Pahalgam Has Proved J&K's GDP Can't Be Taken as the Sole Indicator of 'Normalcy'
The biggest terrorist attack targeting civilians since the 26/11 Mumbai terror attack, that has reportedly killed more than two dozen civilians in Kashmir's Pahalgam on Tuesday, frames one of the most significant internal security challenges for New Delhi. Taking place while US Vice-President J.D. Vance was in India and Prime Minister Narendra Modi on an overseas trip to Saudi Arabia, this attack is one with external ramifications and comes at a time when tourism was peaking in the valley.
The terrorist attack was aimed at tourists at Baisaran, an off-the-road meadow. At least 26 people have been killed and several others injured. The Resistance Front (TRF), a shadow group of the banned Pakistan-based Lashkar-e-Tayabba (LeT) terror group, has claimed responsibility for the strike.
Five years after Article 370 was read down and the state converted to a union territory, the incident in Jammu and Kashmir presents a complex and conflicting picture for the people living in and now visiting the valley.
On one hand, the government in Delhi has consistently highlighted the so-called success of J&K’s economic revival, improved connectivity and booming tourism as markers of growth and ‘developmental’ progress since the abrogation. Given how tourism has fuelled local employment and businesses, this is seen as a pointer to a more prosperous future for locals.
On the other hand, despite the union territorialisation of an independent state by the BJP-run Union government in Delhi, a troubling data point indicates a resurging rise of militancy, particularly in Jammu region – a shift that experts and locals alike describe as both strategic and deeply destabilising. We analyse this here.
Since the removal of Article 370 in August 2019, the Delhi power centre has repeatedly emphasised a narrative of peace, development and "normalisation".
In terms of economic indicators, Jammu and Kashmir’s Gross State Domestic Product (GSDP) has shown modest but steady growth. Between 2019 and 2025, the real GSDP increased with an average growth rate of 4.89%, slightly higher than the 4.81% seen between 2011 and 2019. For the fiscal year 2024–25, the GSDP is projected to reach Rs 1.45 lakh crore, with the per capita income expected to rise by 10.6% to Rs 1,54,703. The tertiary sector remains dominant, accounting for 61.7% of the economy, indicating a shift towards services and tourism.
Tourism, often positioned as the bedrock of J&K’s development narrative, has shown unprecedented growth. In 2022, the region welcomed a record-breaking 1.62 crore tourists – the highest in 75 years. The number grew to 2.12 crore in 2023 and climbed further to 2.36 crore in 2024, including 65,452 foreign tourists. This rapid increase has been widely interpreted as a validation of improved security and infrastructure.
Kashmir Valley Performance
(Combined performance of Branded Hotel Supply in Srinagar, Gulmarg, Pahalgam and Sonamarg)
Source: Hotelivate Research
However, a resurgence in militant activities, particularly in the Jammu region, which had traditionally seen less violence compared to the Kashmir Valley, saw a gradual de-securtisation of Kashmir Valley to increase the security presence in Jammu. There are a few unanswered questions too that merit further scrutiny.
While there have been constant attacks on the security forces in the Pir Panjal belt, there have been attacks on non-locals in Kashmir. Yet the existing security apparatus left the major area unattended. There was also an attack on ZMorh tunnel in Sonamarg, with security inputs suggesting that the terrorists might have infiltrated from Pahalgam. Yet Pahalgam was left defenceless, and one needs to investigate this issue further. Pahalgam is also accessible from Pir Panjal particularly Kishtawar, and it is possible that attackers might have come from that side.
According to a detailed report, more than 40% of the security personnel killed in Jammu and Kashmir between 2021 and 2024 died in Jammu alone.
This marks a clear strategic shift in militancy, with insurgents exploiting relatively less fortified zones and causing maximum disruption. The Ministry of Home Affairs has claimed a 70% reduction in militancy-related incidents post-2019, but this statistic masks the qualitative change in the geography and nature of violence.
It’s likely that the increased securitisation of the Jammu region at the cost of perhaps de-securitising the Kashmir valley may have left a hole, allowing for the brazen nature of terrorist attack seen in Pahalgam.
As documented by The Hindu, J&K has witnessed dozens of major attacks on civilians since 2000. The human cost of rising militancy has been steep. Civilian deaths have continued unabated, and terror attacks on non-combatants remain alarmingly frequent.
The Pahalgam attack followed another incident just days earlier in which five tourists were injured in a grenade attack in the same area. The timing of these attacks – just as the peak tourist season was kicking off – strongly suggests an attempt to paralyse the economic revival driven by tourism and sow panic among both locals and visitors.
Number of incidents since 2010 that resulted in fatalities
Source: The Hindu
Post-2019 data also shows a persistent toll on Indian security forces. According to The Guardian, nearly 200 security personnel and more than 350 civilians have died in militant violence since the Article 370 abrogation.
The evolving nature of militancy – smaller, tech-savvy and embedded in local communities – has made it harder to predict and counter. Despite frequent gunfights and “successful” counterinsurgency operations, incidents like the 2024 Reasi attack, in which nine Hindu pilgrims were killed in a bus ambush, underscore the inability of the security apparatus to prevent high-impact strikes.
While the government’s economic focus is commendable, the dissonance between macroeconomic indicators and ground realities is stark. Locals in areas like Doda and Rajouri report an atmosphere of fear, with people avoiding routine activities such as farming or attending school. Infrastructure projects and economic schemes are often cited in official press releases, but these gains remain fragile in the face of growing militancy and targeted attacks on civilians and tourists.
The trajectory of violence also raises uncomfortable questions about the effectiveness of the post-Article 370 security doctrine. Though security forces have eliminated several top commanders and reduced infiltration from across the border, the persistence – and in some places, intensification – of terror activities highlights the adaptive nature of the threat.
The focus on Jammu, once considered relatively peaceful, is no accident. It is both symbolic and strategic, designed to challenge the government’s claims of peace and development, and to hit where it hurts most – tourism and public confidence.
In conclusion, while data on GSDP, per capita income and tourist arrivals might suggest progress, they cannot be the sole indicators of normalcy. The economic revival of Jammu and Kashmir is real, but it exists in parallel with a growing, shape-shifting militant threat that now increasingly targets civilians and soft economic sectors like tourism.
The challenge for Delhi and local policymakers, along with the army and government security agencies going forward is not just to ensure greater economic freedom for the people of J&K, or a rise in the state’s GDP growth to boost its tourism revenue numbers, but to ensure basic civic and political freedom along with sustained efforts for safeguarded, greater security.
Deepanshu Mohan is a Professor of Economics, Dean, IDEAS, and Director, Centre for New Economics Studies. He is a Visiting Professor at London School of Economics and an Academic Visiting Fellow to AMES, University of Oxford.
Ankur Singh is a Research Assistant with Centre for New Economics Studies (CNES) and a team member of its InfoSphere initiative.
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