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Second wave of COVID19: Kashmir businesses feel the heat

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SYED JESARAT

Srinagar, May 27: While the COVID19 pandemic created havoc across the world, affecting the economy and businesses throughout the globe, India – one of the worst-hit countries by the coronavirus – has to face an economic recession after decades as the GDP for 2020-21 is expected to contract by more than 7 percent. However, the businesses in Jammu and Kashmir have to face a double whammy. First, it was the August 5, 2019 clampdown and internet ban, and as people here were struggling to come out of its impact, a countrywide lockdown was announced to curb the deadly virus. This year also as the second wave of COVID19, which proved worse than the first one, hit the country, restrictions were again put in place for the movement of people as well as the opening of markets, educational institutions and public places hitting hard the already beleaguered business. To know the impact of these back to back lockdowns on the Kashmir economy, Business Kashmir spoke to some businessmen and industrialists about their assessment of the situation.

Kaisar Ahmad Khan

Al-Furqaan Enterprises

Trade & Distribution sector

My company is going through a financial crunch. We provide stock to our retailers but most of the payments remain withheld. We have about 10 employees working with us, who are dependent on the firm. We have to pay salaries to our employees as well as rent of godowns, which makes it even more difficult to cope with the loss.

The trade sector is hugely impacted by the COVID19 pandemic and prior lockdowns as well. Due to prolonged lockdowns, consumer buying power has gone down. Even those people who have money are only buying essentials and deferring bigger purchasing decisions as the situation is unpredictable.

The government needs to take some concrete steps to facilitate the business sector. Refinancing of loans and interest subvention is of no help to businesses like ours. The situation is like that we have to start it all from scratch now because Kashmir has witnessed three lockdowns consecutively. Government should come up with a good package that will deal with business as well as present the COVID19 situation simultaneously.

Dawar Mir

MA Mir and Co.

Govt Contractor

COVID19 pandemic has resulted in halting major construction activities. While the construction material prices have shot up by more than 35%. Be it gravel, sand, cement or steel, all items are now costlier as compared to the rates before August 5, 2019. But the government rates are locked until the completion of a project and as the work gets delayed due to lockdowns, it takes away the profitability.

I believe, the industrial sector is witnessing a 90% loss, since the business is not going well we still have to pay the workers which drain the capital. Though during the present phase of lockdown, passes have been allotted to the industry people. But these passes are not many times entertained by the lockdown enforcing people on the ground.

Though the government has a lot of policies on paper regarding industry and business, all they need to do is implement those policies, which is not happening. Development funds are delayed, and payments are pending for the last 3 years. If the government implements the policies there might be some respite from the misery of losses.

Ibrahim Beigh

5G Mobile Services

Cell Phone sale& Service 

COVID19 pandemic has affected the daily work of our firm badly. Mine is a product-based as well as a service-based business. Due to COVID curfew and lockdown, the official store at Khanyar is closed. The business is run through online mode now and delivered to customers through logistics service providers which have impacted the sales as the footfall has reduced to a significant amount in our retail store. The online platforms cannot compensate for that. Economic scenario has deprived to a large extent and spending power of people is very low compared to what it is in normal conditions.

There is no display of mercantile in the retail store, owing to present circumstances, all sales are generated online right now. We are offering free delivery within adjoining areas and paid delivery in farther areas.

The business is witnessing a 50-60% dip in sales on average because of the current lockdown.  The store has 5-6 employees, all working on a commission basis presently, no salary structure is being applied for now.

Kashmir’s economy has been disturbed since 2014 itself, due to natural as well as political conditions, keeping in view all these factors and knowing this is the third consecutive lockdown, the administration should strike a balance between pandemic as well as business and ease restrictions for businesspeople to some extent.

Certain leniency should be provided to businesses, as holistic lockdown will halt the economy completely. The opening of markets should happen in a phased manner under a particular controlled mechanism.  Society has hand-to-mouth segments of people as well who are solely dependent upon the small businesses they own, keeping that in view the stringent standards of lockdown should ease to some extent.  Also, the administration needs to facilitate the smooth movement of delivery persons, as it’s not easy for them to move freely during such stringent lockdown.

Sheikh Samiullah

FastBeetle

Logistics & Courier Services

FastBeetle has witnessed good growth during the ongoing lockdown. People want all the essential to get delivered to them at their doorsteps, which boosted the logistics business. This sector of business has seen a significant amount of profit.

The mobile application makes it very easy for people to place an order. The company has employed 35 people till now and is doing very well.

Kashmir has witnessed several lockdowns which have resulted in less economic growth. There are other sectors of business that have got severely affected due to the lockdown. Government officials should come up with some relief packages for business sectors so that the ongoing losses can be compensated.

The movement of delivery persons during the COVID curfew is a matter of concern. Their movement is usually restricted, and they are even beaten most sometimes, but somehow they manage to deliver the orders by following Covid- SOPs.’

Kashmir businesses feel the heat

Daniyal Qureshi

Greenway Enterprise

Packaging Industry

The current lockdown has resulted in a decline in production at our factory.

Initially, the movement was not allowed from home to factories, then the administration ordered movement passes to people in estates but on grounds, the situation was quite opposite. Since the markets were closed, the buyers were not ready to accept the products which affected the product generation. Even though the factory was closed, the payment to labourers and utilities needs to be paid. The production made is zero but banks are continuously charging the interests from the firms.

Since there is no sale, we are not able to generate any money, what will we pay to a bank? Because of this, our EMIs are continuously piling up.

Currently, Greenway Enterprise has seen a 30% dip in production generation. The national lockdown has resulted in an escalation in prices of raw materials as well. Presently, losses are being assessed, and it can be said that the current state of Kashmir’s economy is not viable.

Government should come up with effective policies to compensate for the losses.

With proper implementation of COVID19 SOPs, markets should be at least opened alternatively.

Government should consider a proper plan of 5 years for rehabilitation, revival and restructuring of the business sector. The economy is under crunch and 40% – 50%  capital infusion will not help in reviving the market.

Asif Hussain

Fair Fax Holidays

Tour & Travel

Tourism sector is one of the worst-hit sectors in Kashmir. Except for a brief period of 2-3 months, tourism activities have remained suspended in Kashmir since August 2019.

The employees working with us are very badly impacted. To sustain we provide them with a salary but at the same time, everyone wants to see growth in their job, which unfortunately can’t be achieved in Kashmir.

The tourism sector saw a boom for the winter month for a while, at a winter sports event in Gulmarg and in April, at tulip festival opening. So, keeping that in view many investments were made beforehand but due to the sudden rise in Covid cases and imposing of lockdown, all the investments are in a loss. The graph of tourism has seen improvement only for two times since three consecutive lockdowns it’s in decline mode.

Forget about gaining, even to sustain markets are not open.

Hotels, restaurants are all shut since lockdown and the earning is zero in the tourism sector.

The expectations of the tourism sector now lie with the Amarnath Yatra, which is supposed to get functional in July.

The objectivity is lacking in Kashmir’s trade and commerce sector. The state has no backup plan, even after witnessing many unstable conditions. The government is not taking any solid steps to help the people who went through huge losses.

The administration should frame policies that can be implemented on grounds keeping in view the Covid-19 SOPs.  It seems that we have to live with COVID, for now, so the strategies to sustain the economy should be made very effectively. Government should start home-based projects for youth who are unemployed and can’t find work due to the pandemic.

Firdaus Bhat

Manchester Education Consultancy Services

Service Sector

COVID19 has badly impacted us, as almost every country is dealing with it right now. Travel and movement in many parts of the world are either banned or restricted. Earlier, it would be lockdown in Kashmir and students would like to go outside for the studies but this time situation is the same everywhere. So the kind of service we provide, overseas education, is completely down and my venture is running in losses. I have to pay the salary to my employees regularly.

Not only the educational consultancies but overall the education sector is in losses. But despite that, I’ll argue that lockdown should continue until it is required to rein in this deadly virus. Health should be a priority for everyone.

 

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business

Women shaping informal sector in Kashmir

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Women shaping informal sector

Dhaar Mehak M

 The informal sector is defined as the unregistered part of an economy. In a traditional economy, it is assumed that every business entity is formally registered with the government. A proper registration of a business unit is associated with a number of economic, political and social factors. All the registered units to begin with are enumerated in the industrial census. It keeps the government and policy makers informed about the number and nature of the units. The economic and industrial policies are made and shaped in light of these numbers. Social welfare is decided based on the outcomes coming from these registered units. And the long run industrial and economic planning is carried systematically based on information and evidence from the ground.

Quite contrary to this established smooth channel of economic growth and transition, the developing and under-developed parts of the world have been reflecting self-curated unique trends. First of all, the formal sector has not been able to expand as expected. This has led to limited employment opportunities coming from this sector to the ever-increasing populations and youth bulges. As an instinct to survive, people are forced to find some or other kind of employment. This has led to the creation of and the growth of the informal sector across these pockets of the world. The case of India is one of the fundamental ones. The Indian economy is characterized as having one of the most unique and large informal sectors across the world. 80% to 85% Indian population is estimated to be employed directly and indirectly in the informal sector.

Empirics show that Jammu and Kashmir has reflected growth in the informal sector over time. On the eve of the creation of the welfare state in the region headed by Sheikh M Abdullah, a socialistic model of development was brought into practice. It was called, ‘The Naya Kashmir Manifesto’. Among other things, one of the main agendas of the manifesto was to set in place a public sector-led industrialization process in J&K. As such, all the industries established under the Naya Kashmir Manifesto are a-priori classified as the formal sector firms. The political instability and fragility in the region kept on increasing and the focus of the government as predicted by theory and validated by practice shifted to peace restoration activities. This gave a back-lash to the public sector lead industrialization process in the region.

Steadily people began to look for alternative means of livelihood and subsistence. This set in place the informal sector across all the pockets of the region. The instability during the decades of 1990s, followed by various political and natural shocks during the 2000s made people realize that each person must be skilful and must practice the same in order to keep on bringing in sustenance money. The Kashmir division is particularly known to be diversified in various types of craft. From Ari work, through Tilla designing, people have bene utilising their skills to cash in some money. The wood-carving, Pashmina making and many distinct skills indigenous to Kashmir have been practiced in the informal sector by both men and women over time.

Of late there has been an Information Technology boom. The 2000 AD has seen a drastic revolutionising of the world through the spread of the World Wide Web. Mobile phone penetration has made the world an accessible global village. The social media applications of Facebook, Instagram and WhatsApp have empowered people in a number of ways. People started off with sharing their pictures and highlighting their skills online on social media platforms. On receiving appreciation their confidence rose and soon people started to ask if some of their skills could be shared or used.

These platforms have greatly affected the economic well-being of the women located across various regions of Kashmir. Initially, women from different ages and social backgrounds strolled these platforms. Some of them enhanced their existing skills or learnt new ones online. This was followed by trying a hand at the commercialisation of the same, which in many cases has yielded a positive response. There are a number of examples that can be quoted as brief case studies in the present article.

The Instagram page by the handle of @makeupshakeupbynidanazir evolved over time. Nida has always been fond of make-up and lipsticks. As a child she always bought makeup and accessories from her pocket money. Applied the same on her dolls, herself, her cousins and her mother and grandmother occasionally. Over time she mastered the skill. From turning pages of magazines to learning online through YouTube etc. her skills enhanced steadily. It was her friend’s engagement and Nida offered to do her make-up. The outcomes were really appreciable. The friends decided to open up on online platform to display her make-up skills. The bookings soon followed and today Nida is a known name in the local make-up industry.

Saba married a doctor who lived in Saudi Arabia. Soon after her marriage, she moved to KSA with her husband. She always liked chocolates and began exploring the chocolates of KSA. Later in 2016, she shifted back to Kashmir with her kids. The kids and herself started missing the unique chocolates of KSA. One day Saba decided to curate her own. The chocolates turned out to be good. She shared the same with her sister and cousins. She was influenced to upload the same on Instagram. Steadily, the popularity of her chocolates grew and orders started to flow in. Today Saba is an established name in the curated and customized local chocolate industry.

There are innumerable other success stories which will be discussed steadily. But the underlying point of the present article is that the informal sector in Kashmir has been growing ever since the formal industrial set-up took a back-set during 1950s. Initially it was hidden and the returns were menial or limited. However, with the growth of the internet boom the women in the region have been able to harness the benefits and the informal sector has been growing steadily and sustainably. In Kashmir, this sector can be directly related to women’s empowerment and is expected to increase steadily over time.

 

The author teaches at the Department of Economics, Islamic University of Science and Technology, J&K and can be reached at [email protected]

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Economy

Rural mart inaugurated under NABARD scheme

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Rural mart inaugurated under NABARD

BK NEWS

Shopian, Sept 20: National Bank for Agriculture & Rural Development (NABARD) has collaborated with National Rural Livelihood Mission (NRLM) for extending the grant support to SHGs promoted by NRLM for setting up rural marts. These marts aim to promote and provide a platform for women’s self-help groups to market their handmade products.

The rural mart was inaugurated on 20 Sept 2022, at Shopian

Dr AK Sood, CGM NABARD J&K, SSP Shopian Tanushree, NRLM Reyaz Ahmad, and ADDC Shopian, Manzoor Hussain were present for the inauguration ceremony.

The mart will give numerous SHGs an opportunity to sell their homemade goods, including apparel, handloom and handicraft products, homemade food items, dry fruits, and more.
For a period of three years, NABARD has agreed to commit Rs 4.79 lakh as financial support for each rural market. NABARD will pay for the components, such as shop rent, salesman salaries, marketing costs, and other miscellaneous expenses.

Dr Sood, CGM NABARD, urged the female SHG members to use the mart as an opportunity for economic growth and to guarantee the continuity, quality, and quantity of local goods for both locals and tourists.
Additional Mission Director NRLM commended SHGs for taking such a unique initiative in the district.

“Rural mart to be run by female SHGs is the first step towards women empowerment in the district,” said Tanushree, SSP Shopian

Members of various SHGs from the district attended the event. Deputy General Manager NABARD Surinder Singh, District Development Manager NABARD Rouf Zargar, DPMs NRLM Uzma Mehraj and Irfan were also present on the occasion.

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Economy

Wood shortage, high prices due to Russia-Ukraine war affect timber business in Kashmir

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Wood Shortage high prices

Malik Nisar

Srinagar: Every summer Altaf Ahmad 35, a small timber trader from north Kashmir Baramulla district used to be busy with his timber business, but this year instead of attending to customers at his unit, Altaf spends his day playing cricket in his village outskirts. The war in far-off lands has affected his business badly.

The prices of KD Wood mostly imported from Russia and Ukraine have soared many times, while the supply had dwindled.

“The Russia-Ukraine war has badly hit our timber business in Kashmir. This is the construction season here, we were expecting our business will double as there was lockdown from the past two seasons because of Covid19, but due to the war we are on the verge of complete breakdown this season too,” said Altaf Ahmad.

Altaf believes that their business is at a halt not only because of less supply of timber but also due to the less demand due to price rises as customers are reluctant to purchase at higher rates.

“There is the increase of 20% to 50% in the rates that has abruptly brought down the demand because customers are unable to purchase on such higher rates. We used to earn a good profit, but are presently on destruction mode where survival seems very much difficult,” said Altaf

Russia is one of the highest timber suppliers in the world and ranks as the seventh biggest exporter of forest products worldwide, which accounts for 22% of the global trade. And it clearly shows that the global market will continuously impact as long the Russia-Ukraine war continues. A country like China, which is in support of Russia in the conflict, has also been affected by limited trade sanctions as it depends on the import of timber, logs, and wood chips even for their domestic use.

Halted construction work

For Sajad, who was planning to complete the pending works of his newly built house and get married next year, the Russia- Ukraine conflict has brought a tsunami of hopelessness because the sudden surge in the timber rates has halted his plans of construction work and marriage back home, he feels it is unbearable to bear all the expenses in such a tough situation where other commodities all already in the surge.

Wood Shortage high prices

“The sudden increase in timber rates halted all my construction works because, I was expected to purchase timber say for example for Rs 1 lakh, now it will cost me Rs 1.5 lakhs an increase of fifty thousand. Now, I am too confused about whether to do it or not,” said Sajad Ahmad from the Bemina area of Srinagar.

 Showkat Ahmad another timber trader from North Kashmir says Ukraine timber was mostly used in Kashmir for the past couple of years as compared to Russian and German timber because Ukraine timber was available at cheaper rates. With a war going on in Ukraine the demand for German and Russia will arise, but it’s going very much costlier for customers.

“People prefer Ukraine timber because it’s easily affordable for them in contrast with German and Russian timber due to its low cost. The war in Ukraine has put everyone both (buyer and seller) in a catch22 situation because one doesn’t know what’s going to happen next,” says Showkat Ahmad who deals with the timber business for the past decade.

Business Kashmir visited various units in central and north Kashmir among them was Changa Timber Gallery, Sopore.

“I am into this business for the last one year but, I think this kind of situation will only benefit those dealers who have piles of stock available in the stores because they can increase rates on that stock which they have purchased at low rates earlier and a trader like me will go more into loss due to these unprecedented rates who’s new into this business and has very much less stock available at times,” says Aijaz Ahmad Changa, a 30-year-old BCom graduate.

Kashmiri Timber Traders mostly purchase timber from Gujarat and in Gujarat, they directly import the timber from Russia, Ukraine, and Germany. Business Kashmir contacted Singla Timbers Private Limited one of the oldest timber factories in Mithirhar, Gandhidham Gujarat who are in this business since 1946.

“The whole world is witnessing inflation it will remain for some time maybe for another year and there is also less supply of timber from the last few months because of that we are witnessing an increase in the rates of timber,” says Pulkit Singla director Singla Timbers.

“Kashmiri traders prefer Ukraine timber because of low price, but at the same time Ukraine timber also differs in quality in comparison to others.”

He says the lack of local wood production forces people to buy imported wood.

“India only imports 2% of the world produced timber. The local timber in India is not of that quality and one has gone through a long process before getting its access. The forests are like agricultural fields for countries like Russia and Ukraine, they cut the trees and do the plantation of it again and again but, in India, that thing is lacking. It’s also because of the weather,” he said.

Altaf and other timber traders in Kashmir are now waiting and praying for the end of the war in Ukraine so that their business will see that charm again.

“I only want the war in Ukraine to end, so that our miseries will also end,” concluded Altaf.

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