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 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 $ 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, the Indian government has commenced work on the ambitious Kashmir Railway project which is being constructed by Konkan Railway Corporation and IRCON at a cost of more than US$2.5 billion. 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.
Two other railways, the Bilaspur-Mandi-Leh Railway and the Jammu-Poonch railway are planned.
| Year | Gross State 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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“Wise men read very sharply all your private history in your look and gait and behavior. The whole economy of nature is bent on expression. The tell-tale body is all tongues. Men are like Geneva watches with crystal faces which expose the whole movement.”
—Ralph Waldo Emerson (1803–1882)