J&K was the costliest state to live in August

J&K was the costliest state to live in August

The abrogation of Article 370 meant that inflation rose to 7.23% compared to the rest of the nation's 4.4% (PTI File Photo)

The inflation in Jammu and Kashmir soared to 7.23% compared to national average of 4.4% in August due to the uncertainty prevailing in the valley since August 5, when the Centre abrogated state’s special status under Article 370 of the Constitution.

The monthly data released by Union Ministry of Statistics and Program Implementation reveals that J&K was the costliest place to live in August compared to other states of the country. The inflation rate of the state was derived from price data collected from selected towns and villages by field operations division of National Statistics Organization.

Experts blame ongoing uncertainty in Kashmir as one of the main reasons for rising inflation. “Price rise is driven by demand and supply. When demand is more and supply is less, prices soar. Due to restrictions, shutdown and communication blockade in Kashmir for the last 52 days, supplies dwindled leading to price rise,” an economic expert said.

In the past two months, the Commercial Taxes department has recorded a decline in supply of material from other parts of the state, which directly had an impact on the supply scenario in Kashmir, resulting in price rise of essential commodities.  Even the prices of locally produced vegetables and fruits have skyrocketed.

Closure of business establishments and abrupt halt in developmental works has a tumbling effect on the overall economy of Kashmir with major chunk of cash flow circulated in the market at the moment coming from the salaries of government employees. 

Despite being consumer economy, the influx of supplies from outside state too have declined, an official of Commercial Taxes department said. “As the cash flow has decreased in the market, the purchase power of people too has taken a hit. This is the reason why influx of supplies has decreased as people don’t have money,” he said.

About 7,20,000 trucks carrying various commodities enter and 6,70,000 trucks carrying goods move out of the state annually.