The lack of public investment deterred private industry in Kashmir, not Article 35A

08 November 2019
Shiekh Ashiq, the president of the Kashmir Chamber of Commerce and Industries, estimates that businesses in Jammu and Kashmir suffered losses of over Rs 8000 crore during the lockdown.
Mukhtar Khan / AP
Shiekh Ashiq, the president of the Kashmir Chamber of Commerce and Industries, estimates that businesses in Jammu and Kashmir suffered losses of over Rs 8000 crore during the lockdown.
Mukhtar Khan / AP


In his speech in parliament on 5 August, the home minister Amit Shah listed several reasons behind the government’s decision to repeal Article 35A of the Constitution and abrogate Jammu and Kashmir’s special status under Article 370. Key among them was the promise of greater economic growth. Shah argued that Articles 370 and 35A had kept Kashmir poor and stalled its development. He further claimed that the private industry had not invested in Kashmir because Article 35A disallowed them to buy land.

Shah failed to mention a significant factor in the private industry’s absence in Kashmir: that even public investment has been dismal in the former state. The central and state government have a poor track record of investing in Jammu and Kashmir and creating the public infrastructure needed to attract private investment.

According to Haseeb Drabu, an economist and the former finance minister of Jammu and Kashmir, private investments often follow the lead of public investments. He told me that private investments started trickling into India post the liberalisation of the Indian economy in 1991. While noting that he could accept the argument that private investments had not ventured into Kashmir post the nineties because of the militancy in Kashmir, he added, “What I am asking is what happened between 1947 and 1991?” Drabu continued, “Why was there no public investment at all? Public investments did not face any land restrictions as we speak. More than four-and-a-half-lakh kanals”—a unit of measurement popular in Kashmir, which is approximately one-eighth of an acre—“of land was occupied under the use of the central government. So they had no restrictions, why didn’t they invest?”

Drabu emphasised that in a number of states seen as industrially developed, it was the government that created the infrastructure and agreeable conditions for the private sector to enter. “Take the example of Maharashtra, Gujarat, Karnataka or Punjab,” he told me. “When no public investment has happened in Kashmir, how do you expect the private sector to go there?”

Drabu also questioned Shah’s rationale that land restrictions had deterred private investment. “Even in the original provision of 1927”—which defined state subjects who had the right to land use and ownership—“there was a clause which allowed the state to give land to corporates for investment purposes. The land could be given both in the form of a lease as well as a grant, and the lease would be extendable to 99 years, which is as good as ownership. So, the land restriction argument is completely rubbish; a hogwash.”

Kaushal Shroff is a staff writer at The Caravan.

Keywords: Kashmir Article 35A Article 370 Jammu and Kashmir Private Sector
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