‘Economy on deathbed’: The great depression in Kashmir
A few weeks after making the purchase on a bank loan, Kashmir shut down for several months during the uprising of 2016. The situation continued to remain volatile. In August 2019, an unprecedented lockdown was enforced in Kashmir and when it thawed in early 2020, the COVID-19 pandemic forced Kashmir shut for a second time.
Now, Kashmir is in its third lockdown since August 2019.
There is no sector of Kashmir’s economy — be it tourism, horticulture, transport, or trade — that hasn’t suffered losses in the past two years. “Economy was already on its deathbed,” said Sheikh Ashiq, President of the Kashmir Chamber of Commerce and Industry (KCCI). “Somehow we were trying to survive, then came the pandemic.”
‘In debt, from head to toe’
Wani was at home for the most part of 2020.The transport industry has taken a major hit as public transport and taxis have remained off roads for much of the past two years, leaving several thousand families, like that of Wani, in economic distress.
“I don’t know how I am running my household. It’s Allah’s mercy. I borrow and feed our stomachs,” Wani said. “I am in debt, from head to toe.”
There are more than 60,000 commercial transport vehicles in Kashmir, a source of livelihood for over one lakh families. “Since last year, I haven’t paid the school fee (of his two children). The school keeps asking us but we have no money to pay them,” he said.
The Wani family’s children now catch up on their studies through their peers in the neighborhood. With a heavy heart, Wani puts down their wishes to have chocolates. “We have to be strict with them if they ask for anything we can’t afford,” Wani said. “We are helpless. They are children, they don’t have a sense of these things.”
Wani now awaits the lockdown to end. His vehicle, like hundreds others, has been lying idle since the second wave of Covid-19 began and prompted a weekend curfew that turned into a lockdown, extended in installments of a few days.
There is still debt that Wani has to repay. “I have a debt of around ₹7 lakhs which includes the vehicle loan,” he said. “If the situation would have been normal, things would have been fine.”
Every sector is hit
The economic crisis in Kashmir began with the floods in 2014, followed by the demonetisation and then successive lockdowns, said Manzoor Ahmad Mir, president of the Regal Chowk Traders Association. “Series of events over the years broke the back of traders,” he lamented.
Traders in the Regal Chowk area, in the busy commercial hub of Srinagar, have still not gotten back on track, said Mir. Unlike other parts of the city, partial operation of businesses despite lockdowns or volatile political situations isn’t feasible here.
“If anything was left, we lost it in this [current] lockdown,” he said, adding that the Regal lane, lined with shops on either side, has about 150 businesses operating with about four sales executives each on average.
“I think traders in this part of the city have faced more than 100% loss,” said Mir.
Kashmir overall suffers losses of thousands of crore rupees on a daily basis, Ashiq, the KCCI president told The Kashmir Walla. “Economic losses in Kashmir in the last year were about ₹40,000 crores… Since the second Covid-19 lockdown, the daily loss is around ₹3000 crore loss,” he said. “Exports have [also] suffered a loss of more than 50 percent.”
Even as markets reopened later in 2020, the crippling impact of successive lockdowns made it difficult for businesses to spring back. Between June 2020 and March 2021, according to the Centre for Monitoring Indian Economy (CMIE), more than five lakh — 5,69,476 to be precise — lost their livelihood.
In December last year, a 28-year-old contractor in south Kashmir’s advertisement in a local newspaper, offering his kidney on sale, had shocked Kashmir. “Maybe I would have been able to work and repay the loan but after the abrogation and pandemic induced lockdowns and economic crisis, I couldn’t find any work,” he had said.
The unemployment rate in Kashmir, a month before the August clampdown, was about 14.74 percent but drastically rose in the next six months to 21.08 percent, according to the CMIE. From an estimated 35,63,557 employed in the region, today there are about 29,94,081.
The local trade during the current lockdown, said Yasin Khan, president of the Kashmir Traders and Manufacturers Federation, is suffering losses of “₹150 crores rupees per day.” The financial health of businesses in Kashmir, he said, “is at its worst”.
Owing to the overall economic crisis, the public’s spending power had also diminished, said Khan, as he substantiated his argument: when the lockdown was lifted last winter, there was no rush of buyers. “The rush that would be in markets earlier is nowhere to be found,” said Khan. “People don’t have the spending power to afford things.”
Junaid Ayoub Rather finds it hard to revive his apple production and trade after suffering major losses during previous years. He had dispatched the last truck with the 700 boxes of fresh apples in 2018 and from the next season, his trade succumbed to the lockdowns.
Rather’s apple orchard is spread over eight kanals in south Kashmir’s Shopian district with about 300 apple trees with an annual production of 1000 boxes on average. “During the lockdown 5 August , the material became expensive,” said Rather.
Shopian is known as the apple bowl of the country as the district’s apple orchards are spread over 21,676 hectares, making it the biggest apple producer after south Kashmir’s Anantnag district. Kashmir produces about two million tonnes of apples, almost two-thirds of which is exported.
During the lockdown, the markets were flooded with fake and substandard pesticides which caused damage to the crop, Rather said. “The quality check of the pesticides was not possible due to restriction,” he said. “The shopkeepers even started selling them at higher rates.”
The ₹10,000 crore horticulture industry is a major contributor to Kashmir’s economy and it involves 700,000 families or 3.5 million people directly or indirectly. Kashmir exports around 20 lakh metric tons of apples every year.
The substandard pesticides hit the orchards with crop disease called scab. The photos of apples hanging on trees with black stains went viral on social media last year. “It eventually led to the decline in prices of apples,” said Rather. “I think, from the last two years our business has declined to 50 percent.”
Aside from the scab, the damage caused by unexpected snowfall to the orchards in early November last year caused a loss of about ₹500 crore in the region.
In the third lockdown, there are no signs of economic revival on the horizon. Even the much hyped tourism sector — that includes houseboat owners, hoteliers, transporters, and many from the informal economy — has been crippled by the lockdowns.
For Ashiq, the current lockdown is a matter of survival as the region has been hit by the unprecedented second wave of the pandemic in March. Jammu and Kashmir is witnessing more than 3000 cases every day and over 50 deaths on average.
Ashiq said that Kashmir’s “economy is declining every year” and that “we are not seeing any improvement. Just decline.”
Every business in Kashmir suffered at least a 50 percent drop in earnings last year, said a report on the impact of lockdowns in the region by The Forum of Human Rights in Jammu and Kashmir.
“While the business community was still struggling to revive after the unprecedented developments since August 2019, the fresh spell of lockdown has created havoc for many of the families, which survive on daily earnings,” Ashiq said in a statement issued on 7 May, pleading with the Lieutenant Governor Manoj Sinha or a “financial sustenance package”.
“It feels like there is a war going on,” Ashiq told The Kashmir Walla. “Let us first come out of this pandemic to finally hope for the revival.”
Publication: The Kashmir Walla