In September 2024, Prime Minister Narendra Modi addressed an election rally in Jammu city, five years after the party he leads at the centre hacked away Jammu and Kashmir’s special constitutional status and ended its statehood.

“The Jammu region in particular faced decades of injustice at the hands of the three parties,” said the Prime Minister, referring to the alleged regional discrimination encouraged by political parties such as the Congress, the National Conference, and the People’s Democratic Party. He assured the crowd, “In coming times, Jammu’s development will be further boosted.”

While the audience seemed enthusiastic, Vijay Singh Chib, President of the All Jammu & Kashmir Transport Welfare Association, reacted cautiously. For him, Modi’s speech was no panacea for his troubles. Chib’s frustration stems from the unfulfilled promises made by the BJP when it reels off its rationale behind the abrogation of Article 370, which include a “terror-free Jammu and Kashmir and increased job opportunities.”

Chib had hoped, above all, that the party would address long-standing regional disparities. Instead, in the five years of administrative changes that have followed after the introduction of the Jammu and Kashmir Reorganisation Act, 2019, Chib has become a worried man struggling to reconcile himself to Jammu’s changing economic landscape.

“After 2019, the government invested heavily in development projects for Kashmir,” said Chib. “But what has Jammu gained? Forget about progress, BJP and Lieutenant Governor (LG) administration have even taken away our existing resources. Are we just experiments for their policies?”

Despite the BJP’s best-ever performance in the Jammu and Kashmir Assembly election, winning 29 seats entirely from the Jammu division, there has been a manifold increase in the resentment against the saffron party and the LG’s administration in Jammu, a region that had welcomed the Central government’s unilateral decision to scrap Article 370.

The first nail

In 2021, the Chamber of Commerce and Industry (CCI), Jammu, called for a region-wide shutdown to protest against LG Manoj Sinha’s administration, accusing it of being “anti-Jammu” and “snatching away opportunities instead of creating them.” Among several grievances, the chamber underlined the abolition of the 153-year-old Dogra tradition of the annual Darbar Move: Every winter, continuing the Dogra King Ranbir Singh’s tradition (who introduced the Darbar Move in 1872), the Jammu and Kashmir government would shift its operations from the summer capital of Srinagar to the winter capital of Jammu. “It was an important tradition that kept the bond between Kashmir and Jammu alive and helped in cultural exchange,” said Sanjay Gupta, president of the Businessmen Association of Raghunath Bazaar, a famed market in Jammu. “For businesses in Jammu, these few months were critical because of the influx of Kashmiri people. More than profits, it strengthened our brotherhood.”

Even before militancy broke out in the Valley, both Jammu and Kashmir have had their share of political differences. Regional governments, even while working for the interests of the two regions on equal lines, never really worked out the differences. But the business leaders believe that the Darbar Move created economic interdependence that helped bind the two religiously diverse regions.

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In the summer of 2021, the LG abolished the century-old practice, claiming it would save the exchequer Rs.200 crore annually. Jammu’s businesses have been left ruing their losses. “In Jammu, where tourism opportunities are limited, the Darbar Move was a lifeline for many businesses,” said Gupta. “Since it ended, it is now just about losses. We’ve even had to cut our workforce by half.”

The absence of the Darbar Move has hit the hospitality sector particularly hard. Around 10,000 employees and their families would typically move to Jammu during the winter months and stay there till the onset of summer, providing a steady customer base for hotels. “Our core customers were Kashmiris,” said Pawan Gupta, president of the All Jammu Hotels and Lodges Association, which represents 250 hotels in the region. “Since the Darbar Move was abolished, hotel occupancy has plummeted from 90 per cent to barely 30 per cent. Jammu’s hotel industry is on a ventilator and over 1 lakh people associated with it are struggling.”

CCI’s Jammu president Arun Gupta estimates that the decision has cost businesses in the Jammu region thousands of crores in losses. “Ending the Darbar Move may have saved [the government] Rs.200 crore, but it has cost Jammu much more. Every single business here has suffered.”

This, however, is not the first time that the Darbar Move has faced opposition. In 1987, then Chief Minister Farooq Abdullah attempted to abolish it, but his plan boomeranged when he faced strong protests in Jammu, forcing him to abandon the plan. The current LG administration proceeded with the change despite protests. “Earlier governments at least heard to our grievances,” says Arun Gupta. “Under the LG administration, local stakeholders have no voice. This parachute policymaking has proved disastrous for Jammu.”

‘How do we survive?’

After Jammu and Kashmir was reorganised into a Union Territory, one of the immediate changes introduced by the Delhi-controlled administration was the abolition of the two-decade-old Lakhanpur Excise Toll Post in Jammu. Some prominent business associations in Jammu also celebrated the move, believing it would save them from taxes.

Previously operated by the Jammu and Kashmir State government, the Lakhanpur toll post mandated by law that all vehicles entering or leaving the region pay a toll on imported or exported goods. This served as an important source of revenue generation for the State. According to the Jammu and Kashmir Excise Department, the toll generated some Rs.92 crore in revenue in 1999-2000, a figure that surged to Rs.644 crore by 2018: a 600 per cent increase.

However, the toll’s removal has upset industrialists in Jammu. “The Lakhanpur toll post created a level playing field for our small-scale industries by imposing VATon goods imported from outside Jammu and Kashmir,” explained Viraj Malhotra, a Jammu-based industrialist. “This made locally produced materials cheaper and competitive. But after Article 370 was revoked and the cap lifted, industries from outside the Union Territory can sell their products at lower prices in Jammu than local units can. We’ve lost our market and cannot compete. How do we survive?”

Jammu’s industrial sector primarily consists of micro and small-scale units, making up 95 per cent of the total units, which include textiles, steel rolling mills, furnaces, packing units, plastic units, pharmaceuticals, pesticides, and flour mills. Lalit Mahajan, president of the Bari Brahmana Industrial Association (BBIA), believes that mechanisms put in place by the central government after the region’s special status was revoked have pushed these industries to the verge of closure.

“After 370 ended, the government introduced a GeM [Government e-Marketplace] portal that competes on the national level,” Mahajan told Frontline. “Not a single Jammu-based unit can compete with outside industries due to the stringent eligibility criteria. There’s no level playing field.”

Mahajan, who represents about 400 industrial units, said that before Jammu and Kahmir became a Union Territory, industrial units received around Rs.1,800 crore annually in economic relief from the government. “This included Rs.600 crore as VAT refunds, Rs.200 crore in toll benefits, Rs.200 crore for inter-State sales, and Rs.800 crore in central excise reimbursements. Now, these incentives have been diluted and the government only provides Rs.500 crore in reimbursements.”

He added, “Previous governments offered transport subsidies, with 90 per cent freight reimbursement, but that was withdrawn in 2021. The first blow came with the introduction of GST and the final one came when the State became a UT. The LG administration only highlights savings for the exchequer but ignores the cost borne by industries.” Jammu’s industries directly and indirectly support around 3 lakh people. “We could have helped to address unemployment to some extent, but the government has failed to support us,” Mahajan pointed out.

The economic crisis and the anger against BJP is not limited to industries. Take the example of Chib, a transporter with over 30 years in the business. Chib says he has never seen his sector burdened with such high taxation and uncertainty until the former State’s status was changed.

“The taxes on the transport industry have broken our back,” Chib told Frontline. “Just two years ago, a road permit for commercial buses cost Rs.20,000. Now, it is Rs.3 lakh. Not just that, the quarterly taxes for buses have doubled from Rs.4,400 to Rs.8,800. The LG government keeps increasing taxes but gives no relief.”

Echoing similar views, another transporter at Jammu’s famous BC Road, from where over 80 buses travel every day to Delhi, Chandigarh, Amritsar, Kashmir and Jaipur, said that a bus that costs around Rs.60 lakhs now incurs a tax of about Rs.5 lakh. “An all-India permit applied for in Jammu and Kashmir costs Rs.3.6 lakh per vehicle,” he said, requesting anonymity. “No other UT is liable for toll taxes; so why is is it applicable here?”

That is perhaps why transporters like 66-year-old Ravi Baru have chosen to register their vehicles in other States such as Bihar, where taxes are lower. “It’s cheaper to register a vehicle in Bihar than in J&K,” said Baru, who has been in the transport business for over 30 years. “Taxes here have tripled since Governor’s rule began.” Economic pressures have forced Baru to reduce his fleet. “I had 30-35 buses running across India. Now, I operate only 8-10 buses. It is much better to keep my money in the bank and earn interest. Investing in the transport business in Jammu has become futile. The LG administration has crippled it.”

Far from prosperous

Ever since the Centre assumed control over Jammu and Kashmir’s administrative setup through the LG, “development” has been at the heart of its agenda, framed as the solution to every issue. Modi has himself unveiled a series of ambitious projects, promising to take the region into “a new era of development.” Among these, the Udhampur-Srinagar-Baramulla Railway Link (USBRL) is one of the most significant.

At Rs.37,000 crore, the USBRL will connect the Kashmir Valley to the Jammu division and integrate it with India’s rail network for the first time. Slated for inauguration on January 26, the project will represent a logistical and political triumph, delivering on the government’s claim to better integrate the UT with the rest of the country.

At Rs.37,000 crore, the Udhampur-Srinagar-Baramulla Railway Link will connect the Kashmir Valley to the Jammu division and integrate it with India’s rail network for the first time.
| Photo Credit:
IMRAN NISSAR

During the inauguration of a separate railway division for Jammu last week, Modi said the USBRL project would “bring economic progress and prosperity.” However, for many in Jammu, the consequences appear far from prosperous. 

“Our clientele is 90 per cent from Kashmir,” Pawan Gupta, a hotelier, told Frontline. “Most of them travel by road from Kashmir and usually prefer to stay overnight in Jammu. However, once the train service starts, the same customer will bypass Jammu. Instead of spending extra money on a stopover destination like Jammu, they will prefer to reach their destination directly.”

Gupta cited the example of the railway connection to Katra in 2014, which drastically impacted Jammu’s economy. “When the Katra train began operations, our business dropped by nearly 90 per cent. Now, with the train extending to Kashmir, barely anyone will stop in Jammu.” The Jammu Chamber of Commerce and Industry also echoed the same concerns in a statement: “the rail going up to Srinagar will further effect the trade sector of Jammu,” it stated.

Sanjeev Sharma, a transporter who has been in the business for 35 years said that his business nosedived by 30 per cent when the Katra train service started. “Once it reaches Kashmir, it will destroy whatever remains of our transport sector,” he told Frontline.

Even Karan Singh Wazir, Chairman of the All Jammu & Kashmir Transport Welfare Association, said the upgraded railway connectivity could dismantle Jammu’s job ecosystem. “Around 50 per cent of people involved in Jammu’s transport industry will lose jobs once the train to Kashmir starts,” Wazir said. “Is this the kind of development the government promised Jammu after the abrogation of Article 370?”

Besides this, the National Highway Authority of India (NHAI) that will link Delhi to Katra via a 669-km-long expressway built at Rs.40,000 crore has also raised alarm bells that it will bypass Jammu city entirely. “Once both the projects [railway link & expressway] are completed, Jammu will be bypassed forever,” Pawan Gupta said. “If a city is ruined, it is the government’s concern to rehabilitate it.”

There is a growing perception in Jammu that the government’s developmental focus has shifted to Katra; but Katra’s population too is not happy. The discontent stems from a contentious proposed Rs.250 crore project. In November 2024, the Shri Mata Vaishno Devi Shrine Board (SMVDSB), headed by the LG, announced plans to install a ropeway to the shrine for pilgrims who find it difficult to make the journey.

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The Vaishno Devi Sangharsh Samiti, representing shopkeepers, palanquin owners, and pony operators, called protests and shutdowns, arguing that the ropeway would slash the livelihoods of 60,000 families who are dependent on pilgrimage-related services. Some protesters even staged hunger strikes. “This project undermines the faith of Hindus,” said Karan Singh, spokesperson for the Sangharsh Samiti. “The government is misleading people by claiming this project is for the disabled and elderly.”

To pacify them, the administration temporarily halted the ropeway project, saying “a committee would take a decision after considering religious sentiments and Katra’s economy.” The shutdown, spearheaded by the Samiti, finally subsided after a week.

Rise in violence

When militancy broke out in the Kashmir Valley, it could sustain itself for so long because of the ideological support it gained from the local populace. However, when militancy shifted to Jammu, it failed to attract any substantial support and was eventually crushed by the beginning of 2010. In 2024, however, experts and security apparatus have underlined the shift of the base of militancy and violence to the Jammu division, especially to areas declared militancy-free by the security machinery a decade ago.

There is an atmosphere of heightened panic in the region, as many recent attacks have occurred in areas that were largely spared even during the peak of the insurgency in Jammu and Kashmir. What has baffled security forces and the local population even more is that eight of Jammu’s 10 districts have experienced militancy after 2019. The most ferocious of these was an attack on a bus of pilgrims in Reasi district of Jammu on June 9, 2024, which left nine people dead, including an infant.

When militants shifted their base to the Pir Panjal range—the twin districts of Poonch and Rajouri—in 2021, 15 security personnel and two civilians were killed. The number of security force casualties dropped to seven in 2022, with three civilian deaths. In 2023, the situation worsened, with 20 security personnel and seven civilians killed.

“Our village had never seen militancy before that incident,” said Mast Ram, a resident of Kathua’s Sohal village, which was attacked by two Pakistani militants last year. “We had always lived in peace, but that’s no longer the case.”

Chief Minister Omar Abdullah has said the “perpetrators of violence will always face defeat in J&K,” attempting to allay Jammu’s fears for its economy, assuring that the region “benefits” from the Katra-Kashmir railway and promising the restoration of the Darbar Move. However, with limited powers in his cabinet, an elusive Statehood and the LG’s overarching powers, Jammu’s business community is deeply concerned that the elected government will not be able to do very much to assist them.

Zaid Bin Shabir is a journalist based in Srinagar.