J&K UNVEILS ZERO-DEFICIT BUDGET

Jammu and Kashmir’s Rs 1.12 lakh crore zero-deficit budget for 2025-26, presented by Chief Minister and Finance Minister Omar Abdullah, signals a crucial step in the Union Territory’s economic trajectory. Positioned as the first collective fiscal roadmap since the abrogation of Article 370 and J&K’s reorganization in 2019, the budget focuses on inclusive growth, fiscal prudence, and long-term resilience. Addressing the legislative assembly, Abdullah underscored the budget’s role in fostering a self-sustaining J&K while ensuring economic expansion, social progress, and sustainable development.

The budget estimates revenue receipts at Rs 97,982 crore and capital receipts at Rs 14,328 crore. Revenue expenditure is projected at Rs 79,703 crore, while capital expenditure stands at Rs 32,607 crore. With an overdraft provision of Rs 28,000 crore, the total gross receipts match the estimated expenditure of Rs 1,40,309.99 crore. J&K’s tax and non-tax revenues are projected at Rs 31,905 crore, supplemented by Rs 41,000 crore in central assistance and Rs 13,522 crore under Centrally Sponsored Schemes and the Prime Minister’s Development Package. The tax-to-GDP ratio is expected to stand at 7.5 percent, while the fiscal deficit is contained at 3.0 percent of GDP, marking an improvement from the 5.5 percent recorded in 2024-25. J&K’s GDP is forecasted to grow by 9.5 percent to Rs 2,88,422 crore. The budget emphasizes capital expenditure, with strategic investments in infrastructure, agriculture, industry, healthcare, education, and digital governance. Abdullah highlighted the government’s commitment to bridging regional disparities, empowering youth and women, and fostering a business-friendly environment. Extensive consultations with elected representatives, industry leaders, and key stakeholders helped shape the budget, ensuring its alignment with public aspirations. However, its success hinges on addressing persistent challenges such as bureaucratic inefficiencies, delays in implementation, and weak accountability mechanisms. A strong emphasis on infrastructure and agriculture aims to address developmental gaps. Investments in modernizing farming practices, healthcare access, and expanding digital governance are critical for inclusive growth. However, the effectiveness of these allocations depends on timely execution, efficient fund utilization, and minimizing leakages. Strengthening governance mechanisms, performance-based budgeting, and technology-driven expenditure tracking will be crucial to maximizing capital spending impact. The budget prioritizes skill development and entrepreneurship as key solutions to underemployment and skill gaps. The allocation of funds for industry-aligned training programs is a positive step, but success will require close collaboration with industry leaders and educational institutions to ensure skill relevance. Additionally, promoting entrepreneurship through accessible credit, mentorship, and incubation centers can unlock the region’s economic potential and drive innovation. Inflationary pressures remain a key concern, particularly in essential commodities, as rising prices can erode the purchasing power of low-income households. The budget does not explicitly address this challenge, but the government could mitigate its impact by improving supply chain efficiency, expanding storage infrastructure, and investing in cold storage facilities to reduce post-harvest losses. Providing targeted subsidies for essential goods can also help safeguard the financial well-being of vulnerable populations. Jammu and Kashmir’s budget significantly boosts tourism, emphasizing eco-tourism and adventure tourism to align with global trends and generate revenue and jobs. Sustainable growth requires infrastructure investment, responsible practices, and diversified offerings like heritage trails, handicrafts, and cultural festivals. While agriculture and tourism are prioritized, emerging sectors like IT and renewable energy must also be developed to ensure long-term resilience. Incentives for tech start-ups, innovation hubs, and digital infrastructure can position J&K as a competitive IT and clean energy hub. Modernizing handicrafts and integrating them into global markets can enhance profitability. Social welfare measures, including free transport for women, marriage incentives, and support for artisans, promote inclusivity. Major allocations for education, healthcare, and sports aim to upgrade facilities, expand medical seats, and enhance youth development through initiatives like Khelo India Centres and upgraded playfields. Environmental sustainability is highlighted with 2025 declared as the “J&K Green Mission Year,” featuring a new hydropower policy, mining surveillance, and infrastructure projects like helipads to boost connectivity and sustainable growth.

The 2025-26 budget sets an ambitious roadmap for J&K’s economic transformation. Focusing on inclusive growth, industrial expansion, and social welfare, it lays the foundation for a resilient future. However, the key to its success lies in effective implementation, transparency, and adaptability to emerging challenges. With sustained political will and robust governance, this budget has the potential to drive J&K’s progress and economic self-reliance, ensuring prosperity for its people.