The April 22, 2025, terrorist attack in Pahalgam’s Baisaran Valley killed 26 civilians, mostly tourists, inflicting severe damage on Jammu and Kashmir’s tourism sector.
In the immediate aftermath, tourist arrivals declined sharply, with over 50% drop in footfall in subsequent months compared to 2024 levels. Hotel and houseboat occupancy rates in Pahalgam, Srinagar, and other key areas fell to near zero. Widespread cancellations, including up to 90% of bookings and at least 13 lakh scheduled through August, resulted in revenue losses estimated in hundreds of crores. The sector, contributing 7-8% to the UT’s GSDP and supporting direct and indirect employment for several lakh residents—including hoteliers, taxi operators, ponywalas, shikara owners, and small vendors—experienced prolonged disruption.
Hoteliers faced acute financial strain from renovation loans and potential defaults. Taxi operators had vehicles idle for months. Ponywalas in Pahalgam lost nearly all earnings from treks to Betaab Valley, Aru, and surrounding trails. Shikara owners on Dal Lake saw extended inactivity due to houseboat cancellations. Local artisans and vendors reported equivalent income shortfalls.
The Jammu and Kashmir Budget 2025-26, presented by Chief Minister Omar Abdullah on March 7, 2025, allocated ₹390.20 crore under capital expenditure for tourism—an increase of ₹121.77 crore over the revised 2024-25 allocation. This funding supports infrastructure development, new master plans for Gulmarg, Pahalgam, and Sonamarg, expansion of homestays, promotion of water sports and winter circuits, and new destinations like Basohli and Jammu’s water park. The goal is to raise tourism’s GSDP contribution from 7% to at least 15% over the next 4-5 years.
These allocations, finalized before the attack, focused on long-term growth and sustainability but did not include targeted post-attack relief. Partial recovery occurred later in 2025 through reopened sites, enhanced security, and promotional efforts, yet economic distress persisted among stakeholders.
The forthcoming Union Budget must complement the UT budget with specific compensation measures to address the disproportionate harm from the attack. Recommended interventions include:
– Direct one-time financial grants to taxi operators and ponywalas for lost earnings
– Interest subvention, moratoriums, or partial loan waivers for hoteliers, houseboat owners, and transporters
– Additional funds for aggressive domestic and international marketing to rebuild visitor confidence
While the UT budget’s ₹390.20 crore allocation remains essential for ongoing promotion and infrastructure, targeted compensation is critical for immediate stabilization. Tourism is the lifeline for thousands of households in Jammu and Kashmir. Decisive support will accelerate revival, protect livelihoods, and reinforce the UT’s path to economic resilience.
