Economic crisis

Published : Oct 22, 2010 00:00 IST

THE immediate fallout of the unrest in Kashmir Valley which began with the killing of 17-year-old Tufail Mattoo in a police firing in June is not only loss of lives but a huge dent in the economy and a severe setback to the education system. Owing to the protest calendars put out by the hard-line Hurriyat Conference leader Syed Ali Shah Geelani and the curfew imposed by the Omar Abdullah government, normal life in the valley has come to a standstill.

The economy has suffered a loss of about Rs.10,000 crore in three months. Unable to cope with the losses, the private sector laid off 1.5 lakh workers.

The tourism industry, which had been witnessing a boom until June with five lakh tourist arrivals, came to an abrupt halt as protesters thronged the streets.

In our sector alone more than 50,000 people have been disengaged, said Mushtaq Ahmad, who owns a chain of hotels. This has happened for the third year in a row.

Other small and big business enterprises are also facing the worst crisis. We are on the verge of an economic collapse, said Shakeel Qalandar, president of the Federation of Chambers of Industries Kashmir. How long can we go on asking banks to extend the limit of the cash credit facility and overdrafts? he asked.

Estimates of losses vary, but slightly. While Qalandar believes that the loss per day is Rs.100 crore, the noted economist Professor Nissar Ali puts it at around Rs.80 crore a day. There are 21 public sector establishments, 50,000 small-scale enterprises and around four lakh other establishments in the valley. These have remained closed during this unrest. This accounts for a loss of Rs.8,000 crore for 100 days, Nissar Ali said.

Nazir Ahmad Dar, president of the Chamber of Industry and Commerce, believes that the economic sector in Kashmir is passing through the worst crisis. We are completely out of work. No circulation of money, no business, he said, adding that no one knows how long it will take.

What is worrying industrialists and entrepreneurs is that the repayment of loans is also on hold. We pay huge interests. How can we compensate for that? Dar asks. We pay Rs.15 crore as interest to the banks every month, says Qalandar.

Although Prime Minister Manmohan Singh announced in his August 15 speech measures to help revive the economy in Jammu and Kashmir, with the unrest unabated, there appears to be no alternative to pull the economy back from the brink.

Shujaat Bukhari
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