Has Jammu and Kashmir really ‘prospered’ after 2019? Data suggests otherwise

On Monday, Prime Minister Narendra Modi inaugurated a strategically important tunnel in central Kashmir’s Ganderbal district.

The 6.4-km Sonamarg tunnel on Srinagar-Leh national highway takes an important step in ensuring round-the-year connectivity to the Ladakh region. This is the second major infrastructure project Modi has flagged off in the region in the first two weeks of 2025.

In an indirect reference to the scrapping of Jammu and Kashmir’s special status and statehood in August, 2019, Modi said the union territory is “regaining its identity as ‘paradise on earth’, leaving behind the difficult days of the past”.

“J&K is the crown of India and I want this crown to be made more beautiful and prosperous,” he said, in an address to the gathering at Ganderbal.

However, a look at different parameters of Jammu and Kashmir’s economy and other development indexes suggests that in the past the erstwhile state performed better than most Indian states on economic and social indicators – and that its “prosperity” may have taken a beating since the Bharatiya Janata Party government brought in radical changes to its constitutional features.

Social and economic indicators pre-2019

With its small population, Jammu and Kashmir contributes only 0.8 % to India’s gross domestic product. Nonetheless, the erstwhile state’s human and social development indicators have always been better than the rest of the country.

Take the case of poverty. According to the National Sample Survey Organisation, the share of India’s population considered poor was 22 % in the year 2011-’12. Jammu and Kashmir’s poverty levels stood at less than half of that number with 10.3%.

Jammu and Kashmir stands out in a comparison of human development indicators. For example, between 2009 and 2016, average life expectancy in Jammu and Kashmir (for both males and females) has been above the national average. The erstwhile state’s literacy rate was 67 % as per the 2011 census, a number slightly behind the national literacy rate of 73 %.

On female sex ratio, Jammu and Kashmir performs better than the rest of the country. Against 929 females born per 1,000 males in India, Jammu and Kashmir registered 976 female births. This data is based on the findings of National Family Health Survey-5 conducted in 2019-21.

It is also a better performer when it comes to under-five-year-old child mortality. In India, 42 children per 1,000 births do not live up to their fifth birthday. In Jammu and Kashmir, that number is just 18.5 children per 1,000 births.

Soaring unemployment

During his address on Monday, Modi said the government’s efforts to establish major infrastructural projects in the union territory had provided “new opportunities” to the youth of Jammu and Kashmir.

However, official data reveals that the region is struggling with alarming levels of unemployment – which have worsened since 2019, the year New Delhi downsized Jammu and Kashmir from a state to a union territory.

In November, for example, the latest Periodic Labour Force Survey data revealed that Jammu and Kashmir’s overall unemployment rate rose to 11.8 % in the July-September quarter of 2024 from 10.2% in the same quarter in 2023.

In the 15-29 age bracket, the unemployment rate was 32%, compared to the national average of 15.9%.

The figures were not surprising.

According to a Scroll analysis of annual Periodic Labour Force Survey data, the overall unemployment rate in Jammu and Kashmir between 2017 and 2019 was below the national average.

However, from July 2019 – a month before Jammu and Kashmir’s special status was unilaterally cancelled – till June 2024, J&K’s unemployment rate has been consistently above the national unemployment rate.

This pattern is also visible in the unemployment rate of the key workforce of the 15-29 age group. Before 2019, the annual unemployment rate in this group was lower than the national average. But it has consistently remained above the national rate of unemployment since the second half of 2019.

While the impact of the Covid-19 pandemic on employment was a pan-global phenomenon, India’s overall unemployment rate after the pandemic years has shown a decent decrease, from 4.8 % in 2019-20 to 3.2% in 2023-24, according to the Periodic Labour Force Survey.

In comparison, J&K’s unemployment rate has not budged, from 6.7% in 2019-20 to 6.1% in 2023-’24.

The unemployment rate in the 15-29 age group in Jammu and Kashmir is more worrying. It soared to 17.4% in 2023-24, according to the Periodic Labour Force Survey, against the national average of 10.2%.

The alarming signs of joblessness in Jammu and Kashmir are everywhere. In December, more than 5.5 lakh candidates took part in the written examination for 4,002 posts of constables in Jammu and Kashmir police.

Increasing debt

It’s not only employment. The government is struggling even with funds.

Take the case of the debt levels of the Jammu and Kashmir government. As revealed by the 2024-’25 budget for the union territory, Jammu and Kashmir’s total liabilities stood at Rs 1.12 lakh crore in 2022-’23 – the highest ever. In 2019-20, the same liability stood at Rs 83,573 crores.

Economic experts have flagged this staggering amount of debt. As per the budget, the union territory’s debt-to-GDP ratio for 2024-’25 stands at51 %. Debt-to-GDP ratio is a metric that shows a country’s ability to pay back its debt by comparing it with the country’s annual economic output. Higher the debt-to-GDP ratio, the more difficult it is for the economy.

Given J&K’s over-dependence on the Centre, lack of a thriving private and industrial sector, and decades of political instability, liabilities have always plagued Jammu and Kashmir even when it was a state. But the latest number is staggering even by J&K’s standards. For example, in 2011-’12, the erstwhile state had a liability of Rs 36,256 crores.

These numbers question New Delhi’s assertion that the scrapping of Jammu and Kashmir’s special status and statehood has ushered into a new dawn of economic development for the region.

Decreasing output

On the fifth anniversary of the abrogation of Article 370, a rights group in New Delhi came up with a scathing report about the state of Jammu and Kashmir’s economy following the nullification of its special status and statehood.

According to the ‘Forum for Human Rights in Jammu and Kashmir’, the erstwhile state’s Net State Domestic Product grew by 13.28% between the financial years of 2015 and 2019. Following its bifurcation and downgrading into a union territory, the rate of growth stood at 8.73%.

The monetary value of the goods and services produced within the boundaries of a state or UT during a given period of time is called Net State Domestic Product.

This decline was also noted in the economic output of an individual within Jammu and Kashmir. “The per capita NSDP growth rate was 12.31% between April 2015 and March 2019 but it was 8.41% between April 2019-March 2024,” the rights group said.

Amidst this economic slump, the inflation in Jammu and Kashmir has consistently remained above national average. According to the J&K government’s economic survey for 2023-’24, the inflation rate in J&K between 2018-’23 has gone below the national average only in two years.