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Jammu and Kashmir: labour under conflict

19 September 2008

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Asia Monitor Resource Centre

Jammu and Kashmir: labour under conflict


by Sanjiv Pandita

The region of Jammu and Kashmir (commonly called Kashmir) is composed of three geographical divisions: Jammu, Kashmir, and Laddakh. Both India and Pakistan govern parts of the area; Pakistan-controlled Kashmir is known as ‘Azad’ or independent Kashmir and the area India controls is known as the state of Jammu and Kashmir. This essay highlights labour conditions in Indian Kashmir only.

Summer in Kashmir is always special. While most of India reels under the sweltering summer heat, the temperature in the valley is pleasant and the air fills with fragrant blossoms. Summer 2004 is special for Abdul Majid who operates a Shikara (a type of boat) in the picturesque Dal lake, Srinagar. His eyes sparkle with hope yet his wrinkled face somehow tells the story of untold miseries that have fallen on this beautiful landscape. His optimism is inspired by the huge number of tourists that have flocked to Kashmir this year. “I have every reason to smile,” says Abdul, “Dal used to be full of tourists in summer and I used to make a decent living. However, for the past 14 years hardly any tourists have visited and it has been a hard struggle of survival for me and my family. This year there have been already lots of tourists and I have been busy like the old times and if they continue to come like this then God willing I will make ends meet. Yet, I keep my fingers crossed as nothing is certain about Kashmir.”1

His apprehension is endorsed by the presence of army personnel and armoured vehicles along the Boulevard Road (along Dal Lake). Even though Kashmir’s valleys, lakes, and gardens are packed with tourists, one cannot miss the soldiers’ presence, army bunkers, and checkpoints across the state. Peace is very fragile, as are the hopes of hundreds of thousands of workers in Jammu and Kashmir who toil everyday to sustain their families under the pervasive shadow of violence. 14 years of violence and political turmoil has taken a huge toll on the working population of the state.

Background Information

The state of Jammu and Kashmir (J&K) is the northernmost Indian state, sharing borders with Punjab and Himachal Pradesh and international boundaries with Pakistan (in Jammu, Kashmir, and Laddakh divisions) and China (in Laddakh). Administratively the state is divided into two; Kashmir with eight districts (including two districts of Laddakh) and Jammu with six districts. Srinagar (Kashmir division) is the state summer capital of the state and Jammu (Jammu division) is the winter capital.

As per the census of the year 20012 the total state population was 10,069,9173 , 0.98 percent of India’s population. The state has seen more than two percent annual population growth in the past two decades. It is diverse in terms of geography, people, and cultures. The landscape varies from hot summer plains in Jammu to snow-capped mountains of Laddakh, rising sharply from 1,000 feet to 28,250 feet above sea level in just four degrees of latitude. The climate varies from tropical in the Jammu plains to semi-arctic in Laddakh to temperate in Kashmir and the mountain regions of Jammu. Population density also varies from 531 persons per square kilometre (ppsk) in Srinagar district to three ppsk in Leh district. Diverse ethnic groups inhabit the state; major groups are Dogras, Kashmiris, Gujjars, Laddakhis, and Paharis.

Development of J and K relative to rest of India

Dimension and Variables India Jammu and Kashmir
Level Rank
Population Structure and Distribution
Population density, 2001(per sq km) 324 99 31
Status of Women
Sex ratio, 2001 (females per 1,000 males) 933 900 26
Female literacy rate, 2001 54.16 41.82 33
Net sown area 1996-97 (hectare) 142,819 733 16
Net sown area irrigated 1996-97 (hectare) 55,143 313 16
Agricultural production value, 1995 (Rupees per capita) N.A 1125 N.A
Industrialisation and Urbanisation
Proportion of urban population, 2001 (percent) 27.78 24.88 20
Industries per 100,000 of population, 1999 13 4 19
Per capita electricity consumption (1997-98) (kw h) 349.1 233.7 20
Social Development
Population below poverty line 1993-94 (percent) 35.97 25.17 23
Work participation rate, 2001 (percent)
Literacy rate, 2001 (percent) 65.38 54.46 33

Sources: Census of India, 2001 and Statistical Abstract of India, 1999.

Despite the natural beauty of J&K, according to socio-economic development indicators it is one of the most backward states in India. The literacy rate here is just 54 percent against the national rate of 65.38 percent, better only than Bihar and Jharkhand. The state has the lowest level of industrialisation; most people are dependent on farming. A small section of workers is employed in the secondary and tertiary sectors.

The Conflict

J&K has a history of conflict. Both India and Pakistan administer parts of J&K divided by the ceasefire line, known as the Line of Actual Control (LOC). Both India and Pakistan claim rights to the whole state. India has fought three wars with Pakistan over Kashmir. However, the history of the present conflict dates back to 1989 when armed militancy started due to various reasons like the break down of political and democratic institutions in the state. Various youth groups with the alleged support of Pakistan started an armed struggle against the Indian government. Soon arms were taken up by diverse groups with diverse motives; some sought independence from both India and Pakistan and others wanted the state to be part of Pakistan. The Indian government responded by sending in a huge army (that is still there) and a low intensity war has continued for the past 14 years. A land famous for its Sufi culture and religious tolerance, where Hindus and Muslims used to have shrines in common, bomb blasts, crossfiring, and army crack-downs have become routine, killing thousands of persons, mostly civilians. J&K is one of the world’s most highly militarised areas. Indian and Pakistani troops exchange regular fire along the LOC, often resulting in civilian deaths and destruction of their property. In January 2002, after an attack on the Indian parliament, India and Pakistan reached the brink of war with more than a million troops deployed along the border (India 700,000; Pakistan 400,000).

Developmental activities came to a virtual standstill in the early 1990s and a large portion of state resources were (and still are) used to ‘combat terrorism’ which diverted funding for most major development projects. This has resulted in the bankruptcy of state finances. In addition the tax base of J&K eroded and state income could not grow due to difficulty in collecting user charges and sales taxes. In 2000-2001 there was a revenue deficit of 9.61 billion rupees4 while the fiscal deficit increased to 18.73 billion rupees, leading to further deterioration of the basic infrastructure (which was already poor).


J&K provides rare employment opportunities, which is perhaps one of the impediments to long lasting peace. The population of the state has increased from six million in 1981 to about 10 million in 2001. The number of workers also increased by 39 percent bringing the number to 3.68 million in 2001, of which formal workers constituted 2.53 million and marginal workers constituted 1.15 million. About 43.36 percent of the total workforce were cultivators, 6.74 percent were agricultural labourers and the remaining 49.9 percent were engaged in other activities including household industries. Female workers contributed about 28.4 percent to the total workforce and the share of female marginal workers was 66.84 percent of total female workers.

The state faces a huge unemployment problem and thousands of youths queue outside J&K’s 17 employment exchanges hoping for a job. Shiv Kumar, a graduate from Jammu, has been unemployed for more than three years after the garment factory where he worked closed in the Bari Brahmina industrial complex, Jammu. He registers weekly hoping to find work at the employment exchange, but the exchanges are a joke. In 2000 38,400 persons registered in employment exchanges and jobs were provided to only 50 people i.e. 0.14 percent. Even the number of persons registering at the exchanges have declined steadily since 1991. Against the 56,800 registrations in 1991, only 38,400 registrations were made in 2000. Shiv Kumar says, “There is no point in registering; the government has simply no capacity to provide jobs. We unemployed are all worried and unsure about our future.” Many people in J&K believe that these conditions are responsible for many frustrated youths turning to violence. The official number of unemployed in 2000 was about 168,000, however, this is the figure of persons who register at employment exchanges; considering the fact that only a tiny percentage of persons actually register, the real unemployment figure is much greater, a really alarming situation in a state already torn by violence.

Unemployment reasons are simple; employment generation has simply not kept pace with the increasing population; minimal industrial development is unable to absorb the large pool of school leavers; there is a virtual freeze on state government recruitment as the government jobs have reached saturation point.

Major Economic Sectors

Statistics from the J&K state, show that the major economic sectors have not changed for more than a century. However, most sectors struggle to survive, threatening the livelihoods of hundreds of thousands of workers. In Srinagar property prices have been rising, many believe fuelled by the hawala5 economy with money sent to fund rebel forces. Another major economy in J&K is locally dubbed the ‘Olive Green Economy’, which is dependent on 3–500,000 Indian soldiers in the state.


“We struggle to make ends meet,” says Rasool Sheikh a small farmer in Pallhan, Kashmir. “We often get caught up in the fight between security forces and militants. Two farmers were killed recently when security forces believed them to be fleeing militants who had fired upon them. It seems nothing is going right as nature is also unleashing its full wrath upon us as we have faced a severe drought for the past few years. The Government promises relief packages that never seem to reach us. Moreover, under the present atmosphere it is almost impossible to get bank loans for survival.”

Krishna Devi lived in a border village in Akhnoor, Jammu. Her family now lives there in a migrant camp; she said, “We were forced out of our villages by the constant shelling across the border. Most of our cattle died; our fertile fields have gone barren. We have been turned into beggars from a respectful life.”

Agriculture, the predominant economic sector supporting 80 percent of the population, is marred by low productivity. Agriculture and allied activities employ 70 percent of the workforce and contribute 60 percent to the state economy. The conflict has put the lives of cultivators and farm labourers in perpetual danger, especially those who work along the LOC. The average land holding in the state is 0.73 hectares as per the 1995 Agriculture Census; the only Indian state with lower land holding than J&K is Kerala (0.33 ha). The other prominent problem in farming is a lack of innovative technologies to increase productivity, which is caused by local farmers’ lack of access to technologies used elsewhere and also because of the government’s failure to help farmers develop skills. There is a wide gap between the state agricultural research institute and the cultivators. Credit facilities for farmers are completely absent and there are no crop insurance schemes.


“Wular lake is our lifeline and it is shrinking,” says Ghulam Hasan a 55 year-old fisherman, “I have seen it shrinking and seen its fresh crystal waters turn into muddy marshland. They say it is the largest lake in Asia, I doubt it now. 14 years of violence have left it even more neglected with little efforts to save it. All we have seen is dead bodies floating on it. I hope the authorities realise its importance as it provides 60 percent of the fish for the Kashmir valley and more than 12,000 families depend directly on its resources.”

Fisheries are the other main neglected area. The lakes and rivers of Kashmir offer huge potential for development and thus employment. In 1997, 9,655 workers were engaged in fishing and 25,816 people depended on the industry for their livelihood. Lack of proper research and infrastructure has kept this sector underdeveloped. Only 1,183 fish farmers are trained in J&K annually compared to over 500,0000 in the whole country.

Sericulture (silk production)

Silk is a traditional occupation in J&K, which can produce fine quality silk for export. Kashmir introduced silk, far better in quality and quantity than Italy and Japan 60 years ago because Kashmir’s special climate is ideal for rearing univoltine and bivoltine silk worms for cocoon production. These cocoons are way superior to multivoltine worms produced elsewhere. Yet, the industry that had a glorious past has been in steady decline for years. In 1999-2000, 25,280 families engaged in sericulture, a fall from 38,500 families in 1980-81. Apart from armed conflict, a main reason for the decline is government apathy. There have been no efforts to train farmers and their families and to bring new technologies. The average cocoon production per ounce of silkworm in the state is low compared to the national average, 38 kg per ounce. Since 1989, (about the start of the conflict) the government has not assured a minimum rate for cultivators, which has led to their restricted participation in mulberry cultivation as they are not sure if it is worth it. The government claims that it is difficult to sell Kashmiri silk on the international market due to cheaper silk from China.


J&K hosts insignificant industrialisation. Most enterprises are small- and medium-scale, mostly in traditional sectors with some new areas like food processing, agro-based units, and metallic and non-metallic products.

Registered industrial units and employment

Year No. of units No. of workers
1995 35,641 154,621
1996 36,829 159,509
1997 38,135 164,989
1998 39,542 171,660
1999 40,729 177,603
2000 42,042 183,297
2001 42,808 187,399

Source: Industrial Statistics, J&K, 2000-2001

The table above shows industrial employment is insignificant considering J&K’s 10 million population. Annual production value has declined from 308 million rupees in 1995-96 to 217.87 million rupees in 2000-01; the number of units set up, employment generation, and production declined in 2000-01.

Industrial promotion agencies, all run by state government, include the J&K State Industrial Development Corporation, J&K Small-Scale Industrial Development Corporation Limited, Small Industrial Services Institute, and the Directorate of Industries and Commerce. Their function to promote industrialisation has obviously been ineffective. Despite an attractive package of incentives, from central and state governments, to attract investment to J&K, the industrial scenario is dismal.

Though the number of small-scale enterprises has risen, there are many cases of ‘sick’ (unprofitable) units and many units that are closed or ‘missing’. Most missing units occur as they try to take improper advantage of the incentives or leave due to the conflict; they appear on paper but do not exist physically.

In the table below more than 57 percent of surveyed units were either closed or ‘missing’.

Classification of units in Census 1998

Type of unit Total %
Functional 15,145 41.48
Sick 306 0.84
Closed 4,840 13.26
Untraceable 16,219 44.42
Total Surveyed 36,510 100

Source: Industrial Statistics, J&K, 2000-2001

Privatisation of Public Sector Units

There are about 20 public sector units (PSU) in the state. The first, J&K Minerals, started in 1960 to exploit mineral resources. According to the government only four of them make profits, all others are making losses. The reason identified by the planning commission is that while they have to compete with the private sector for raw materials they have problems like over-staffing, political interference in day to day functioning, gross mis-management, and poor marketing strategies, which together with the conflict results in poor economic performance. The state government recently closed two PSUs, J&K Himalayan Wool Combers, and its subsidiary J&K Handloom, Handicrafts, Raw Material Suppliers Organisation, after declaring them ‘sick’. Employees in the other PSUs are fighting a losing battle. Most of the PSUs are unionised and staged a massive strike in 2001 against non-payment of wages and other allowances. It seems the government is all set to sell these enterprises as various investigative committees have repeatedly pointed to the losses PSUs make and suggest (seemingly in a short-term knee-jerk approach) selling them to finance the impoverished state. The state is planning to offer voluntary retirement schemes to the PSU employees to facilitate closure.

Handloom and Handicrafts

Bashir Ahmed spreads his Papier-Mâché products (beautifully designed pen stands, trays, ducks, and wall hangings) on the street in Srinagar. He sells them much more cheaply than handicrafts shops. “Life has been very tough,” says Bashir, “No tourists mean no business. I am a small village craftsman; I have no access to markets outside Kashmir. Middlemen take my works and pay me a pittance. I am sure they sell them at much higher prices. They get the biggest profits and artisans like me who sweat night and day get almost nothing; our payments are delayed for months by these greedy middlemen who live in big houses, drive cars, and whose children go to good schools while we and our families suffer. I saw lots of tourists in Srinagar this year, so I decided to sell my goods directly.”

The handloom and handicraft industry is the state’s oldest cottage industry. All three state regions have unique specialities in this sector. Jammu is famous for Basholi painting, calico painting, and phoolkari; Kashmir specialises in carpets, shawls, wood carving, Papier-Mâché, and crewel; and Laddakh is famous for wood carving and painting, clay moulding, pashmina weaving, and thanka painting. The handicraft sector registered a growth of 126 percent from 28 million rupees in 1998 to 63.3 million rupees in 2000. This sector provides income for over 400,000 people in the state. However, the sector’s growth does not mean returns for the actual artisans who earn very little
Industrial Relations and Workers’ Struggle

The near absence of enterprises does not mean that workers are not fighting for their rights. J&K has a long history of workers’ struggle. The first recorded strike was in 1924 6 when 5,000 workers at the state-run silk mill demanded a pay rise. Workers on the picket line were badly beaten, and the ring leader was arrested and killed in police custody; the strike was ruthlessly broken.

Unions are mainly in government departments and PSUs. Due to the current conflict, industrial relations have also changed in the private sector. The threat of moving out has gained special provisions for private industry; unions are not tolerated at all and any efforts at organising lead to dismissals. In December 2003, Moral Overseas, a garment company with 1200 workers in Bari Brahmina, Jammu, owned by the Bhilwara group, sacked 65 temporary workers giving business slump as the reason. However, reports say they were sacked trying to form a union. The sacked workers attacked the company office resulting in temporary closure. Company management stated that this type of attack will not go well with the business community. Management further claimed that the company was operating for the benefit of local people, ignoring the profits they made, as if sacking 65 workers was their right.

Labour Migration Issues

Riyaz Ahmed from Pulwama, Kashmir, is a manual labourer at the bus stand in Dharamshala. He has worked there for 18 years loading and unloading buses and trucks. Every morning, rope on shoulder, he searches for work; he lifts almost everything even delivering refrigerators on his back. Riyaz says, “I come from a poor village [in J&K] where there is hardly any employment. I came here for work and have been lifting heavy loads for 18 years. Things are not the same any more, especially after the conflict started. Everyone looks at us with suspicion, as if we are all terrorists. The police here keep on harassing us wanting to verify our identities.”

The migration of workers from Kashmir to work as manual labourers outside the valley is very old. In undivided India, they went off to work in Lahore (Pakistan) as porters. Nowadays they work in the bus stands of many Himachal Pradesh cities. Kashmiri vendors and craftsmen also migrate seasonally to sell products like shawls, crafts, or saffron.

State statistics say almost nothing about the hundreds of thousands of immigrant workers who come from impoverished states like Bihar, West Bengal, and Chhattisgarh to work in construction, brick kilns, or on farms in almost all the divisions of Jammu, Kashmir and Laddakh. More than 100 of these migrants have been killed in J&K, most coldly gunned down by the terrorists. Not much hue and cry was raised on their deaths, after all they are just poor labourers. Some of the labourers killed from Bihar were not even identified as there is no registration system for voluntary migrants in Bihar or J&K. Yet they keep coming to work here. In Kashmir and Laddakh divisions they work only in summer but in Jammu division they work all year round.

“I have been coming to Srinagar since 1990, I work as a skilled construction worker,” says Chandan who hails from West Bengal, sitting in Krishna Dhaba (hotel) Srinagar, “Lots of people were running out of the valley and many people were surprised that I was going there to work. Life was very hard here in the beginning with a curfew at night. Yet it is a question of livelihood. I may be able to evade bullets here but back home me and my family cannot evade hunger. I may survive here but back home it is certain death for us, and I make much better money than in Bengal, about Rs 300-350 a day.”

According to Chandan, there are about 150-200,000 migrants working every year in the Kashmir valley alone. Most construction workers here seem to be migrants.


Kashmir is often termed a nuclear flashpoint, with both India and Pakistan ready to unleash their deadly arsenal over the dispute. The conflict has fuelled a mad arms race between India and Pakistan and both of them, to the delight of arms traders, spend a large portion of GDP on defence, when a majority of both population lives in utter poverty. Ironically, UK prime minister Tony Blair persuaded India not to go to war with Pakistan in 2002 as it would hamper the US and UK led ‘war on terror’, Pakistan being a major ally, yet at the same time he pushed a £1 billion arms deal with India. A political settlement between India and Pakistan on Kashmir would not favour the multi-billion dollar arms industry.

Workers in the state are undergoing tough times. Public sector workers are easy scapegoats for the dysfunctional state and governance. The Godbole commission has recommended closure of most of the PSUs in the state, like the recommendation from the planning commission. However, just selling the PSUs will not solve long-standing issues. It may give short term money to the cash strapped government but will be catastrophic in the long run. Instead the state needs to focus on employment generation schemes that have almost frozen since the start of violence and creation of better infrastructure (roads, power, and communications) so that industries want to invest here. Lots of funds have been allocated for developmental activities e.g. 61.650 billion Rs by then Prime Minister Atal Biharai Vajpayee in May 2002. However, the real question is will that money ever reach the needy or even fund any realistic job creation programmes or be merely just eyewash to fill annual statistical books. A lasting peace, apart from the political aspirations of people, can be achieved only by providing clean and democratic governance where all people including workers participate and have rights.

Abdul Majeed thrusts the heart-shaped oar into the green waters of Dal. The sun is setting; the sky is red. Abdul rows his shikara hoping that next day will bring more tourists. All the actions of the governments of India and Pakistan will directly affect his next day. A delayed settlement between India and Pakistan coupled with unemployed, underemployed, and frustrated youth will definitely affect his next day.


1 On 12 June 2004, while this report was being filed, a grenade attack in a hotel in Pehalgam, Kashmir resulted in deaths of five tourists including two children aged eight and nine, injuring more than 18

2 There was no census in the state in 1991

3 Digest of Statistics – 2000-2001, Government of J&K.

4 US$1 = 45 Indian Rupees

5 ‘ Hawala’ is an illegal economy that operates clandestinely; money transfers take place outside the banks to evade national financial institutions

6 Tariq Ali, Clash of Fundamentalisms; Story of Kashmir; Rupa Publications


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