After a lot of strategic planning and gradual deployment of forces to handle any unwarranted events, the government of India has announced the scrapping of Article 370. The government has used earlier precedents to act against this much-disputed article.
This move will have many kinds of positive impact on the lives of people of Jammu and Kashmir. Here is what this move means to people of the state in terms of economics.
End of Isolation and Start of Free Trade
The Economy of J&K largely depends upon agriculture apart from tourism. Article 370 has kept the state in the isolation and broken its links with other states. After J&K becomes equal to other regions of the country, this isolation will end.
According to a Live Mint report on how J&K politics failed to address state’s economic crisis, “The state’s economy is completely dependent, wherein the state now imports 96% of goods and exports, have gone down. Fresh fruit and handicraft form the bulk of whatever little is exported, amounting to ₹7,000-8,000 crore, while the requisite amount is roughly ₹40,000-50,000 crore. So, financially, the state has been reduced to complete dependence, with the strategy of exporting surpluses not being pursued at all.”
The spirit of free trade will help in correcting the distorted market structure. It will also help in increasing exports from the state.
Article 370 gave a special status to J&K assembly. Unlike in other states, the laws made by the Parliament of India need to pass the test of the assembly. This resulted in inordinate delays. According to a report by Business Standard, “A gas pipeline waited for two years -from 2011 to 2013-to get right of use provisions to enter the state.” There are many other such examples. After the abrogation of article 370, law-making will be expedited and the union government will no longer require the ‘permission’ of the state government before passing the legislation.
Boost to Tourism Industry
J&K is known for many scenic sites, mountains and its lush green meadows. It attracts a lot of domestic and international travelers. But, due to lack of proper tourism infrastructure in the state, it has never been able to realise its full tourism potential. Whereas states like Rajasthan and Kerala have done much better than J&K despite it being located in the lap of Himalayas. The successive state governments didn’t do much to create the necessary infrastructure and the union government due to article 370 remained helpless in directing the state government.
Now, hotels, restaurants and travel companies from across India will get the freedom to operate in J&K bringing more investment and creating the necessary infrastructure. This will help in the creation of many employment opportunities for locals.
Push to Entertainment Industry
After the intensification of militancy in Kashmir valley in the 1990s, the state witnessed closing down of many cinema halls. The fear of radicals and militancy kept Bollywood producers at bay. This has resulted in revenue loss for the state. After the move on article 370 by the central government, normalcy to the state will return and entertainment industry will gain from this by not only increasing the revenue for the state but also establishing a much closer connection between people of the valley and people from the different states.
Watch of Comptroller and Auditor General of India
Due to article 370, the expenditures by the J&K government were never put to the scrutiny of CAG, unlike in other states. This gave a free pass to state governments, mostly run by a few families, in controlling the finances of the state. Interestingly, due to its special status under article 370, J&K kept getting a handsome amount of funds from the central government. And, without scrutiny, the large sum of money may have never reached the intended beneficiaries. After scrapping of article 370, the CAG will now have a watch over expenditures of the government of J&K.
Impact on Land Prices
J&K has so far been ruled as a family-run property by the local parties. The union government of India couldn’t legislate on anything other than defence, foreign affairs, finance, and communication when it came to J&K. Importantly, due to article 35A, no citizen of India except the permanent residents of J&K was allowed to buy property in the state. This complete elimination of competitors skewed the demand and supply of land in the state. Few influential families grabbed the power to decide the price and determine the buyer.
In post-370 era, any citizen of India can buy the land in the state restoring the prices to the demand-supply matrix. Land is an important component of any economy. It will augment the resources not only for the people but also for the state government.
Apart from the above benefits, there is much more that will benefit the people of J&K. With better investment and infrastructure, J&K will get economically empowered in the true sense. Article 370 has deprived the common people of these benefits for the last 7 decades and helped some in making their fortunes. Finally, the common people of J&K will get the freedom that they have always wanted.