Poverty, Inequality & Unemployment in the

State: Magnitude and Implications.

NAME: SALEHA QURESHI
ROLL NO: 20870012
SEMESTER VITH
B.A ECONOMIC HONORS
SUBJECT: J&K ECONOMY
 POVERTY

 Despite being industrially backward and conflict-affected, J&K has

lower poverty rate than many prosperous Indian states. Rural Kashmir
saw a remarkable 90% decline in poverty from 1973-74 to 2004-05, the
highest among all states. In 1999-00 and 2004-05, poverty rates were
4% and 4.6% respectively, much lower than national averages of 27.1%
and 28.3%. Although J&K's poverty estimates occasionally exceeded
Punjab and Kerala, they were half the national average. Urban poverty
was comparable to other states, but J&K's poverty reduction was
smaller than some states, with a 62.9% decline compared to several
prominent Indian states. This disparity mirrors common traits in
developing economies: agricultural employment, informal wages,
seasonal labor, limited jobs, scarce industrialization, and skewed
policies. J&K, hindered by geography and politics, couldn't fully
capitalize on liberalization or a transformative push in 75 years.
 POVERTY DYNAMICS

 J&K's poverty has steadily decreased over time, declining from 25.44% in 1983-
84 to 10.57% in 2011-12. The adoption of a modified consumption expenditure
calculation method in the 55th round led to a significant drop in poverty. The
sustained reduction is attributed to higher economic growth, raising per capita
incomes through the multiplier and "trickle-down" effects. Despite slower GDP
growth compared to other states, J&K's economy has consistently expanded,
with an average annual growth rate of 12.54% from 1980-81 to 1999-00 and 5%
from 2000-01 to 2011-12. According to the latest National Multidimensional
Poverty Index (MPI), based on National Family Health Survey (NFHS)-5 (2019-
21) and NFHS-4 (2015-16), J&K has witnessed a substantial decline in
multidimensional poverty. The report found that the multidimensional poverty
levels in J&K are lower than the national average. The national MPI for 2019-
2021 is 14.96 per cent. In J&K, the percentage of the multidimensional poor
population has reduced from 12.56 per cent to 4.80 per cent, with over 1 million
people emerging from poverty.
 CAUSES OF LOW POVERTY

 Conflict and Unrest: Ongoing conflicts and political instability in J&K have
disrupted economic activities, displaced people, and hindered development efforts,
contributing to poverty.
 Limited Economic Opportunities: The region's industrial backwardness and lack
of diverse economic sectors can lead to limited job opportunities and low income
levels.
 Geographical Challenges: J&K's mountainous terrain and harsh climate can make
it difficult to access resources, markets, and services, affecting economic development
and opportunities.
 Education and Skill Gaps: Limited access to quality education and skill
development programs can result in a less skilled workforce, affecting employment
and income potential.
 Agricultural Dependence: While agriculture is a major occupation, dependence on
traditional farming practices, lack of modern technology, and vulnerability to weather
changes can affect productivity and income.
 Infrastructure Deficits: Poor infrastructure, including inadequate roads, electricity,
and healthcare facilities, can hinder economic growth and limit opportunities.
 INEQUALITY IN JAMMU AND KASHMIR

 Inequality in J&K is relatively low. The Gini Coefficient, which

measures inequality, has been under 0.30% from 1983-84 to 2011-12.
This is good and below the national average. It has increased a bit over
time. Most developing countries have higher inequality, around 0.50 to
0.60. Among regions in J&K, the least inequality is in Kashmir,
followed by Chenab and Jammu areas. The coefficient of variation also
shows low inequality in J&K's levels are much lower than the All India
average, except in 1987-88. J&K has the lowest debt-to-asset ratio in
India, suggesting that the average person in J&K might have more
resources than in other parts of India.-In J&K, only 2% are agricultural
laborers compared to 23% in India. Also, 23% earn from their own
cultivation, which is the highest in India. These facts show that J&K is
more equal compared to other states in India, with an economy where
resources and opportunities are more evenly distributed.
 CAUSES OF INEQUALITY

 Geographical Disparities: Different regions within J&K might experience varying

levels of development due to geographical factors, leading to uneven distribution of
resources and opportunities.
 Conflict Effects: Conflict can exacerbate inequality by displacing people, disrupting
livelihoods, and diverting resources away from development.
 Access to Resources: Unequal access to land, water, and other resources can lead to
disparities in agricultural productivity and livelihoods.
 Gender Inequality: Traditional gender roles and limited opportunities for women's
education and employment can contribute to gender-based income disparities.
 Limited Infrastructure: Unequal distribution of infrastructure like roads, schools, and
healthcare facilities can lead to unequal access to basic services.
 Skewed Policies: Policies that do not adequately address the needs of marginalized
groups or that favor specific sectors can perpetuate inequality.
 Lack of Social Safety Nets: Absence of comprehensive social safety nets can leave
vulnerable populations without adequate support during times of economic hardship.
 UNEMPLOYMENT IN J&K

 The unemployment situation in J&K has been concerning. It started at 3.65%

in 1993-94, decreased for a while, but then started rising continuously.- Unlike
poverty and inequality, unemployment has been higher than the national
average every year. Male unemployment was lower than the national average
in 1999-00 and 2018-19, but female unemployment has been increasing over
the years, reaching a high of 16.6% in 2018-19. This increase in female
unemployment could be due to more education and fewer social constraints
leading to more women entering the workforce. Recent data in 2021 showed
an overall increase in unemployment by 12.6%, with educated unemployment
being as high as 46.3%, the second highest in India after Kerala. The Centre
for Monitoring Indian Economy (CMIE) reported that by March 2022, the
overall unemployment rate further rose to 25%, second highest in India after
Haryana. This recent spike in unemployment is because of three consecutive
lockdowns in J&K: one after the Article 370 change in August 2019, and two
due to the Covid-19 pandemic in 2020 and 2021.
 CAUSES OF UNEMPLOYEMENT

 Conflict and Unrest: The ongoing conflicts and problems in the region disrupt businesses and
prevent new jobs from being created.
 Few Industries: There aren't many different types of businesses in J&K, so there aren't enough jobs
for everyone.
 Skills Mismatch: Sometimes, the skills people have don't match the skills needed for available jobs.
 Lack of Education: Not having enough education can make it harder to find good jobs.
 Limited Infrastructure: Roads, electricity, and other things needed for businesses to work well are
not always available, which can stop businesses from growing and hiring more people.
 Seasonal Work: Many jobs are only available during certain times of the year, which can leave
people unemployed during other times.
 Lockdowns and Unpredictability: Situations like lockdowns due to conflicts or emergencies like
COVID-19 can stop businesses from operating, leading to job losses.
 Cultural Factors: Sometimes, traditional beliefs or practices might limit job opportunities for
certain groups, especially women.
 Few Entrepreneurial Opportunities: It's hard to start new businesses because of challenges like
lack of money or resources.
 Limited Investment: There might not be enough money invested in new businesses, which means
fewer jobs are created. All of these reasons combined can lead to people not being able to find work in
Jammu and Kashmir.
THANK YOU