For over two decades, Jammu and Kashmir has suffered from a reputation as a trouble spot due to an ongoing insurgency. But with the militant groups losing steam, the level of violence has abated in recent years, spawning economic benefits in the form of rising tourism numbers.

In 2011, the number of terrorism-related incidents fell drastically to 189, from 488 the previous year. Several Jammu and Kashmir (J&K) districts have been declared completely free of militant control, including Kargil, Leh, Doda, Reasi, Jammu, Kathua and Samba.

In a number of other districts -- Anantnag, Kulgam, Budgam, Shopian and Ganderbal -- militancy rates have plummeted to single digits, according to J&K Home and Tourism Minister Nasir Aslam Wani.

"Double digit insurgency figures existed only in four districts, namely Baramulla, Srinagar, Pulwama, and Kupwara," Wani told Khabar South Asia.

One key reason is that the insurgents have suffered serious setbacks, with top leaders having been killed or captured. During a 2011 shootout, Indian security forces killed Abdullah Uni, the Kashmir operational commander for a key extremist organisation, Lashkar-e-Taiba (LeT) Later, divisional Commanders Abdul Rehman and Qari Zubair suffered the same fate.

"Loss of important leaders is one of the primary reasons for the decline in terrorism in the state," J&K Minister for Social Welfare Sakina Yatoo told Khabar. "As militants lose their leaders, they have become increasingly reluctant to engage in combat with the security forces."

According to South Asian Terrorism Portal, a website operated by the Institute for Conflict Management, heightened vigilance among security forces has also contributed to the lessening in violence. According to figures released by the Ministry for Home Affairs, the Indian army arrested 166 militants and seized arms in 115 raids in 2011.

At the same time, Yatoo said, state authorities are taking steps to bring young people lured by the insurgency back into regular life.

The government has already received 800 applications for a new rehabilitation policy, he told Khabar.

The payoff in terms of benefits to the economy has been dramatic. According to local media, an unprecedented 1.1 million visitors came to Kashmir in 2011, a huge jump from 2010's 738,000. Kashmir Tourism Director Farooq Shah is hoping that number will reach 2 million in 2012.

"Jammu and Kashmir is definitely impressed with the new high [numbers] of tourists…visiting the state after a long lull. After all, the state has never seen such a rush in tourists ever," J&K Tourism Minister Nawang Rigzin Jora told Khabar. He said the leap in tourist arrivals was the largest Kashmir has seen in 25 years.

Mahmud Alam, 55, has a shawl and carpet manufacturing unit near the Dal Lake and hawks his products in the plains during the winter months. He says the changes are both evident and welcome.

"There was a time when we were forced to shut down our business, as many of us were tortured and our shops burnt by the militants – some of them our own youth," he told Khabar.

"However, with the slide in terrorist activities both in Kashmir and across the border, things are looking up. While business has increased manifold in recent years, the inflow of tourists as well as film shootings in Gulmarg and other places have also increased," Alam said.