Updated: Apr 22

Azad Jammu and Kashmir is a nominally self-governing jurisdiction administered by Pakistan. The territory lies west of the Indian-administered state of Jammu and Kashmir, and Historically Kashmir was independent on the eve of 13th August 1947 before creation of Pakistan and was part of the former princely state of Jammu and Kashmir. The original territories of Azad Jammu Kashmir are divided into two territories, one is the present AJK and other is heavenly Gilgit Baltistan. However the Gilgit Baltistan was given in administrative control of Pakistan by Azad Kashmir Government in 1949 through Karachi Agreement.

I came across many questions regarding state of Azad Jammu Kashmir during my entire life and recently one of my peers pointed out that Kashmir is an economic burden on Pakistan which led me to put pen to paper and present some facts. Although Kashmir is considered as integral part of Pakistan but it is mutual cooperation that is making both the country and the independent state to carry out their working so let’s have a brief look at the importance of Kashmir in Pakistan.


The most important concern for any country is its security. The Geo-Strategic Position of Kashmir is important in that regard. Kashmir is situated at the Line of Control and is always on fire line of Indian Army. If Kashmir is lost in any situation, Pakistan is losing its first line of defense. Northern areas link Pakistan with china and this Silk Road is making Pakistan`s economy strong. The economically most significant project in the history of Pakistan, CPEC, has indispensable part in Northern areas i.e. Gilgit Baltistan which is technically a part of the larger Kashmir state. CPEC cannot be completed without Northern Areas and AJK.


The Azad Kashmir has more than 1 million taxpayers excluding the population of Gilgit Baltistan and all the tax is collected by the Federal Government through its Federal Board of Revenue till 2018. So the amount Kashmir should get as an independent state is being given to Pakistan. The oppressing act is that Kashmiri Tax payers were not being considered as active tax payers of Pakistan till 2018 and categorically were being subjected to higher rates of withholding tax applicable to non-filers on various transactions such as cash withdrawal from banks, banking transactions, registration of motor vehicles, collection of motor vehicle tax in the territory of Pakistan because they did not fall within the ambit of definition of the term "filer" in terms of sub-section (23A) of section 2 of the Income Tax Ordinance, 2001 as their name(s) did not appear in the active taxpayers list issued by the Federal Board of Revenue periodically.

The mobile network companies as well as digital media broadcaster operating in Kashmir jurisdiction are paying tax to Pakistan Government directly which is unjustifiable. The efforts and remittance given by overseas Kashmiri cannot be neglected, as per latest reports US$300 million in remittances is being sent back to Kashmir a year, contributing to the economy. One of biggest contributing factor`s to Pakistan`s economy is its minerals; Northern Areas and AJK are the heart of minerals. The minerals found in this territory include Gem Stones to Marble, Granite, Rubies, Coal and what else might a country want if it has Uranium and Radium.


The Mangla dam reservoirs in operation. (Pakistan Today)

A famous saying “Water is the driving force of all natures”, the Northern areas and Azad Kashmir are the major water/power sources of all the areas of Pakistan. The Mangla Dam located at Mirpur Azad Kashmir is the 2nd Biggest dam of Pakistan and is the only source of the upper and lower Jhelum canal irrigation system for the Potohar region to Sargodha region. The upper and lower Jhelum canals irrigate regions of Gujranwala, Gujarat and Sargodha to some areas in Jhang. The farming and land based/agrarian practices/sources of income in these areas would all become precarious if it were not for these two canals. The Mangla Dam and more than 20 small dams in AJK and Northern Areas are fulfilling needs of Pakistan. Moreover the country`s major source of electric power is Mangla dam (for the construction of which many Kashmiri families were uprooted and not compensated enough either) and the upcoming power project The Neelum Jehlum Hydro Electric Generation Project, Karot at Hollar and the Gulpur Dam at Barali are located in the jurisdiction of AJK. People of AJK have always open heartedly consented and sacrifices for construction of Hydro Electricity Generation Dams and reservoirs i.e. Mangla, Neelum- Jehlum, Karot, Gulpur (Barali) and accepted their dislocation unlike many people of KPK and Sindh who have strongly resisted Kalabagh Dam.


So, truth be told Kashmir is playing a major role in making Pakistan economically stable. Although, in all fairness, the efforts of Pakistan in the development of the Kashmir region cannot be overlooked either but these efforts are on the basis of equity and equality. There is no free lunch! Kashmir was not dependent and will not be dependent on any country. Kashmir Government is working on a mutual cooperation basis with Pakistan Government. And the people of AJK have nothing but love, and affection for Pakistan and their Pakistani brethren but the sentiment at times is not reciprocated and in their ignorance towards facts, many well intention-ed Pakistanis are seen to commit the erasure of Kashmir’s and a misconstruing of facts, and thus sowing seeds of hatred through their discourses. Long live Pakistan and Kashmir relationship.

(Published by Pakistan Today, The publications rights remains with author)