Impact ofArmed Conflict on Economy and Tourism: A Study of State of Jammu and Kashmir

During the last two and half decades Jammu and Kashmir has been under the political turmoil. During the turmoil hundreds and thousands of precious lives have been wasted. When we look into the circumstances in Jammu and Kashmir it is not only the precious lives that has been lost, other segments of the state also received a considerable down fall. In this study we have tried to identify the impact of this armed conflict on the economic growth in Jammu and Kashmir region with special reference to tourism sector. The specific objective of the study is to get the inferences about the impact of armed conflict on: (i) the overall Economy of Jammu and Kashmir (ii) tourism sector in Jammu and Kashmir.The study was conducted in two stages. In the first stage we have identified the relationship between the growth in the armed conflict and growth in economy of the state. Number of fatalities every year due to armed conflict has been taken as proxy for the growth in armed conflict and NSDP has been taken as the indicator of the economic growth. In the second stage the relationship between number of fatalities and tourist count has been identified. Thestudy finds a significant negative relationship between the growth in the armed conflict and economic growth of the Jammu and Kashmir. Also a significant negative relationship between the armed conflict and economy of the state was found to be occurring. Results revealed that with every unit increase in the armed conflict (which in this case is number of fatalities) decreases the NSDP by .065 units (unit is Rs in Billions). Also when we tried to identify the relationship between the armed conflict and tourism a very significant negative correlation between the two variables was found to be existing (correlation=-.65). While analyzing the impact of armed conflict on the tourist count of the state it was found to be having very high impact. The regression results imply that with every one unit increase in the armed conflict there is a decline of .232 units in the tourist count (here unit of tourist count is in thousands). Thus supports the results which were interpreted by the graphical representation. Implications of the study are also discussed.