J&K – The issues around the state

J&K violence dents economy, over 5% dip in credit growth in 9 Valley districts

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Mains Paper 3: Internal Security | Linkages between development and spread of extremism.

From UPSC perspective, the following things are important:

Prelims Level: Particulars of Credit growth and its related concept

Mains Level: Article is important because it shows the effects of extremism and terrorism on the state of Jammu and Kashmir Economy.


Dented economic activity in Kashmir

  1. The unrest going on in Kashmir from last year, severely effected economic activity and credit growth across nine districts in the Valley
  2. According to data available with Reserve Bank of India, the credit growth across these districts fell below 5 per cent for the quarter ended March 2017
  3. Bankers say that biggest decline in economic activity on account of the unrest has been in districts such as Srinagar, Shopian, Anantnag, Pulwama and Kulgam

Increased NPA in the economy of Jammu and Kashmir

  1. On account of weak sentiment and lack of confidence among customers and banks, state has also witnessed a rise in bank NPAs over the last three years

Why is Credit growth important?

  1. High credit growth shows that individuals have a higher propensity to borrow and spend, and reflects the tendency of businesses to borrow and invest
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