Developmental Parallels Between Kashmir and PoK: Lines of Control, Shades of Contrast

Underneath the dust stirred by the crossfires between India and Pakistan in Jammu and Kashmir lies the untold story of developmental disparities between regions separated by misconceived boundaries of baseless claims.

Illustration by The Geostrata

Boundaries that, by their very nature, separate the two by a margin that is only negligible compared to that separating the economic, social and medical realities of Jammu and Kashmir and the part of it that remains under unlawful Pakistani occupation. 

What is paradoxical is that while PoK may superficially hold immense strategic potential for Pakistan, its continued occupation and administration of the region is not economically viable for a country in shambles, one that finances its economy almost entirely through debt and that relies on misguided grants of IMF loans for its very survival.

In the last financial year, Pakistan received a record high of $26.7 billion in loans, out of which a mere 13% was utilised for project financing.

In fact, the primary constituents of Pakistan’s financial reserves are refinanced loans and additional borrowings. A country that relies on new loans to service old ones remains in no financial position to fight a war, let alone the war in Kashmir, and the repercussions of it reverberate through the region louder than ever. 

THE TOPOGRAPHY

India holds two-thirds of Kashmir, a Kashmir that is defined by its pristine valleys boasting of immense fertility and picturesque mountainous silhouettes. Pakistan controls a third. This portion, particularly the Gilgit-Baltistan belt, stands at an altitude of 15000ft, rendering the area hugely unproductive with a dearth of industrialisation. To sustain it would require heavy subsidisation, which Pakistan simply cannot afford. 

ECONOMIC GROWTH

The Union Budget of India, for the year 2025-26, allocated ₹41,000Cr to Jammu and Kashmir as central assistance along with ₹13,522Cr as a part of centrally sponsored schemes and the Prime Minister’s Development Package.

Contrastingly, Pakistan slashed its budgetary allocations for PoK by 16%, from a previous estimation of ₹2,307Cr to ₹1938Cr. The Dawn even went as far as to note that “the region would be handicapped by lower allocations”. 

The restructuring of the Pakistani economy was on account of greater investments to be made for the water, power and highway sectors, with a majority of those projects being seated at the heart of Pakistan-China relations by virtue of their Chinese operation. 

Jammu and Kashmir’s GDP growth rate has also been projected as 9.5%, with a GDP of ₹2,88,422Cr, with the GDP expanding from ₹1,64,103Cr in 2019-20 to ₹2,45,022Cr in 2023-24. Pakistan-occupied Kashmir, on the other hand, has had no estimations to draw upon in the last three years. 

ECONOMIC STRUCTURE  

The Kashmiri economy is predominantly agrarian in nature, with 70% of the population of J&K directly or indirectly depending on the sector in terms of their income. It constitutes 49% of the total workforce, with a distribution of 42% and 7% being cultivators and labourers, respectively.

The sector plays an overbearing role in the Union Territory’s exports with products like saffron, honey and basmati. Jammu and Kashmir’s handicrafts require no embellishment or praise. The industry has been increasingly prioritised by the government owing to its large employment base and ever-increasing export potential.

The small-scale and cottage industries of carpet weaving, silks, shawls, pottery, copper, silverware and walnut wood employ over 340,000 artisans in the region. 

Pakistan-occupied Kashmir relies heavily on remittances, particularly those by Kashmiris situated in the United Kingdom, along with agriculture, which contributes to the livelihood of 65-70% of the population.

Remittances were recorded at $540 billion in 2020 by the World Bank, making them a crucial source of revenue for the region, yet an unsustainable and unproductive one.

Agriculture employs about 38% of the workforce but contributes only half of that rate to the GDP, 19.2%. Constituting a threat to the large demographic reliance on agriculture, the sector is experiencing a slowdown due to the unavailability of arable land, uncertainty of climate change, increasing water scarcity, and widespread labour migration from rural to urban areas. 

POWER GENERATION AND TELECOM- PARALLELED INTERESTS, ASSYMETRIC EXECUTION

Further, the Jammu and Kashmir government aims to increase its hydel power generation capacity by twice its current rate, considering an unutilised rate of about 76% of the total identified potential. Only 3,540.15 MW of a total potential of 18,000 MW has been harnessed so far. Jammu and Kashmir is fast-tracking 31 operational hydroelectric projects. 

This includes 1,197.4 MW in the State sector overseen by JKPDC, 2,250 MW under Central agencies (primarily managed by NHPC), and 92.75 MW in Independent Power Producer (IPP) mode.

To double hydel capacity, J&K is developing four major projects, Pakal Dul (1,000 MW), Ratle‑II (850 MW), Kiru (624 MW), and Kwar (540 MW), thereby adding a combined 3,014 MW of new generation. 

The tele-density in the region was reported to be 89.75% according to the Telecom Regulatory Authority of India as of December 2024, with a coverage of 12.15 million wireless subscribers.

The Power Generation sector in PoK, although endowed with natural resources that contribute to a total potential of 8535.92 - 9000 MW, is only meeting its present demand by up to 25%. 

Pakistan’s Power Development Organisation has discovered projects in the Jhelum, Neelam and Poonch river catchments with a total capacity of 8000 MW. The organisation, however, faces several systemic bottlenecks due to low tariff rates, high degrees of losses in transmission and distribution and limited national capacity to invest in new power infrastructure. 

The aforementioned issues do not merely prevent any growth in the sector and a subsequent diversification in the economic structure, but also leave the PDO with inadequate revenues to cover operational and maintenance costs. 

PoK faces a myriad of challenges across various thematic realms that lead to the overall stagnation and backwardness of its economy. Due to its political position, investments in the region are largely discouraged, and the area lacks the required labour force due to a large section of the population from its southern parts being drafted into the military.

Inadequate institutional capability, limited access to financing, susceptibility to geopolitical tensions and weather, along with inadequate infrastructure, compound the socio-cultural instability in the region. 

CONCLUSION

As underscored by External Affairs Minister S. Jaishankar, residents of PoK are increasingly comparing their lives with those on the other side, on the Indian side. They are constantly questioning the nature of the progress pertaining to the people, along with the very existence of said progress. After a history of suppression and oppression alike, the echoes of mistreatment are becoming increasingly audible. 

When the Pakistan police forces attempted to clamp down on a protest by the Jammu Kashmir Joint Awami Action Committee (JAAC) demanding electricity provision as per the hydropower generation cost, subsidies for wheat flour and alleviation from class-based discrimination, widespread civil unrest arose. 

The parallel between the conditions of PoK and Jammu and Kashmir mirrors the differences between Nogales, Arizona, US and Nogales, Sonora, Mexico. Beyond the thinly drawn lines of division remains the same soil, with shared history and common heritage defined superficially through political differences, where one part remains the better administered and the only losses are those borne by the people. 

As demands for a “merger” began to sound, we must reevaluate the merit in the demand itself, because how does one perceive a merger between PoK and India when it has always been part of its agenda? 

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BY DIA ATAL

TEAM GEOSTRATA

info@thegeostrata.com