For the past four years, writing in these pages, I have been arguing that the economic crisis in Azad Jammu and Kashmir (AJK) needs to be read through a political economy lens. I have noted that the prevailing political settlement in AJK has major inadequacies which limit its ability to build the productive sectors of its economy.

In 2022, I provided a bird's-eye view of AJK's economic development. The numbers then were grim, and they haven't improved: a labour force participation rate of just 22.9 per cent, barely half the national average; a female participation rate of 7.9 per cent against a national 23 per cent; unemployment at 11 per cent, twice the national figure; youth unemployment at 27 per cent. Agriculture, the largest employer, received around one per cent of the budget, and tourism remained a rounding error at 0.27 per cent. The conclusion was that AJK was generating a growing "reserve army of young unemployed people", and it has only got worse.

In 2024, when mass protests erupted under the umbrella of the Joint Awami Action Committee (JAAC) across the territory's districts, I offered a political economy explanation of why a nationwide inflationary shock had produced sustained mobilisation in AJK. I also argued that this movement was led not by traditional political parties but by grassroots action committees operating on a non-hierarchical basis in villages and markets.

In 2025, as the ruling coalition in Islamabad engineered yet another political reshuffle in Muzaffarabad, our political economy analysis made it clear that no carousel of elites would restore legitimacy. This is because the crisis flows from two interlocking conditions: "symbolic autonomy" and "economic exclusion". Elites in Muzaffarabad and Islamabad made no structural reforms in this regard, and pressure from below has grown bigger and bigger, now arriving in its most formidable form.

What has been the latest response from elites? A communications blackout and a brutal crackdown across AJK, with the loss of multiple lives, especially in Rawalakot. Instead of correcting course, a new narrative has been churned out, namely that the residents of AJK live on "grants" and "subsidies" from Islamabad. I would like to underscore that this narrative does not reflect the ground reality. Second, it will produce further alienation among the people of AJK. Let me deconstruct it based on facts and on historical and political context.

When Punjab or Sindh receives its NFC transfer, no one calls it a grant or a favour, and rightly so

When Punjab or Sindh receives its NFC transfer, no one calls it a grant or a favour, and rightly so

It is true that when you open AJK's budget for fiscal year 2025–26, you will see that the largest single source of revenue is a "grant" from Islamabad. Against total revenue receipts of Rs260 billion, the government projected about Rs149 billion from what........

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