Economic Promises, Ground Realities: The Kashmir Paradox

Economic Promises, Ground Realities: The Kashmir Paradox


By Sohaib Ahmed



5 August 2025 marked the sixth anniversary of the revocation of Article 370 which stripped the State of Jammu and Kashmir of the special status conceded to it by the Indian constitution. The development was also accompanied by the bifurcation of the state into union territories of Jammu & Kashmir and Ladakh. Article 370 granted the special status to Jammu and Kashmir so it could have its own constitution and flag and required the concurrence of state legislature for the extension of  those articles of the Indian constitution to Jammu and Kashmir which did not correspond with the subjects mentioned in the  Instrument of Accession. 


The Presidential Order of 1954, better known as 35-A, was also an offshoot of  Article 370 which empowered state legislature to define “permanent resident” of the state and decide their rights and privileges. BJP had been actively trying to repeal this special status of Jammu and Kashmir since 1953. It was the prime manifesto of BJP’s 2019 election campaign. Subsequently, the motion was moved to the Parliament for  its repeal when BJP secured landslide victory in the election.


BJP had long framed Article 370 as an obstacle to the development of Jammu and Kashmir.  Amit Shah, the incumbent home minister of India who tabled the bill for the revocation, claimed in the Parliament that it was due to Article 370 that democracy could not be fully achieved, corruption rose, and economic development could not be ushered into the region.[1] Thus, the repeal of Article 370 was envisaged as an opportunity that would unlock new avenues for economic prosperity in the region. However, after six years of its abrogation, economic surveys by both government and independent agencies suggest that the dream of development in the region still remains a mirage.


Rather, the abrogation of Article 370 backfired and derailed the economic trajectory of the region. According to the India Unemployment Report, which is compiled by the Institute for Human Development in collaboration with International Labor Organization (ILO), the unemployment rate in Jammu and Kashmir was 9.6% much higher than the national average of 5.6% in May 2025. It was also much higher than the large majority of states and union territories, nearly equal to Himachal Pradesh (9.9%) and only less than the small union territories of Lakshadweep (16%)  and Andaman & Nicobar Islands (14.1%).[2]


One can argue that this declining economy is the outcome of the political system that had remained prevalent in the past, and it would require time for the realization of the benefits of these legal and constitutional changes. However, the comparison of pre- and post-2019 economic surveys concludes that the economy of Jammu and Kashmir has actually regressed. The Forum for Human Rights in Jammu and Kashmir (TFHRJK) which launched a report on the fifth anniversary of the abrogation of Article 370 noted that Jammu and Kashmir’s net state domestic product (NSDP) recorded annual growth of 13.28%  between April 2015 and March 2019, which declined to 8.73% after 2019.[3] NSDP is the net value of goods and services produced in a state in a given fiscal year, after subtracting depreciation.


The per capita NSDP growth rate was 12.31% between April 2015 and March 2019, but it was reduced to 8.41% between April 2019 and March 2024. The revelation came after Parliament was told during the presentation of the union territory’s budget that the union territory debt had boomed to 1,12,799  Indian crores, and the liabilities of Jammu and Kashmir had increased by three times over a decade since the BJP’s ascent to power in the Center.[4] The report was prepared by an informal forum comprising prominent members of civil society including Gopal Pillai, Former Union Secretary and Radha Kumar, former Interlocutor for Jammu and Kashmir.


These facts and figures are sufficient to expose the false narrative of economic prosperity being peddled by the government of India in Jammu and Kashmir. However, detailed inquiry of the economic situation into the union territory presents a more horrible picture, suggesting that the BJP government has embarked on the journey to what is termed as “settler colonialism” in Jammu and Kashmir.  International Federation for Human Rights (FIDH) published a report in October 2024 which concluded that forced eviction, land confiscation and demolition had become a “new normal” in the union territory (detailed report can be accessed from the website of the concerned organization)[5].


In the bottom line, the pressing situation in Jammu and Kashmir merits urgent attention. If the international community fails to recognize and address the exploitation of the people of Jammu and Kashmir which has increased exponentially since the repeal of Article 370, the outrage of Kashmiris can be manifested in such a manner that may jeopardize the already fragile strategic stability of South Asia as we have witnessed in the past.


The writer is a scholar at Quaid-i-Azam University and currently serving as an intern at Kashmir Institute of International Relations Islamabad.


[1]  "Article 370: What happened with Kashmir and why it matters," BBC News, last modified August 6, 2019, https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.bbc.com/news/world-asia-india-49234708&ved=2ahUKEwiVnNfGgbSOAxVWTGwGHZdSE40QFnoECCIQAQ&usg=AOvVaw2lp52rEVBHUlgjde7eIXrU.

[2] "Unemployment Rate In India (2008 To 2023): Current Rate, Historical Trends And More," Forbes India, last modified August 10, 2023, https://www.forbesindia.com/article/explainers/unemployment-rate-in-india/87441/1.

[3] Jehangir Ali, "J&K's Economic Growth Slumps After Article 370 Abrogation, Forum for Human Rights Report Finds," The Wire, last modified August 4, 2024, https://thewire.in/rights/jks-economic-growth-slumps-after-article-370-abrogation-forum-for-human-rights-report-finds.

[4] Ibid.

[5] YOUR LAND IS OUR LAND India’s land rights violations in Kashmir, (FIDH, 2024), https://www.fidh.org/IMG/pdf/kashmir832a.pdf.

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