Terrorism and India: An Economic Perspective

Abstract

This study seeks to evaluate the terrorism and economic performance of the economy of India from the year 2004 to the year 2013. The analysis of the study is based on the model of Economics of Terrorism Monitoring Model (ETM-Model) introduced by Khan, Ruiz Estrada, and Yusof (2015). The main objective of this research study is to scrutinize the terrorism situation in the economy of India. The effects of terrorism on the economic performance is measured by economic desgrowth. The application of the ETM-Model has five levels (a) The terrorism frequency rate (β), (b) The terrorism vulnerability rate (µT), (c) The terrorism devastation magnitude rate (λ), (d) The economic desgrowth rate (δ), and (e) The terrorism vulnerability surface (VV-surface). The economic desgrowth generated from economic growth rate due to terrorism in the year 2004 for the Indian economy is -0.91%, while the economic desgrowth for the year 2013 of the same economy is -2.05%. The study concludes that terrorism is one of the main issue of the Indian economy from the economic perspective. Indian government may work with Pakistan to resolve the issue of Jammu and Kashmir to overcome the terrorism issue. It is also needed for the Indian economy to make harmony between Muslims and Hindu within the territory of India.

Keywords: Terrorism; Economic Desgrowth; India

JEL Classification: R11, R12