Jammu and Kashmir’s economic performance in 2024-25 reflects both encouraging growth and important fiscal challenges. According to the latest financial assessment, the union territory recorded a gross state domestic product growth rate of 11.18 per cent in 2024-25, slightly lower than the 12.51 per cent recorded in 2023-24. Even with this moderation, the growth trend remains strong, especially when seen against the broader five-year pattern. After the Covid-affected growth rate of 2.25 per cent in 2020-21, the economy recovered to 12.38 per cent in 2021-22, registered 11.27 per cent in 2022-23, rose to 12.51 per cent in 2023-24 and then eased to 11.18 per cent in 2024-25.
The overall size of Jammu and Kashmir’s economy has expanded significantly during this period. From Rs 1.67 lakh crore in 2020-21, the GSDP increased to Rs 2.62 lakh crore in 2024-25, marking a rise of nearly Rs 95,000 crore over five years. This clearly shows that the economic base of the Union Territory has widened in a meaningful way. Per capita income has also shown steady improvement. It stood at Rs 1,01,645 in 2020-21, increased to Rs 1,12,898 in 2021-22, then to Rs 1,23,614 in 2022-23, Rs 1,40,051 in 2023-24, and finally reached Rs 1,54,826 in 2024-25. This upward trend indicates improving income levels and a gradual strengthening of household earning capacity, although the per capita income of Jammu and Kashmir still remains below the national average. The Union Territory’s share in India’s GDP also registered a slight increase in 2024-25. It stood at 0.79 per cent during the last fiscal compared with 0.78 per cent in 2023-24. However, this figure also shows that the share had declined over the years from 0.85 per cent in 2020-21 to 0.80 per cent in 2021-22 and 0.78 per cent in both 2022-23 and 2023-24, before witnessing the recent marginal recovery. On the fiscal side, revenue receipts during 2024-25 increased by 6.12 per cent. However, this increase was largely driven by higher grants-in-aid from the Centre. In contrast, the growth in Jammu and Kashmir’s own tax revenue was only 2.5 per cent. This shows that while the revenue position has improved, dependence on central assistance continues to remain substantial. The expenditure pattern also presents an important picture. Total expenditure during 2024-25 was Rs 82,547.28 crore. Out of this, revenue expenditure accounted for 85.37 per cent, indicating that a very large share of government spending was consumed by recurring obligations. Committed expenditure and subsidies together formed 68.39 per cent of revenue expenditure and 58.39 per cent of total expenditure. This left limited fiscal space for capital expenditure and fresh infrastructure investment. Capital expenditure remained below budgeted levels, suggesting that development-related asset creation did not move at the pace originally envisaged. This is significant because capital expenditure is crucial for roads, power, irrigation, hospitals, schools and other long-term productive sectors. The report also noted that the Union Territory was not able to contain the fiscal deficit within the target levels set in the budget documents. The liability position has also become heavier. Outstanding liabilities of the Union Territory rose from 8.87 per cent of GSDP in 2020-21 to 17.21 per cent in 2024-25. When liabilities of the erstwhile state are also taken into account, the outstanding liability burden rises to 48.47 per cent of GSDP in 2024-25, excluding off-budget borrowings of Rs 23,197.08 crore. In addition, undischarged liabilities relating to the Guarantee Redemption Fund, interest liabilities, the Consolidated Sinking Fund and the pension fund stood at Rs 934.02 crore, which amounted to 1.13 per cent of total expenditure.
Overall, the data present a mixed but important picture. Jammu and Kashmir continue to record healthy economic growth, rising per capita income and a larger economic base. At the same time, concerns remain over slower own tax growth, high dependence on central grants, limited capital spending, and increasing liabilities. The challenge ahead will be to sustain growth while improving fiscal discipline, strengthening internal revenue, and creating more room for development-oriented investment. Greater investment in infrastructure, productive sectors and efficient budget execution will help convert strong growth figures into more balanced, durable, and inclusive economic progress.