This is an interesting post by Shaykh Shakeel Bin Abdullah which shows one of the economic reasons why India holds on to Kashmir so violently & whips up nationalism to justify it. It isn’t a question of real estate & territory but, among other compelling economic reasons, hydroelectric power.

1) 30% of the present Indian hydroelectricity is produced in Kashmir.

2) 7 out of the 11 hydroelectric projects announced by the National Hydroelectric Power Corporation (NHPC) are located in Kashmir, accounting to 60% of the total electricity production.

3) NHPC, in rest of the Indian states, works on a 50:50 sharing basis, i.e. 50% of the electricity goes to the state and 50% is given to NHPC for their investment. But in Kashmir the equation changes. Only 12% is given to Kashmir as royalty and 88% is taken away by NHPC & supplied to the northern grid of India via Punjab to Delhi, Haryana etc.

4) Incidentally, peak hour requirement of electricity in Kashmir is 2000 Megawatts. Not able to fulfill it, the government of J&K has to buy electricity worth 3600 crores annually from the same northern grid to which it supplies its produced electricity.

5) NHPC succeeds in producing electricity at the cheapest possible rate in Kashmir i.e 25 paise per unit. But to fulfill its peak hour requirement, Kashmir has to buy the same electricity at Rs. 10 a unit from the northern grid, generating humongous profits for the sellers!

6) The Indus Water Treaty which was signed between India & Pakistan lays down the sharing pattern of the water bodies originating in Kashmir. As per that treaty, India has the exclusive right to use the water of the three eastern rivers viz a viz Sutlej, Beas and Ravi before they enter pakistan. And Pakitan has the right to use the water of other three western rivers, namely, Jhelum, Indus and Chenab. What Kashmir gets in return is 12% royalty from India. Isn’t it ironical? We can easily bargain, Pakistan has more riparian rights than India. I think this scares Indian state.

7) Punjab owes 2,200 crores on account of compensation to Kashmir.

As per the figures given by Chief minister Omar Abdullah in may 2010, Kashmir suffers an annual loss of 50000 crores when its water is used by India and Pakistan. Keeping the share 50%, Kashmir is suffering a loss of whooping 25000 crores annually because of India. Incidentally, in the year 2009-10, Kashmir received an annual central assistance of 13952 crores from India.

9) Out of these 13952 crores, 3600 crores was spent on buying its own electricity from the northern grid which was stolen by India. 5500 crores was used for the defense purpose just because 670000 troops are present to guard Kashmir from 300 militants (Government figures) present over here. Rest of the money is being used for ‘development’ purpose.