Economy
Jammu and Kashmir's economy is predominantly dependent on agriculture and allied activities. The Kashmir valley is also known for its sericulture and cold-water fisheries. Wood from Kashmir is used to make high-quality cricket bats, popularly known as Kashmir Willow. Kashmiri saffron is also very famous and brings the state a handsome amount of foreign exchange. Agricultural exports from Jammu and Kashmir include apples, barley, cherries, corn, millet, oranges, rice, peaches, pears, saffron, sorghum, vegetables, and wheat, while manufactured exports include handicrafts, rugs, and shawls.
Horticulture plays a vital role in the economic development of the state. With an annual turnover of over Rs. 300 crore, apart from foreign exchange of over Rs. 80 crore, this sector is the next biggest source of income in the state’s economy. The region of Kashmir is known for its horticulture industry and is the wealthiest region in the state. Horticultural produce from the state includes apples, apricots, cherries, pears, plums, almonds and walnuts.
The Doda district has deposits of high-grade sapphire. Though small, the manufacturing and services sector is growing rapidly, especially in the Jammu division. In recent years, several consumer goods companies have opened manufacturing units in the region. The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has identified several industrial sectors which can attract investment in the state, and accordingly, it is working with the union and the state government to set up industrial parks and special economic zones. In the fiscal year 2005–06, exports from the state amounted to Rs. 1,150 crore. However, industrial development in the state faces several major constraints including extreme mountainous landscape and power shortage. The Jammu & Kashmir Bank, which is listed as a S&P CNX 500 conglomerate, is based in the state. It reported a net profit of Rs. 598 million in 2008.
The Government of India has been keen to economically integrate Jammu and Kashmir with the rest of India. The state is one of the largest recipients of grants from New Delhi, totaling US$812 million per year. It also has a mere 4% incidence of poverty, one of the lowest in the country.
In an attempt to improve the infrastructure in the state, Indian Railways is constructing the ambitious Kashmir Railway project at a cost of more than US$2.5 billion. Trains run on the 119 km Baramula-Qazigund section. The 17.5 km Qazigund-Banihal section through the 11 km long Pir Panjal Railway Tunnel has been constructed. Udhampur-Katra section may be ready in 2013. The Katra-Banihal section is under construction. The route crosses major earthquake zones, and is subjected to extreme temperatures of cold and heat, as well as inhospitable terrain, making it an extremely challenging engineering project. It is expected to increase tourism and travel to Kashmir. Two other railway lines, the Bilaspur-Mandi-Leh railway and the Jammu-Poonch railway have been proposed.
| Year | State's Gross Domestic Product (in million INR) |
|---|---|
| 1980 | 11,860 |
| 1985 | 22,560 |
| 1990 | 36,140 |
| 1995 | 80,970 |
| 2000 | 147,500 |
| 2006 | 539,850 |
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