Low tax collections in Jammu & Kashmir

Tax revenue in Jammu and Kashmir has been steadily dwindling. The total collection last year was a measly Rs 78 crore. The income tax department is understandably concerned.
IT officials claim that nobody, especially in the Valley, wants to pay up. That may not be entirely true. But if IT collections in J&K are low, it has more to do with an economy severely handicapped by years of militancy, than people's reluctance to pay taxes.
Because of disturbed conditions in the state, tourism and business has been badly affected. Many businesses have shifted partially or wholly out of state.
Those that are still there and doing well, may be too scared to declare their real income for fear of militants who would certainly want to extract their pound of flesh.
Given the conditions prevailing in the state, a fall in tax revenue is only understandable. Even if we accept IT officials' contention that people don't want to pay taxes can we really blame them for it?
The government's failure to solve the Kashmir imbroglio has taken a toll on their lives. They live in constant fear of death. There are very few jobs and the state is crying for development.
Every winter the state gets cut off from the rest of the country because of snowfall, and government has done precious little to salvage the situation.
Why should a people having to spent long freezing winters without power to keep themselves warm, want to fill the government's coffers? Instead of going on the offensive and raiding people, the government should consider giving them some tax concessions.
Even a tax-holiday wouldn't be a bad idea to boost an economy reeling under the shadow of militancy for nearly two decades. Just as the government needs special powers to deal with this disturbed area, people here need special tax concessions to cope with what they have undergone.
Doesn't the government give industry incentives to establish itself in difficult areas? Why can't it give Kashmir a tax break along the same lines?