schools and educational establishments occupied
by armed forces.
On 31 December 2021, the Tourism Department of
Indian Occupied Jammu and Kashmir allotted 1,034
kanals in Gulmarg and 354 kanals in Sonmarg, to
the Indian Army as “strategic areas” for the use of
armed forces in the region. The amendment to the
Control of Building Operations Act 1988 and the J&K
5
Development Act, 1970 allowed the authorities to
carry out illegal construction in strategic areas.
Property Damaged during Military
Operations
250
200
150
100
50
0
2021 2022
Property Damaged duri ng Military Operations
TORCHING PUBLIC PROPERTY
The destruction of civilian property is a normal act
by the Indian armed forces in IIOJK. The Indian army
burns down civilians’ homes, forces families to pour
kerosene into their own homes, and set them on
fire after siege and search operations. They also loot
valuables including cash and jewelry of the civilians.
In IIOJK, settler colonialism serves local small
businesses and shops with an official diktat to
hoist the Indian flag over their establishments on
India’s Independence Day. These business and shop
owners were threatened with consequences in
return for not hoisting the Indian flag.
A total of 110,495 private properties have been
destroyed during military operations since 1989. A
total of 657 homes and other public property were
destroyed during military operations in 2020, 130 in
2021 while 196 in 2022 by Indian troops.
HYDRO ECONOMICS IN IIOJK
The International Water Management Institute
(IWMI) has estimated that Indian hydro politics and
policies have deprived Indian Occupied Jammu and
Kashmir of around 6.5 billion rupees each year, as
well as negatively impacting the potential for power
generation and agriculture in the state. The dams
constructed in Kashmir have deprived the locals
of their resources. In IIOJK, dams have displaced
about 362 families and taken 533 acres of land for
fueling India’s growing economy. This has caused
New Delhi to owe J&K state 20000 crores that they
used as reparation for power generated from their
resources.
The Himalayan ecosystem, which is recognized
as diverse and vulnerable, has borne the brunt of
widespread and rapid land-use change associated
with modern development and in recent years,
landslides, floods and forest fires has further
destabilized the landscape of mountain and forests.
After the abolition of Article 370, the New Delhi state
government is speeding up hydropower projects in
IIOJK through National Hydro Power Corporation.
Indian government plans to build 1,856 MW
Sawalkot (J&K), 930 MW Kirthai-II (J&K), 500 MW
Dugar (HP), 240 MW Uri-I Stage-II (J&K), and 260
MW Dulhasti Stage-II (J&K).
The construction activities for hydropower are
threatening biodiversity, impacting indigenous
people and fragmenting critical wildlife habitats.
These projects are not just exploitative in nature;
they have resulted in losses for J&K. The geographic
locations of the projects are also a problem because
Kashmir is categorized in vulnerable seismic zones
IV and V, where earthquakes frequently strike. This
makes these dams susceptible to earthquakes and
this also puts the lives of locals at risk. However,
the Indian government seems least bothered about
these risks or contributing to the loss of life; rather,
it is interested in controlling the water resources of
IIOJK.
India is also working on a plan to divert the waters
of Ujh, which is one of the main tributaries of the
Ravi that flows into Pakistan. India’s Ministry of
Environment recommends approval of her Ujh
multi-purpose (hydropower, irrigation and drinking)
hydropower plant in Kathua, Jammu and Kashmir,
which is already declared as an ecologically
sensitive area and atleast 214,502 trees will be
6
cut down for this multipurpose project. The Kinnaur
area has 53 planned hydropower projects the total
diverted forest land has 11,598 standing trees,
belonging to 21 species. It is also said that in 52
villages with 3,700 families are likely to lose their
homesteads as a result of the process of land
acquisition due to construction of the dam and
subsequent submergence area.
The development of the Bursar dam will result in
the displacement of 336 households (1,673 people)
across seven villages. Overall, at least 1,052 families
will be impacted including 716 households (4,659
people) on account of land acquisition. In Jammu
and Kashmir, hundreds of thousands of trees are
cut down every year for various projects such as
highways, roads and dams. A rough estimate is that
over 2 million trees have been cut down in the area
in the last 15-20 years. This can also affect the local
microclimate. These are serious concerns for local
communities, whose lives and livelihoods stand
adversely affected by hydropower projects.
CURFEWS, LOCKDOWNS AND
SIEGE & SEARCH OPERATIONS
The recurrent curfews and lockdowns by the
Indian army are ruining the IIOJK’s economy. IIOJK
witnessed an economic loss of over 21,000 crores
within 3 months in 2010, 4,500 crores over 26
days of curfew following the hanging of Afzal Guru
in 2013, 16000 crores for a period of five months
from July 8 to November 30 in 2016, 17,878 crores
in 4 months after the abrogation of Article 370 in
2019, more than $5.3 billion in the 10 months of
lockdown from 2019-2020. The handicraft sector
suffered a loss of around Rs 3,500 crore after the
5th Aug 2019.
IIOJK witnessed 312 siege and search operations in
2020, 195 in 2021 and more than 180 in 2022.
 Siege and Search Operations in IIOJK
350
300
250
200
150
100
50
0 Unemployment rate in IIOJK
2020 2021
Siege and Search Operat ions in IIOJK
UNEMPLOYMENT
The Great Indian Settler Colonial Project continues
in Kashmir with the help of the BJP government.
Due to the minimal existence of private sector
jobs, Kashmiris heavily depend on the government
for livelihood. The government began hiring non-
locals for jobs which were earlier only reserved
for Kashmiris. Later, the government announced
that these jobs will be reserved for “domiciles” of
Kashmir. However, this “domicile” category includes
Indian soldiers, as well as bureaucrats deputed
to Kashmir along with their families, and outside
laborers.
After laws were set up by India to fight against
“anti-India sentiment”, authorities fired hundreds
of Kashmir employees who were already battered
by the COVID-19 lockdown. Over 20% of Indian
Occupied Jammu and Kashmir’s population
remained unemployed from 2020. The average
annual unemployment rate in IIOJK for 2017 was
12.98 per cent, 11.56 per cent in 2018, 16.29 per
cent in 2019, 20.6% in 2020, 19.7% in 2021 while
the unemployment rate has substantially increased
in recent months, now in 2022, it is above 25.1% for
the ninth time since 5th Aug 2019.
Unemployment rate in IIOJK
30
25
20
15
10
5
0
2019 2020 2021 2022
2022
UNDECLARED INTERNET
SHUTDOWNS
The internet and communication blockades in IIOJK
have been happening since 2005 on Independence
Day and Republic Day. There have been more than
400 digital blackouts and speed throttling in IIOJK
over the past decade.
IIOJK has recorded the highest number of digital
blackouts and speed throttling across the globe
imposed by the world’s largest democratic country
since Aug 05, 2019. India revoked the special
status of its portion of Kashmir, known as Jammu
and Kashmir, on August 5, 2019, in a bid to fully
integrate its only Muslim-majority region with the
rest of the country. IIOJK remained offline for 18
months which makes India the biggest violator of
internet outages worldwide. The shutdown lasted
until February 5, 2021.
The private business directly dependent on the
internet has been ruined in IIOJK. Due to the
frequent internet blackout by the government, IIOJK
suffered losses amounting to 4000 crore between
2012 and 2017. After the abrogation of Article 370,
sectors primarily dependent on digital technologies,
almost 90 percent of small businesses and dozens
of students who were preparing for various
competitive exams suffered the most in the absence
of internet services.
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IIOJK witnessed around 450 internet shutdowns
between the years of 2012 and 2022. There were
116 shutdowns in 2020, 85 in 2021, while 2022
recorded the highest in the last 10 years, with a total
of 146 shutdowns in IIOJK imposed by the Indian
government..
Internet Shutdowns in IIOJK
160
140
120
100
80
60
40
20
0 losses for Kashmiri traders.
2020 2021 2022
Internet Shutdowns in IIOJK
AGRICULTURAL AND
HORTICULTURE
Since 2019, Kashmir’s export-based economic
industries which include the agricultural and
horticultural industries, also have had a negative
effect. Agriculture, a primary sector in the region,
suffered severely from curfews and lockdowns.
Some 60% of employment in the region comes
from agriculture, which has contributed poorly to
Gross State Domestic Product (GSDP). In essence,
this means that 60% of people are becoming poorer
due to an imbalance between the average incomes
of farmers and non-farmers.In Jammu & Kashmir
regions, the production of horticulture crops such
as Saffron, Walnuts, Apples, and agriculture crops
including wheat, maize, and rice have decreased.
Many villages and farmers who were solely
dependent on the horticulture crops and towns
known for particular crop production have been in
strain due to the change and loss brought by the new
8
agricultural and land use policies introduced after
5th Aug in IIOJK. Recent Indian trade regulations
impact Kashmiri apple growers. After cutting off
Kashmiri businesses from cross border trade, it has
started to hurt the once booming fruit industry of
the region. India has been making concrete efforts
to destroy it by constraining Kashmiri apple growers
to sell their crops on the Indian market.
These efforts include strangulating 8000 fruit laden
trucks on highways for weeks altogether, facilitating
the illegal import of Iranian apples into the Indian
market and driving rates down dramatically as well
as causing huge losses to Kashmiri traders.
The import of walnuts is even worse with rates
nearly falling down to zero for local producers.
India produced 2.82 lakh tons of walnuts in 2021-
22 with IIOJK accounting for around 92 per cent of
the produce. However, India imported 20,345 tons
of U.S. walnuts in 2021-2022, resulting in heavy
In view of imposition of different taxes like GST
and VAT, walnut cultivation continues to shrink
steadily from 47,004 hectares in 2017-18, 46,118
hectares in 2018-2019, 46,175 hectares in 2019-
2020, 46,134 hectares in 20 20-2021 and 46,197
hectares in 2021-2022.
IIOJK's Agricultural Land: Cropping
Intensity
159
158
157
156
155
154
153
152
151
150
149
148
2018- 2019 2019-2020 2020-2021
IIOJK's Agricultural Land: Cropping Intensity
In Jammu and Kashmir horticulture is a source
of livelihood for about 33 lakh people and 70% of
the work force directly or indirectly dependent on
agriculture for its livelihood. The Horticulture sector
is a source of livelihood for about 43 lac population
in Jammu and Kashmir. About ten lakh families are
directly or indirectly involved and depend on this
Sector. the horticulture accounts Rs 15413 crore,
livestock and animal husbandry generate Rs 12634
crore while basic agriculture contributes for just
9512 crore to the state GDP.
In the last two decades, The decline in growth graph
of horticulture and agriculture sectors in Jammu
and Kashmir has shown trough in its contribution
to the State GDP from 38% in 1990 to 30% in 2000
to 16.5% by 2021. Department of Agriculture &
Farmers Welfare data Jammu and Kashmir data
was reported at 3,912.910 Ton in 2020-2021. This
records a decrease from the previous number of
The production of Kashmiri saffron has decreased
by 65 percent in the last two decades, from 16
metric tonnes to 5.6 metric tonnes, according to
the Department of Agriculture Kashmir. Jammu and
Kashmir is the address for almost 70 per cent of
apples and 95 per cent of cherries in India, besides
nearly all the walnut, almond and saffron production.
The net farm land area across Jammu and Kashmir
has fallen from 70% -75% of the available arable
land to 65% - 70% in the last few years. The yield
of rice per hectare has gone down by around three
tons.
Decline in Growth of Horticulture and
Agriculture Sectors
40
35
30
25
20

3,936.230 Ton for 2019-2020. 15

10
Decline in Production of Horticulture 5
Crops 0
3950 1990 2000 2021

Decline in Growth of Horticulture and Agriculture Sectors

3900

3850 POVERTY
3800
The poverty rate in J&k has increased, from 10.35%
in 2017-2018 to 12.58% in 2020-2021. The rural
3750 BPL population (people living below the poverty line
who reside in rural areas) is surging and increasing
3700
2018- 2019 2019-2020 2020-2021 from 11.54% to 16.39% and the urban poverty rate
Decline in Production of Horticulture Crops has estimated to 10%. More than 47% - 52% of the
population in J&K is deprived of proper sanitationa
and 25% - 30% are deprived of nutrition in J&K.
The chilgoza tree is a rare and endangered species Percentage of BPL Population in IIOJK
of evergreen pine that is indigenous to the western 40

Himalayan region providing edible nuts and its loss 35

30
is a cause for concern in this region. The chilgoza’s 25

contribution to local income has decreased, with 20

apple and off-season vegetable cultivation being 15

the primary contributors, it still forms a substantial 10

part of the economy in villages well-endowed with 5

0
chilgoza forests, with fewer orchards. Ramban Doda Rajouri Udhampur Kishtwar Kargil Ladakh Srinagar

Percentage of BPL Populati on in IIOJK

9
 ARTS & CRAFTS INDUSTRIES
The Indian government’s decision to abrogate
Article 370 on the 5th of August 2019 has already
impacted the local economy by causing unintended
consequences that have amounted to over $1.4
billion. The years 2019-2020 and 2021-2022 saw
a huge setback for the arts & Crafts industry which
witnessed unprecedented losses during this period.
IIOJK is currently experiencing harvest losses of
40-45 percent. The decision has jeopardized the
economy of Indian Occupied Jammu and Kashmir,
an economic system that could have been enhanced
to provide for the needs of its people as well as
serve developmental aims.

CONCLUSION
The Indian-occupied Jammu and Kashmir is facing
a grim socioeconomic scenario due to the economic
blockade, unemployment and lack of development.
Kashmir is now a place of violence, where culture
and traditions are trampled upon. The economic
blockade imposed by India on the state of Jammu &
Kashmir has triggered a prolonged socioeconomic
crisis in the occupied territory. The plight of
Kashmiris became even more difficult after the
abrogation of article 370 on August 05th, 2019. The
Indian government’s presence in Kashmir has led
to a series of atrocities against civilians, leading to
mass killings, arrests, disappearances and torture.
The situation is dire for the people of Jammu &
Kashmir, who are suffering from unemployment and
poverty at an unprecedented level. Kashmir is facing
an unprecedented humanitarian crisis due to the
terror created by Indian occupation forces in Jammu
& Kashmir. The situation in Kashmir needs to be de-
escalated and the people must be freed from the
yoke of violence imposed by India. The international
community has failed the Kashmiri people despite
its constant outcry on human rights abuses. The
UN should take an active part in resolving the Indo-
Kashmir dispute and help resolve the decades-old
dispute. The economic blockade must be lifted to
improve the economy of IIOJK.

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