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21.43% from 1991 to 2001. 32 Not only are the corresponding rates higher for Jammu and Kashmir, but while
the decadal rate of growth increased in Jammu and Kashmir, it decreased for the rest of the country. These
high growth rates are accompanied by a similar growth in the workforce – during the same time period the
total number of workers in the state rose by 39%. 33 These workers have not been absorbed by the agriculture-
and handicraft-dominated economy of the state; they are left to join the ranks of the jobless. Furthermore, the
numbers of educated unemployed is growing, a result of the free higher education provided to residents of
the state and the lack of industry. 34 The government, which used to employ such workers, has cut back on
new additions due to the current budget problems. This has led to a deepening employment crisis. The
situation is dangerous as well – many unemployed young men are drawn to terrorist groups, who offer the
best opportunity to make money. 35
The state government must deal with its fiscal issues before it can help the rest of the economy. Fiscal
deficits must be reduced, aid from the central government must be effectively utilized, and state enterprises,
such as those in the power sector, must be reformed. Only then can other pressing issues, such as healthcare
and unemployment, be addressed.
Agriculture
With the downfall of tourism and the lack of organized industry, agriculture has been the backbone of
the state economy. Agriculture and related activities employ around 80% of the population and account for
60% of the state income. 36,37 Four-fifths of the state’s population resides in rural areas, a much larger
proportion than the rest of the country. 38 This sector of the economy, which carries the state, has been barely
affected by the rise of militancy in the 1990s. The total area under cultivation has almost remained the same,
32 Government of India 117.
33 Government of India 110.
34 Government of India 120.
35 Hababullah, Wajahat.
36 Government of India 43.
37 “States and Territories of India: Jammu and Kashmir” 247.
38 “Jammu & Kashmir: A Profile.” The Official Website of Jammu and Kashmir Government, India. 16 December 2004. Jammu
and Kashmir Government, India. 20 December 2004 jammukashmir.nic.in/profile/facts.htm.