December 8
The Rubaiya episode
December 9
Bitter Memories
December 10
The rulers, their doings
December 11
This man saw it all
December 13
Victims of the gun
December 14
Homeless in homeland
December 15
The UN stand
December 16
Wronged rights
December 18
How much longer?

Headlines and datelines

The Kashmir map

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Day 9: December 17
Operation Rescue

Saving Kashmir's economy
will be tougher than saving Private Ryan

Chindu Sreedharan

Ghulam Rasool wakes up in the dark. Like the morning before and the one before and the one before, he doesn't bother switching on the lamp. No electricity, he's certain.

Pushing aside the thick blankets, he stumbles to the bathroom. Now comes the torturous moment. Gritting his teeth, he plunges his hands under the tap. The freezing water numbs him. But Rasool manages to splash a little on his face.

"I do it... but my children refuse to wash their face with freezing water. In the night we boil water for hours to fill the water bags to warm our beds. Yes, we do have a geyser, but where's the power?"

Where's the power? Where's drinking water? Where are the roads?

Questions that Kashmiris face every day. Erratic power supply, for one, has stolen all the romance from the snowy months. Time was, Kashmiris remind you, when it used to be a fairytale life here, inside warm rooms, eating harisa (a preparation of rice and mutton).

And now? Perish the thought.

"Now even the water situation has worsened. We get only a few hours' supply," reports correspondent Mukthar Ahmad.

"With chilla kalan, the coldest part of winter, between December 21 and January 30, approaching, the problems will only multiply," he adds.

Up front the numerous ills that insurgency has brought upon Kashmir is the financial crisis.

Here, we need to make a distinction between the finances of the state government and the Kashmiris's economy. As Jammu and Kashmir Chief Secretary Ashok Jaitley points out: "It's the government's finances that is in a precarious situation, not Kashmir's."

The Kashmir economy is nowhere near the void that threatens to swallow Finance Minister Mohammad Shafi's budget, true. But it isn't healthy either. The growth rate was 8.47 per cent in the 1980s. Today, it is just 4.5 per cent. The living standards have declined, but there's money in circulation and there are construction activities. And hardcore poverty -- the kind that exists in, say, Bihar or Uttar Pradesh -- is alien to the valley.

For this, you have the late chief minister Sheikh Abdullah to thank. In 1947, when he came to power for the first time, he abolished the jagirdari system of landholding, which legitimised the exploitation of peasants by landlords. In 1949 he gave the peasants, who constituted 83 per cent of the population, the land they worked on. Thus, every Kashmiri has a plot, which stands between him and indigence.

On the other hand, the state government's finances are a royal mess. The fiscal deficit, which was Rs 574 million 10 years ago, now stand at Rs 9.4 billion.

"We need help from the Centre badly," Shafi says, echoing Chief Minister Dr Abdullah. "The effect of militancy has been devastating on our finances. All sources of revenue have dried up while the state expenditure has tripled from what it was in 1989."

The major parasites on his budget, Shafi says, are the losses suffered by public sector undertakings, the non-realisation of revenues like power tariff and sales tax, and security-related expenditure.

"In 1989-90, security-related expenditure was marginal. Then it climbed to 2.5 billion. Now it is 3.05 billion," the finance minister adds.

In addition to the huge sum the Centre spends to deploy the army and paramilitary for anti-insurgency operations, it had promised to reimburse the state's security expenses. But part of the money hasn't arrived, pushing the state into deeper crisis.

"They owe us more than Rs 8.96 billion," Shafi claims.

What has been Kashmir's saving grace is agriculture. Contrary to the popular belief that tourism, which slumped from the 550,000 tourists of 1989 to 150,000 visitors in 1999, is the backbone of the economy, it is agriculture that essentially keeps things going. It contributes a healthy 37 per cent to the state's net domestic product. This is eight per cent above the national average.

Horticulture too brings in substantial revenue. As also handicraft. "If at all the economy has survived militancy, it is because of these," Shafi says.

'Kashmir can become prosperous within a short time' Read on...