JAMMU and Kashmir’s economy has slumped on account of 12 months of lockdown owing to the political condition as well as the Covid-19 pandemic. In July 2020, the state’s average unemployment rate at 17.9 percent was twice that of the national average at 9.5 percent. The situation is expected to worsen with the Indian government granting domicile certificates to immigrants, thus allowing them to be eligible for government jobs.
All sectors have experienced huge losses and there is no respite in sight. The pandemic has also hindered any efforts that the people could have taken on their own. In the presence of a global pandemic, individual efforts are also bound to fail. Therefore, there’s a dire need for institutional government support and policies to redress J&K’s economic downfall.
To this end, the center should provide substantial fiscal stimulus packages and facilitate interest subvention to boost consumption. It must also spend more on projects under implementation and invest substantially in healthcare as well.
Additionally, the government must also turn its attention towards the unorganized sector and ensure that they get benefits of economic schemes and packages launched by government. It must also ensure that such measures reach workers from unorganised sectors.
Fortunately, the Indian government’s decision to remove most of the restrictions has provided much-needed relief to businesses — large and small. Despite this, the demand scenario is expected to remain weak for most of the current financial year. But it could make a comeback next year. The resumption of normal economic activity will drive much of the growth and households will also spend more in comparison with the cautious and limited spending amid the Covid-19 outbreak. Firms are also expected to restart delayed investments.
As consumption revives, credit rating agencies expect UT’s economic growth to rebound. While that enormous challenge looms like an unsurmountable challenge; some experts and economists believe a recovery could be on the cards in the next six to nine months. However, it may not appear straightforward.
Wasiq Yousuf Bhat
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