The BJP-led central government has scrapped Article 370 and Article 35A of the Indian Constitution, which gave J&K special powers.
Article 370 gave J&K its own constitution and decision-making rights for all matters other than defence, communications and foreign affairs. Article 35A debarred anyone who is not a permanent resident of J&K from buying land in that state. Now that Article 35A is scrapped, Indian citizens who are not residents of J&K will be able to invest in immovable property.
Following this development, we spoke to a few J&K IFAs to understand how this move could impact their business.
Jammu IFA Ravi Kumar is hopeful that this move will bring investment to J&K in different sectors. Consequently, this will create jobs and increase income. The mutual fund industry can be one of the beneficiaries of the rising income, he believes.
Kumar feels that the real estate sector is likely to get a huge boost. Now, it will be easier for residents to sell their lands and encourage them to look for other avenues of investment.
Jammu IFA Shashadri Dev Sharma said that scrapping of Article 370 might benefit tourist friendly places the most, since many will be interested to buy property there. He, however, added that the MF industry is unlikely to get a fillip immediately.
Experts feel that the region has been a conflict zone for a long time now. This will keep any investor interested in the region cautious in the near-term.
Srinagar based Anoop Kumar Ghildiyal said that there will be a slowdown in distribution business in the near-term due to the curfew, but in the long run this could provide a good boost to the industry.
He added that terrorist activities often become a problem for their business. “Unlike other IFAs, we cannot do business when law & order turns bad. How the political scenario unfolds in the near term will be important. I am hopeful that the government will be able to ensure normalcy.”
In June 2019, J&K’s average AUM stood at Rs.2,963 crore. Based on the AAUM, J&K’s rank was 24 among the 36 states and union territories.
