AFP/New Delhi

A protester was killed during clashes with government forces Saturday in Indian-administered Kashmir hours after Prime Minister Narendra Modi visited the disputed region, police said.

"The boy was injured in clashes with security forces and died on way to hospital," Javaid Gillani, inspector general of the police, told AFP.

The day was marred with minor clashes; however, the unrest intensified soon after Modi's rally was over and restrictions were eased.

Separatists opposed to Indian rule of the territory had called for a march to counter Modi's rally but authorities imposed a near-lockdown to thwart it. 

Modi announced $12 billion in financial assistance to the restive Himalayan region, more than a year after deadly floods devastated large parts of it.

Speaking amid intense security, the Hindu nationalist leader said he wished to take India's only Muslim-majority state back to its "former glory".

Modi stressed the need to create jobs for young people, boost tourism and infrastructure, and close a gaping digital divide in the conflict-wracked region, where many do not have access to the Internet.

"To fulfil these dreams, the Indian government is announcing an 80,000 crore rupee ($12.1 billion) package to Jammu and Kashmir," Modi told a cheering crowd at a public rally in Srinagar, as authorities imposed a curfew for the second day running.

"My heart wants this money to be spent to change your fortunes, to give strength to your youth, to build a modern Kashmir," he said as some in the audience jumped up and down, waving their arms with joy.

"Not only are Delhi's funds yours, but so is its heart."

Srinagar was hardest hit after the rain-swollen River Jhelum burst its banks in September 2014 leaving thousands stranded.

The floods killed 300 people and caused an estimated $16 billion worth of damage, with thousands of homes and large tracts of farmland ruined, according to official data.

Most Indian prime ministers have announced economic packages for Kashmir in the past, with some seeking political engagement with separatists in the restive region.

"I hope he (Modi) will stop all the violence here," said Bashir Ahmed, a resident of Srinagar who had come to listen to the prime minister along with his family. 

But Modi steered clear of politics in his speech, prompting opposition leader Omar Abdullah to react sharply.

"PM Modi has made the same mistake of weighing the Kashmir issue in Rupees & Paise!!!!," Abdullah, the former chief minister of the state tweeted.

- Pakistan protests -

Authorities imposed stringent restrictions and suspended mobile Internet services -- common during high-profile visits to the volatile region, which is divided between India and Pakistan but claimed by both in its entirety.

Hundreds of separatist activists were arrested ahead of the visit, with leaders confined to their homes to prevent them from holding a protest march against Modi's rally.

"Modi's visit and the economic package will not change anything, like in the past," top separatist leader Syed Ali Geelani told reporters outside his residence, surrounded by police to prevent him from leaving.

Minor clashes broke out in Srinagar and in the northern town of Baramulla on Saturday afternoon, an AFP reporter at the scene said.

In Pakistan-administered Kashmir, about 600 people took part in a rally in the capital Muzaffarabad in protest to Modi's visit, chanting anti-India slogans and pouring black ink on the Indian flag.

Protesters carried placards and banners bearing slogans such as "War will continue until freedom" and "Go Modi Go back".  

"Our fight will continue until each inch of Kashmir is freed from Indian occupation," Syed Salahuddin, a rebel commander who heads several militant groups told protesters, describing the Indian prime minister as the "enemy of Muslims".