Public Finance in Azad Jammu and Kashmir

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Azad Jammu and Kashmir is a self governing territory controlled by Pakistan, it lies west of Indian controlled Jammu and Kashmir. It was part of the former princely state of Jammu and Kashmir, which ceased to exist as a result of the first Kashmir war in 1947, fought between India and Pakistan.

An Overview

Azad Jammu and Kashmir
Established 1947
Capital Muzafarabad
Largest City Muzafarabad
Government Type Self governing state  under Pakistani control
Body Legislative Assembly
President Sardar Mohammad Yaqoob Khan
Prime Minister Choudhry Abdul Majeed
Area 13297 Sq Km
Population 4567982
Main Languages Urdu, Pahari, Mir Puri, Gojri
Assembly Seats 49
Districts 10
Tehsils /Town 19
Union Council 182

The northern part of Azad Jammu and Kashmir encompasses the lower area of the Himalayas, including Jamgarh Peak (4,734 m or 15,531 ft). However, Hari Parbat peak in Neelum Valley is the highest peak in the state. Fertile, green, mountainous valleys are characteristic of Azad Kashmir’s geography, making it one of the most beautiful regions of the subcontinent.

The region receives rainfall in both the winter and the summer. Muzaffarabad and Pattan are among the wettest areas of Pakistan. Throughout most of the region, the average rainfall exceeds 1400 mm, with the highest average rainfall occurring near Muzaffarabad (around 1800 mm). During the summer season, monsoon floods of the rivers Jhelum and Leepa are common due to extreme rains and snow melting.


Agriculture is a major part of Azad Kashmir’s economy. Low-lying areas that have high populations grow crops like barley, mangoes, millet, corn (maize), and wheat, and also raise cattle. In the elevated areas that are less populated and more spread-out, forestry, corn, and livestock are the main sources of income.

There are mineral and marble resources in Azad Kashmir close to Mirpur and Muzaffarabad. There are also graphite deposits at Mohriwali. There are also reservoirs of low-grade coal, chalk, bauxite, and zircon. Local household industries produce carved wooden objects, textiles, and dhurrie carpets. There is also an arts and crafts industry that produces such cultural goods as namdas, shawls, pashmina, pherans, Papier-mâché, basketry copper, rugs, wood carving, silk and woolen clothing, patto, carpets, namda gubba, and silverware. Agricultural goods produced in the region include mushrooms, honey, walnuts, apples, cherries, medicinal herbs and plants, resin, deodar, kail, chir, fir, maple, and ash timber.

In addition to agriculture, textiles, and arts and crafts, remittances have played a major role in the economy of Azad Kashmir. One analyst estimated that the figure for Azad Kashmir was 25.1% in 2001. With regard to annual household income, people living in the higher areas are more dependent on remittances than are those living in the lower areas.[28]

In the latter part of 2006, billions of dollars for development were mooted by international aid agencies for the reconstruction and rehabilitation of earthquake-hit zones in Azad Kashmir, though much of that amount was subsequently lost in bureaucratic channels, leading to considerable delays in help getting to the neediest. Hundreds of people continued to live in tents long after the earthquake. A land-use plan for the city of Muzaffarabad was prepared by the Japan International Cooperation Agency.

Remittances by British Pakistanis form an important part of the region’s economy.


The State of Azad Jammu and Kashmir has a parliamentary form of Government. The President is the constitutional head of the State, while the Prime Minister, supported by a Council of Ministers, is the Chief Executive. Legislative Assembly comprises of 49 members out of which 41 are directly elected and 8 are indirectly elected.

Azad Kashmir is a self-governing state under Pakistani control, but is not constitutionally part of Pakistan. It has its own elected president, prime minister, legislature, high court, emblem and official flag.

However, the highest body in the state is the Azad Jammu and Kashmir Council. This council has six members from the government of Azad Kashmir (including the President and the Prime Minister of Azad Kashmir) and five members from the government of Pakistan, including the President of Pakistan who is the chairman/chief executive of the council.

The Ministry of Kashmir affairs and Gilgit Baltistan affairs serves as a link between the Government of Pakistan and the Government of Azad Jammu and Kashmir. The Government of Azad Kashmir and Jammu is based in Muzaffarabad, the interim state capital of the Azad Kashmir disputed territory.

Administrative Divisions

The state is administratively divided into three divisions of Mirpur, muzafarabad and poonch which, in turn, are divided into ten districts consisting of bhimber, kotli, Mirpur, muzafarabad, hattian, neelam, poonch, haveli, bagh, and sundhnoti.