JK Incurs Rs 21,000 Cr Losses In 85 Days

JK Incurs Rs 21,000 Cr Losses In 85 Days

1 September 2010
Rising Kashmir


Srinagar: The 80-day period of shutdowns and curfews in the valley has dented the economy of Jammu and Kashmir by a whopping Rs 21,000-crore and all the sectors including tourism, handicrafts and the nascent industries have been affected by the unrest. Several established and upstarting manufacturing companies, hotels and restaurants have laid off staff due to prolonged agitation which is showing no signs of ending. 'We do not have the exact data but layoffs have taken place mostly in the hotel and restaurant sector and the travel trade,' President of Kashmir Chamber of Commerce and Industry (KCCI) Nazir Ahmad Dar was quoted as having said by a wire news agency. Dar said although reducing the number of employees in the hotel industry was a common practice during the winters due to lean tourist arrivals, this year the lay offs have started at the peak of the tourism season in July. About the estimated losses suffered by the business community in Kashmir, the KCCI president said on an average the losses were to the tune of Rs 100 crore. 'Even on the limited days of normalcy we have had since June 11, there has been disturbance in some part or the other of the Valley. It will be safe to put the cumulated losses so far at Rs 8,000 crore,' he said. Dar said business in the state will flourish only after permanent peace is established, which was only possible when 'Government of India takes concrete steps to break the impasse'. Mushtaq Ahmad Chaya, the leading hotelier of Kashmir, said he was incurring a recurring loss of Rs 30 lakh per month due to the unrest. 'My salary bill per month is close to Rs 15 lakh while another Rs 15 lakh are incurred on overheads like maintaining the hotel properties, electricity bills, etc,' he said. Chaya, who owns prime hotel properties in Srinagar, Gulmarg and Pahalgam under the brand name of Grand Mumtaz, said the indications were that Kashmir will witness a bumper tourist season this year. 'Most of hotels were running up to 80-90 per cent occupancy during the early days of the season but that came crashing to 30 per cent by the end of June and now we are without business for two months exactly,' he said. The hotelier said as per the estimates, his 300 rooms would have fetched him at least a revenue of Rs 1 crore per month even in a lean season. 'The income would have almost doubled had we had a full season right up to ending October,' he said. Chaya employs 400 people, most of them from the Valley at his hotel properties, while another 1,500 people like taxi drivers, ponywallahs, travel agents and guides were earning their livelihood by indirect association with them. In the initial stages of the unrest, which began on June 11 when a teenager was killed after being hit by a tear smoke shell fired by police, the manufacturing sector had remained largely unaffected as the units were located in relatively secure industrial estates established by the state government. However, that has changed recently as groups of masked youth have indulged in vandalisation of some units in Lassipora Industrial Estate in Pulwama district and Rangreth Industrial Estate near the old Airport in the city. 'I was lucky that my staff, who were mostly from states like UP, Bihar and Orissa, fled at the early stages of agitation due to fear. Otherwise, I would have to pay them salaries without getting any work done,' Aijaz Ahmad Wani, who had last year set up a plastic manufacturing unit at an Industrial Estate said. But there were others who had to take the 'unpleasant decision' of sacking the entire work force. 'I had around 230 workers, most of them skilled workers, on my pay rolls. I could not afford to pay them without any revenues,' Bashir Ahmad, another unit holder, said. The strikes, curfews and restrictions are also costing the state government very dearly as they stand to lose Rs 161 crore for every day of shutdown in terms of sales tax, income tax and other levies. 'We can broadly calculate the loss to economy per day on pay bill; General State Domestic Product is Rs 35,000 crore per annum and trading and bank credit Rs 17,000 crore per annum. The figure approximately works up to Rs 161 crore per day,' an official of the finance department said. During the current year, the valley has witnessed either a shut down or curfew for nearly 85 days which translates into loss of over Rs 13,000-crore so far. The turmoil in the valley has also severely affected big businesses in Jammu region. 'Most of the supplies to Kashmir valley come from C&F agents based in Jammu. Since they are not able to despatch goods to Kashmir, they are suffering heavy losses,' an official of the sales tax department said.


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