Years of neglect has taken an enormous toll on Jammu & Kashmir's economy as it has largely survived on Centre's grants-in-aid which contributes to more than half of its revenue.
Even though the state has seen a growth rate of over 10 per cent in three out of the last five years, it's on a very low base effect.
In fact, J&K-which is 4 times the size of Punjab in geographical expanse-has an economy which is less than one-third of Punjab's Rs 5.18 lakh crore.
For long, Bharatiya Janata Party has held restrictions under Article 370 responsible for the dismal state of Jammu and Kashmir's economy. In the manifesto for 2019 Lok Sabha election, the party had promised to abrogate the law in order to channel required financial assistance to the state. And in line with its electoral promises, the Modi government moved the motion to revoke Article 370 in both the Houses of Parliament. Rajya Sabha gave its approval on Monday, whereas Lok Sabha passed the motion on Tuesday.
Here's how the economy of Jammu and Kashmir stands:
1. In 2018-19, Jammu and Kashmir had registered 11.7 per cent growth in its Gross State Domestic Product (GSDP), which grew to Rs 1.57 lakh crore (advanced estimates), as per the state government's data. Its neighbouring state Punjab, on the other hand, saw 8.52 per cent growth in GSDP at Rs 5.18 lakh crore.
2. In recent years, Jammu and Kashmir had sustained its economy on grants-in-aid from the Centre, which usually form at least half or more of the total revenue receipts of the state. In 2018-19, the Jammu and Kashmir government had laid down a budget estimate of Rs 34,330 crore as grants-in-aid. This amounted to over 53 per cent of Rs 64,269 crore estimated total revenue for the period.
3. Jammu and Kashmir's economy is based on services and agriculture. The key industries of the state are tourism, handicrafts, sericulture, handloom, horticulture, food processing and agriculture. However, the Economic Survey of Jammu and Kashmir showed that the state has spent only 0.9 per cent of its GSDP on industries. The state's manufacturing activity remains restricted to agricultural products and handicrafts.
4. The Jammu and Kashmir saw the highest monthly average employment rate of 15 per cent between January 2016 and July 2019. This is double the nation-wide figure of 6.4 per cent.
5. The real estate sector is expected to see a revival after Article 370 is revoked as the law prevented outsiders from owning property in Jammu and Kashmir. The slow demand had depressed the real estate prices which are now expected to rise.