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Article 370 And Economy of Jammu And Kashmir


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Article 370 And Economy of

Jammu And Kashmir

Inter-Relation and Impact

Saurabh Pandey

Pranav Tanwar

EDUCREATION PUBLISHING (Since 2011)

www.educreation.in


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Here is a thing my heart wishes the world had more of:

I heard it in the air of one night when I listened

To a mother singing softly to a child restless and angry in the

darkness.

- Carl Sandburg

To Maa


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Acknowledgement

To begin with I thank almighty God for giving me the courage to

write my first book. Then to my parents for their endless support

and having faith in their son.

I am extremely grateful to my teachers for giving their valuable

time, advice and encouragement.

Thanks to my siblings – Seema Vashwaner Dwivedi, Sonal Pankaj

Pandey, Gaurav, Gayatri, Varsha for their constant guidance and

inspiration.

And, to Sagar, Ayushi, Shriya, Golden Triangle and my friends.

- Saurabh Pandey

To God, late forefathers, Parents, Uncle, Aunt, Anshika, Avani,

Sidharth, Akanksha, Rai, Aakash, Adil and Tayyab.

For verily love knows not mine or thine.

- Pranav Tanwar


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Preface

Article 370 of the Constitution of India relating to special status of

the State of Jammu and Kashmir is now sixty-seven years old. It is

the only state in the Union of India which negotiated the terms of

its membership with the Union. The state acceded to India under

‘unique circumstances’ and the ‘unique problems’ existing within

the state require a ‘unique solution’. One such problem is the

impact of Article 370 on its capable economy.

Kashmir’s tourism is an under developed sector which nevertheless

fuels its economy. It is abundantly rich in natural resources

including fertile lands, rivers, and various other resources which

otherwise would have contributed towards a flourishing economy.

Despite this, the economy of the state has not been able to grow at

an expected pace. The authors argue that it is because of the

presence of Article 370 and the resulting socio-political conditions,

the economy is in a sorry state.

Political parties have ensured that no law is adopted in the state

which would make them accountable for their (mis)deeds. The

constitutional provision giving special status ensures that no

outsider is able to buy land or start any business, which makes it

difficult to invest in the state. Also, the provision gives a limited

space to the central government in the economic domain and in

consequence to pool substantial resources for consolidating the

economy. The political conditions in the state have seldom

provided it stability, ultimately resulting in loss of revenue.

The authors also draw a comparison of the state’s economic

development with other states in the backdrop of laws such as the


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Goods and Services Tax Act which are made for the whole

country. The authors’ idea is to bring forth how this politico-legal

provision has shaped the economy of the state and how the

functioning is to be changed for a better future. In conclusion the

authors suggest how the misuse of Article 370 is to be corrected

for improving the state’s economy


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Content

Sr. Tittle Page

1 INTRODUCTION 1

2 ACCESSION OF STATE 5

2.1 GEOGRAPHY AND CLIMATE OF

STATE

7

2.2 DEMOGRAPHY OF STATE 7

3 UNDERSTANDING ARTICLE 10

3.1 EXTERNAL FACTORS 12

4 FEATURES OF STATE ECONOMY 14

5 ECONOMY OF KASHMIR 20

5.1 STATE FINANCES 27

5.2 KASHMIR TOURISM 30

5.3 INITIATIVES TAKEN BY

GOVERNMENT

37

5.4 NITI AAYOG

39

6 ARTICLE 370 AND ECONOMY OF

KASHMIR

41

6.1 CONFLICT CREATES

MACROECONOMIC INSTABILITY

AND CRISIS VOLATILITY

42

6.2 COMPOSITION OF GSDP 43


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6.3 LOSS OF HUMAN RESOURCE

CAPITAL

43

7 COMPARATIVE ANALYSIS 49

7.1 ABOUT HIMACHAL PRADESH 49

7.2 ECONOMY OF STATE 49

7.3 J&K ECONOMY WITH AND

WITHOUT CONFLICT IN

COMPARISON TO THE STATE OF

HIMACHAL PRADES

52

8 SUGGESTIONS 55

9 CONCLUSION 58


Inter-Re Article 370 And Economy of Jammu And Kashmir

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1. Introduction

Jammu and Kashmir (J&K) is the northern-most state of India

and shares its borders with Himachal Pradesh and Punjab, and the

neighbouring countries of Pakistan, China and Afghanistan. The

state consists of three regions - Jammu, the Kashmir valley and

Ladakh. The natural beauty and picturesque locations have made

it a favoured destination for tourists across the world. Jammu is

famous for its temples, while the Kashmir Valley is known for its

lakes and gardens. On 26 January 1950, the Constitution of India

came into force with a unique provision – Article 370. Article 370

of the Constitution of India relating to special status of the State of

Jammu and Kashmir is now sixty-eight years old. It is the only

state in the Union of India which negotiated the terms of its

membership with the Union. The constitution of India by virtue of

article 370 gives a special status to Jammu & Kashmir, while the

rest of other states of the country do not enjoy the same. Whatever

be the reason or the background, it provides a distinct feature to

the federal character of the Indian constitution. It is again by virtue

of this article that the J&K state maintains its own constitution and

law. All the Acts and laws passed by the parliament are subject to

the ratification by the state legislature to become applicable in

J&K. By way of this distinct feature, the J&K enjoys the benefits

of an autonomous political state. But despite this feature, the J&K

state has so far not been able to achieve economic independence

due to the bad governance and the indifferent and negative attitude

of the successive governments.


Saurabh Pandey, Pranav Tanwar

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According to Article 370 of Indian Constitution,

370. Temporary provisions with respect to the State of Jammu and

Kashmir

(1) Notwithstanding anything in this Constitution,

(a) the provisions of Article 238 shall not apply in relation to the

State of Jammu and Kashmir;

(b) the power of Parliament to make laws for the said State shall

be limited to:

(i) those matters in the Union List and the Concurrent List

which, in consultation with the Government of the State,

are declared by the President to correspond to matters

specified in the Instrument of Accession governing the

accession of the State to the Dominion of India as the

matters with respect to which the Dominion Legislature

may make laws for that State; and

(ii) such other matters in the said Lists as, with the concurrence

of the Government of the State, the President may by order

specify Explanation For the purposes of this article, the

Government of the State means the person for the time

being recognized by the President as the Maharaja of

Jammu and Kashmir acting on the advice of the Council of

Ministers for the time being in office under the Maharajas

Proclamation dated the fifth day of March, 1948 ;

(c) the provisions of Article 1 and of this article shall apply in

relation to that State;

(d) such of the other provisions of this Constitution shall apply in

relation to that State subject to such exceptions and

modifications as the President may by order specify: Provided

that no such order which relates to the matters specified in the

Instrument of Accession of the State referred to in paragraph

(i) of sub clause (b) shall be issued except in consultation with


https://indiankanoon.org/doc/1193525/







Inter-Re Article 370 And Economy of Jammu And Kashmir

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the Government of the State: Provided further that no such

order which relates to matters other than those referred to in

the last preceding proviso shall be issued except with the

concurrence of that Government

(2) If the concurrence of the Government of the State referred to

in paragraph (ii) of sub clause (b) of clause ( 1 ) or in the

second proviso to sub clause (d) of that clause be given before

the Constituent Assembly for the purpose of framing the

Constitution of the State is convened, it shall be placed before

such Assembly for such decision as it may take thereon

(3) Notwithstanding anything in the foregoing provisions of this

article, the President may, by public notification, declare that

this article shall cease to be operative or shall be operative

only with such exceptions and modifications and from such

date as he may specify: Provided that the recommendation of

the Constituent Assembly of the State referred to in clause ( 2

) shall be necessary before the President issues such a

notification.1

The J&K being an agricultural state, its economy mostly depends

on its agriculture products, which include grain, maize, fruit,

poultry and milk. But the state’s main revenue comes from the

taxes. Though there is a lot of potential in tourism sector which

can fetch huge earnings, but the basic infrastructure required for

its promotion in terms of international standards has not been

created and built so far.2

Article 370 had grave impact on the state’s economy. Political

parties have ensured that no law is adopted in the state which

1 The Constitution of India, 1950. 2 Abdul Rashid Khan , Of Article 370 and Economic Independence, May 24

2012, Available at-https://www.greaterkashmir.com/news/opinion/of-article-

370-and-economic-independence/121313.html(accessed on-15.11.2018).




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