With the state in practical and virtual lockdown, Home Minister Amit Shah announced scrapping of Article 370, which granted special status to Jammu and Kashmir. There has been euphoria amongst supporters of the move and outrage amongst those against the move, who have called it the death nail in Democracy of India.
It’s a move that has made not only Indians but the entire world sit up and take notice. Pakistan has severed bilateral trade with India. The rupee dropped 77 paise to the dollar soon after the move was announced. But how does scrapping of Article 370 affect India Inc.? We look at the impact the move has had and what could be the fallout in the long run.
What is Article 370?
As Maharaja of Kashmir Hari Singh signed Instrument of Ascension to India, Sheikh Abdullah was appointed the Prime Minister of the interim government in the state. In 1949, Sheikh Abdullah joined the Indian Constituent Assembly and worked out a special status for Kashmir. That’s how Article 370 came into being and has remained mired in controversy since.
According to its provisions, Indian parliament needs approval of J&K government before applying new laws. However, defense, communications, foreign affairs and finance were excluded from this provision. For seven decades, it has meant that fundamental rights of citizens of J&K, law of citizenship, and ownership of property vary from those in rest of the country.
The fallout on business and India Inc.
Now that Article 370 has been scrapped, citizens of others states in the country can buy property in J&K. This is seen as the most immediate and obvious outcome, which has pleased the real estate market no end. Abhishek Lodha, MD & CEO, Lodha Group said to The Hindu, “We may have short term problems but in the medium term it will solve Kashmir issue with economic and social growth.”
Only the people of the state can truly authenticate the veracity of that belief. But many industry big guns have been supportive of the move. Some have spoken of natural resources of the state that remain untapped. Others talk about how the move boosts ease of doing business. Harsh Goenka, Chairman RPG Enterprises, from the family of early investors in the state believes the decision will spur investment, boost employment but only when unrest settles down.