8th August – Lessons for Kashmir’s economic integration with the rest of India

While abrogating the Article 370 from Kashmir, Home minister Amit Shah said that the way ahead will be determined by the ability to offer economic opportunities to young people in the Kashmir valley. In other words, political integration needs to be followed by economic integration. The worst fears of his many critics will be realised in case this does not happen.

Kashmir’s economic integration

India’s economic integration –

  • India first got politically integrated in 1950. Economic integration followed more slowly. This is in sharp contrast to what happened in Europe after World War II.
  • India has been a common civilisational unit for many centuries. There was some internal trade as well, but most of it was rooted in traditional caste networks.
  • The economic integration of the territory began in earnest only under colonial rule, especially after the British built railways to move troops around, bring raw materials to ports for export to their home country, and deal with famines.
  • The big thrust towards economic integration came from the public sector in the age of planning. The Indian public sector created the managers, scientists, technicians, administrators and bankers who once formed the backbone of the Indian middle class. The public sector was thus an important driver of economic integration.
  • That role has now been taken over by the private sector. Large conglomerates are today not rooted in any one part of the country.

What are the lessons here for Kashmir?

  • Economic integration will be a very slow process, as was the case with the rest of India. The government may have to take the lead. The old strategy of putting up public sector industrial units in the quest for balanced regional development is no longer viable, given the financial health of enterprises owned by the government. Infrastructure spending is a more realistic option, especially if it pulls in more tourism.
  • Private sector investment will be needed, but that is unlikely to happen overnight given the current state of investment activity across India.
  • Massive migration will unleash the same cultural fears that periodically bubble up to the surface in other parts of India, and more so in a former state witnessing a huge political transition.
  • The political project will flounder unless it brings economic opportunity in its wake. For the moment, this need not detain us, but the other means of integration which is more practicable is the rapid increase in economic links between Kashmir and the rest of India as well as as much movement as possible for employment, education and other similar purposes into other parts of India.


Also read: Article 370 – Explained in detail