The government recently introduced a resolution to remove provisions of Article 370, which provides special status to Jammu and Kashmir.  In addition, Home Minister also introduced a Bill bifurcating the State of Jammu of Kashmir into Union Territory of Ladakh and the Union Territory of Jammu and Kashmir. The Presidential Order has extended all provisions of the Constitution to Jammu and Kashmir, including the chapter on Fundamental Rights. Therefore, the discriminatory provisions under Article 35A are now unconstitutional.

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The economy of Jammu and Kashmir has suffered from disturbed conditions prevailing in the State for almost two decades. J&K does not have enough private sector letters and politics hasn’t produced enough vowels because it is insufficiently urbanized, financialized, formalized and industrialized. Article 370 and 35A created huge regulatory and legislative cholesterol in land markets and labour markets that created an antibiotic reaction to formal enterprises, institutional capital, and professional workers. The fragile political and security situation has further dissuaded the investors in J&K.

J&K- an economic infant:

• The huge chunk of Kashmir’s workforce employed in horticulture and handicrafts gets less than 20% of the final sale price of their goods because of lack of design, distribution and capital.
• The hospitality industry does not have a robust local people supply chain, has less business model diversity, and lower employment elasticity of growth because of weak access to technology, capital, and marketing.
• The state not only has a lower credit-to- GDP ratio than Bihar, but its primary banking institution is almost unskilled—it knows how to give money but not how to get it back. Low formalization means no private firm with more than 500 formal employees.
• There is only one listed company, and private investment last year was less than ?1,000 crore.
• Given how the potential for professional tourism, horticulture, handicrafts, and manufacturing could combine with how smart the people are, it is not unfair to say that the J&K economy is a 10-horsepower engine running on one horsepower.

Measures needed:

• More effective implementation of employment-oriented schemes and programmes.
• Tourism is another area which is a gift of nature to the state. But unless we are able to create the requisite infrastructure and other facilities of high quality of international standard for the tourists, the real benefits will not flow to people in terms of income supplementation and employment generation.
• The state has three distinct niches, while leisure tourism is available in Kashmir valley, Pilgrim in Jammu and Ladakh has the potential to after adventure tourism
• Human resource development through education and health is not only a pre-requisite for better human living but is also critical in determining the pace of economic development of a society.
• There is a need to give fillip to the economic activities that have traditionally been the mainstay of the State’s economy and continue to hold significant potential for growth and employment.
• Such activities include Agriculture (including Horticulture), Food Processing, Handicrafts and Handlooms, and Livestock and Poultry farming on modern lines.
• It would be equally necessary to ensure diversification of the State economy, especially expanding the industrial base by generally have a traditional bent of mind. Diversification of agricultural activities is the need of the hour to keep up with the changed circumstances.
• Jammu and Kashmir has unexploited capacity to produce products which have value demand and ready for attractive markets both in India and Overseas. E.g. bio aromatics, medical herbs, organic specialty vegetables etc.
• The potential of Horticulture in J&K is high, given the rich diversity in its flora and fauna and varied agro-climatic situation. The state enjoys monopoly in certain fruits, vegetables and medicinal plants and there is an immense scope for increasing the production of other horticulture produce that are marketed in rich and export markets.
• Jammu and Kashmir is rich in handicrafts, so state Government must promote handicrafts industries by increasing shopping arcade in their existing properties and provide space for handicrafts industry to display their products.

Conclusion:

The significant move, in theory, opens up potential opportunities for development-led economic growth in the Union Territories of J&K and Ladakh. Thus, the move is bound to have a significant impact on the demography, culture, and politics of J&K. Whatever its intent in enabling the full integration of Jammu and Kashmir with India, this decision to alter the State’s status could have unintended and dangerous consequences.