Srinagar: Kashmir’s economy is witnessing a peculiar paradox — while families and individuals own significant assets in the form of land, orchards and large houses, many continue to struggle with cash flow and consistent income streams.
Business leaders describe the current scenario as being “asset rich, cash poor,” with liquidity challenges becoming more visible across sectors.
“People have locked their money in land, orchards and big houses. Real estate, in particular, has emerged as the biggest casualty with fewer buyers in the market. Those who invested heavily in property are now unable to liquidate their assets,” a Srinagar-based businessman told Ziraat Times.
The slowdown has also impacted overall market demand. Traders say that consumer spending remains subdued, hitting sectors ranging from retail to services. “Cash is moving with low velocity now. Markets are dull and many business establishments are struggling to keep up with running costs,” another business owner said.
This year’s hit on tourism sector following the Pahalgam tragedy, followed by the recent meatgate scandal, have added to the cash crunch crisis.
“The beauty of the tourism and allied sectoes is that goof economic activity there generates several cascade economic activities. Money flows from one sector to another. That is not the case with the agriculture sector, which is largely a subsistence activity”, says Irfan Muneeb, a young businessman who had invested in taking a guest house on lease but is taking major losses.
Economist and former Finance Minister Haseeb Drabu, writing recently in Greater Kashmir, highlighted structural challenges of the regional economy, warning of deeper issues linked to liquidity, consumption and investment.
The construction industry — a major driver of Kashmir’s economy — is also facing a slump. Cement companies report that demand has dropped sharply, with industry insiders attributing it to the slowdown in private construction activity and the inability of local companies to secure large government contracts. This decline has had a cascading effect on allied sectors, including steel, timber and transport.
Observers note that while Kashmir’s households and businesses have historically parked wealth in tangible assets like land and housing, the absence of sufficient income-generating investments is now causing financial stress. Analysts warn that unless structural reforms encourage diversification into productive ventures, this “asset rich, cash poor” syndrome could stifle both growth and employment in the region.
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