Militancy reduces poverty in Kashmir

In the run up to the Vajpyee-Musharraf summit, reams of figures have appeared in the media pertaining to Kashmir. Mostly they are about the number of people killed. Yet everybody seems to keep silent on the most remarkable figure of all, which became public in February.

Kashmir has the lowest poverty ratio of any state in India (see accompanying table). According to the latest National Sample Survey (NSS), only 3.5 per cent of Kashmir’s population was below the poverty line in 1999-2000. The national average was as high as 26.1 per cent.

The NSS is one of the biggest and most widely quoted statistical authorities in India, but I have, on more than one occasion, wondered about the accuracy of its poverty reportage. So let us allow for some margin of error in the figure. But even if we double or treble the NSS figure, Kashmir will still have one of the lowest poverty ratios in India. Clearly something is happening which needs explanation.

A low poverty ratio often goes along with a high per capita income. Goa is the richest state, with an annual per capita income of Rs 29,548 in 1996-97, and has a low poverty ratio of 4.4 per cent. Maharashtra is the second richest state, with a per capita income of Rs 21,541. But its poverty ratio is 25 per cent, only just below the national average, showing that high incomes and low poverty do not always go together. Punjab is the third richest (Rs 20,908 per head) and has the third lowest poverty ratio (6.2 per cent).

Kashmir’s per capita income in 1996-97 was Rs 11,063, almost double that of Bihar, but almost half that of Maharashtra and Punjab. So, despite a very modest per capita income, Kashmir has achieved a fabulously low poverty ratio.

It has long been regarded as a backward hill state, but that is also true of Himachal Pradesh, whose poverty ratio is one of the lowest at 7.6 per cent. Hill states are not automatically poor. However, Kashmir has been ravaged by militancy for over a decade. Tourism has shrunk, development works of all sorts have taken a beating, and the administration is demoralised. Local revenue has collapsed, making the state pathetically dependent on hand- outs from New Delhi. Corruption and inefficiency are legendary. How then has a state like this reduced poverty so dramatically?

Historically, Kashmir has always been relatively egalitarian. Sheikh Abdullah’s land reforms in the early 1950s ensured that there were no large holdings. Specialisation in fruit and nuts has enabled even holders of an acre or two to obtain significant incomes. Handicraft production has supplemented farm income. So Kashmir has always had less poverty than its income would suggest. But never has it been anywhere near number one. What has changed in the 1990s?

Obviously, the insurrection. But insurrection normally means greater deprivation and poverty. Why then has the poverty ratio dropped?

One possibility is that NSS enumerators were too scared to venture deep into Kashmir because of the militancy, and cooked up figures on poverty. However, scared enumerators will typically cook up uncontroversial figures that will raise no eyebrows, not sensationally inflated data that might raise questions about its probity.

A better explanation is the huge expansion of armed forces in the state in the 1990s. India now has over 600,000 military and paramilitary personnel in Kashmir. Their purchasing power is pretty formidable in a small state of 10 million people. Tourism in the valley may have shrunk, but the armed forces represent tourists of another kind. Most tourists spend only a week in Kashmir, but men in uniform spend the whole year in the state. So, in some ways, every jawan is the equivalent of 52 tourists. They may buy fewer silk carpets and shawls than normal tourists, but are steady buyers of agricultural produce. And that probably has a major impact on local incomes, especially of small farmers.

Official data shows Kashmir’s economy growing at 4.3 per cent annually in the 1990s, well below the national average. But I suspect that the salaries of the armed forces do not figure in the state’s data. In fact, the state’s domestic product should include the salaries of all those carrying out duties there, which the armed forces are doing. If this correction is made, I suspect the state’s growth rate and per capita income will look much higher. That could explain the drop in poverty.

Even so, this is cold comfort for the people of Kashmir. The human suffering caused by militants and the armed forces, the indignity of occupation, the fear and trauma that seeps into all corners of life, all outweigh any drop in poverty as measured by consumption alone. Kashmir has suffered a really bad decade. The irony is that if peace returns, so too might poverty. The armed forces will go away.

What do you think?