Since the cancellation of Article 370 in 2019, which removed Jammu and Kashmir’s special constitutional status and divided the state into two Union Territories, the region has been governed directly by the President and has only seen two local body elections. The economic situation in the area has been mixed since 2019.
In the financial year 2019-2020, Jammu and Kashmir’s economy contracted by 1%. In the subsequent year, it further declined by 1.2%, mainly due to the impact of the COVID-19 pandemic, similar to the situation experienced nationwide. However, starting from the following financial year, the economy of the Union Territory began to recover. In the fiscal year 2022-2023, which was the first year unaffected by the pandemic, Jammu and Kashmir’s GDP, adjusted for inflation, grew by 8% compared to the previous year. In contrast, the national GDP grew 7% in the same period.
In Jammu and Kashmir, the per capita income rose from Rs 1.2 lakh in 2019-2020 to Rs 1.7 lakh in 2022-2023. However, it remains below the national average of Rs 1.97 lakh in 2022-2023. The consumer price index data suggests that the Union Territory consistently faces higher inflation rates than the national average. Since 2018, Jammu and Kashmir has generally had a lower inflation rate than the national average, with the exception being in 2020.
Regarding tourism and labour force participation, agriculture’s contribution to Jammu and Kashmir’s GDP decreased from 18.4% in FY21 to 16.9% in FY23, as made the industry’s contribution, albeit slightly, from 20% to 19.5%. However, the services sector, including tourism, compensated for these declines, growing from 61.6% to 63.6%.
Regarding employment, Jammu and Kashmir have maintained a higher labour force participation rate (LFPR) than the national average. Its LFPR increased by nearly six percentage points between 2019-2020 and 2021-2022.
After the abrogation of Article 370, officials at the Centre indicated that it would create new investment opportunities. Since implementing the New Industrial Policy in January 2021, the Union Territory has received proposals worth Rs 84,544 crore across 42 industrial sectors. However, the realisation of these proposals has been relatively slow. As of now, there are 414 registered units, comprising 266 in Jammu and 148 in Kashmir, with an actual investment on the ground exceeding Rs 2,518 crore. Nevertheless, the administration has collected Rs 13,777 crore in land premiums for proposed units.
Elections in Jammu & Kashmir
The most recent Assembly election in Jammu and Kashmir took place in 2014. However, the government was dissolved when the BJP withdrew its support from Mehbooba Mufti’s Peoples Democratic Party (PDP). In 2019, the Supreme Court upheld the constitutionality of the Centre’s decision to revoke Jammu and Kashmir’s special status. The Supreme Court directed the Union government to restore statehood and mandated that Assembly elections be conducted by September 30, 2024.
There have been two local body elections since 2019. One was held in October 2019 for the Block Development Council (BDC), while the other, the District Development Council (DDC) election, occurred in December 2020.
The BDC represents the second tier of the panchayati raj system in Jammu and Kashmir and involves the participation of 26,629 panches and sarpanches. In 2019, 307 block development officers were elected, with the BJP emerging as the largest party, although Independents won the most seats. These elections occurred amid a state clampdown two months earlier following the abrogation of Article 370.
The District Development Council (DDC) elections, which also operate within the panchayat raj system, took place over eight phases and encompassed 280 seats in 2020. The People’s Alliance for Gupkar Declaration (PAGD), consisting of the National Conference (NC), PDP, CPI(M), and three other parties, all of whom opposed the revocation of Jammu and Kashmir’s special status, secured the highest number of seats (110), followed by the BJP (75). While the BJP gained control of at least six DDCs in Jammu and none in Kashmir, the PAGD secured a majority in nine DDCs, all located in the Valley. However, since the elections, the Sajjad Gani Lone-led People’s Conference (eight seats) and the People’s Movement (three seats) have withdrawn from the PAGD.
