Reviving The Economy

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THOUGH businesses in Kashmir have reopened over the past two months, it will take years for the Kashmir economy to get back to normal. Unlike rest of the country that was closed for a little over two months and as a result cratered by a one-fourth, Kashmir was shut for over a year. First, there was a seven month long security lockdown and communication blockade and then from March onwards there was Covid-19 lockdown for six more months. According to an estimate by the local business bodies, the Valley’s economy has so far suffered a loss of around Rs 50,000 crore. Its fallout on the ground has been grim: thousands of people have lost their jobs. Sectors of economy like tourism, handicrafts, hotel industry, IT, transport etc have been crushed. People have been forced to shut down their old unviable businesses and start new ones. In one poignant case, a handicrafts shop on Boulevard was converted into a wazwan outlet. In fact, food outlets have surfaced where used to be proper businesses.

Recently, Lieutenant Governor Manoj Kumar Sinha announced a relief-and-revival package of Rs 1,350 crore to revive the Union Territory’s business sector. In addition, there is Rs 1,400 crore package for J&K under the Aatma Nirbhar Abhiyan, of which Rs 6,000 crore is for power sector reforms etc. This was the first effort since August 5, 2019, to provide relief to the businesses.

The main component of the package is 5 percent interest subvention to all borrowers irrespective of their sizes, that would cost about Rs 950 crore. The interest subvention will be available for six months in the current financial year. Also, the government announced a 50 percent waiver of fixed charges for one year with respect to electricity and water. which would cost Rs 105 crore.

Though considering the egregious loss the businesses have suffered over the past fourteen months, the government stimulus is disproportionately less, the Valley’s leaders are happy to get some relief after all. They understand that the Government of India and the J&K government are under tremendous financial crunch because of COVID-19 and present circumstances, So they feel that the government has done its part.

One silver lining for the economy as elsewhere in India is that the government is working to systematically reopen the economy. In Unlock 5, the government has now given green signal to reopening of the schools, cinema halls and religious gatherings subject to observance of Standard Operating Procedures. Only threat to recovery is the reigning uncertainty in Kashmir and the ever present chances of a fresh turmoil in the region. Besides, it will take a long time for the tourism industry, the mainstay of the Kashmir economy, to get back on rails. Here’s hoping that the vaccine is available soon and the economy resumes working as before the advent of Covid- 19. This will go a long way to restore the economy to its normal operation that in turn will bring back lost livelihoods.

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