JK suffered Rs. 160 bln loss during Kashmir unrest

Due to complete halt of economic activity and loss of property

by Saher Naqvi

Jammu and Kashmir (JK) suffered losses amounting to over Rs. 160 billion during the five-month long unrest in the Kashmir Valley, according to the Economic Survey 2016 report. This loss was due to the complete halt of economic activity coupled with loss of property worth crores of rupees.

The report tabled by Minister of Finance Hasseb Drabu on 10 January 2017 stated that losses caused due to the unrest from 8 July 2016 to 30 November 2016 are estimated at more than Rs. 160 bln.

It further stated that the scrapping of internet services, mobile and phone services for long spells during the turmoil made communication in the state very difficult. Hartals, bandhs, stone pelting, curfews and restrictions immobilised life in all the 10 districts of the Valley.

The estimated loss suffered by the industry during shutdowns and curfews was pegged at Rs. 132.9 billion, comprising Rs. 65.5 billion in the private sector and Rs. 67.1 billion in the government sector.

In addition, medical services in the state were badly affected. Chronic patients suffering from cancer, heart diseases and those requiring dialysis, continue treatment and check up had to suffer a lot. Lack of primary treatment resulted in death of some of the patients.

The report stated that the security-related expenditure is over and above the losses caused due to the 2016 unrest. The conflict has also reduced per capita gross domestic product (GDP) growth, foreign direct investment (FDI) inflow, exports and trade flow in the state. It has reduced domestic investment and savings, redirected public expenditure to security-related expenditure and reduced tourist inflow, tourism receipts and demand for transportation.

The number of tourist who visited the Valley in 2015-16 stood at 623,932 including 220,490 Amarnath yatris. The tourist season started in April 2016 and was in full swing till 7 July 2016. The remaining four months remained completely tense and registered closure of all activities, resulting in almost zero arrival of tourists in the Valley.

The disappearance of tourists in the Valley during four peak months resulted in loss of business to hoteliers, restaurants, houseboats, handicrafts, transporters, shikarawallas and so on. The revenue loss in the second quarter of 2016-17 was Rs. 75.2 million compared to revenue realisation of Rs. 93.7 million in the second quarter of 2015-16.

References
1. http://www.tribuneindia.com/news/jammu-kashmir/state-lost-rs16-000-cr-during-5-month-unrest-govt-survey/348675.html
2. http://economictimes.indiatimes.com/news/politics-and-nation/jammu-and-kashmir-suffered-rs-16000-crore-loss-during-kashmir-unrest/articleshow/56446043.cms
CMIE STATISTICS
Unemployment Rate
Per cent
5.5 -0.0
Consumer Sentiments Index
Base September-December 2015
94.7 0.0
Consumer Expectations Index
Base September-December 2015
96.5 0.0
Current Economic Conditions Index
Base September-December 2015
91.9 0.0
Quarterly CapeEx Aggregates
(Rs.trillion) Mar 16 Jun 16 Sep 16 Dec 16
New projects 3.31 1.54 2.34 1.42
Completed projects 2.26 0.90 2.15 0.76
Stalled projects 1.04 1.32 0.35 0.44
Revived projects 0.63 0.42 0.51 0.17
Implementation stalled projects 0.92 0.50 0.57 0.79
Updated on: 23 Feb 2017 9:20AM
Quarterly Financials of Listed Companies
(% change) Mar 16 Jun 16 Sep 16 Dec 16
All listed Companies
 Income -0.2 -0.9 2.1 6.4
 Expenses 0.9 -0.4 1.8 6.7
 Net profit -29.1 -3.5 15.3 36.9
 PAT margin (%) 4.9 6.9 7.0 6.0
 Count of Cos. 4,395 4,353 4,313 4,204
Non-financial Companies
 Income -2.1 -2.5 0.6 6.1
 Expenses -3.9 -2.9 -0.2 7.7
 Net profit 4.8 10.3 27.5 21.0
 PAT margin (%) 6.2 7.4 7.0 6.1
 Net fixed assets 3.8 -9.2
 Current assets 3.1 8.1
 Current liabilities 10.6 11.5
 Borrowings 6.7 3.1
 Reserves & surplus 7.9 8.6
 Count of Cos. 3,455 3,426 3,393 3,316
Numbers are net of P&E
Updated on: 23 Feb 2017 9:28AM
Annual Financials of All Companies
(% change) FY13 FY14 FY15 FY16
All Companies
 Income 11.9 9.3 4.3 0.2
 Expenses 12.1 9.2 4.3 0.3
 Net profit 1.0 -4.2 2.7 -12.1
 PAT margin (%) 3.6 3.2 3.3 3.4
 Assets 14.1 12.2 8.9 7.7
 Net worth 9.5 9.4 8.2 6.2
 RONW (%) 6.8 6.0 6.1 5.7
 Count of Cos. 23,087 20,259 18,916 14,317
Non-financial Companies
 Income 11.1 8.9 3.3 -1.1
 Expenses 11.4 8.6 3.4 -1.9
 Net profit -8.9 -5.6 -3.6 14.1
 PAT margin (%) 2.4 2.1 2.2 3.1
 Net fixed assets 12.9 11.3 12.3 10.8
 Net worth 7.7 8.3 6.6 5.0
 RONW (%) 5.4 4.8 4.8 6.1
 Debt / Equity (times) 1.1 1.1 1.1 1.0
 Interest cover (times) 2.0 1.9 1.9 2.1
 Net working capital cycle (days) 71 69 68 68
 Count of Cos. 17,721 15,860 14,813 11,415
Numbers are net of P&E
Updated on: 21 Feb 2017 3:48PM

Low government spending and low consumer expectations to keep growth subdued

Modest increase in capital expenditure; no incentive to private players

Rs.5.34 trillion or 3.2% of GDP