Decoding the J&K Budget 2025-26

The financial architecture of Jammu and Kashmir witnessed a historic milestone on March 7, 2025, when Chief Minister Omar Abdullah, also holding the finance portfolio, presented the first budget of an elected government in seven years. This legislative event signifies more than a routine disclosure of accounts; it represents a strategic pivot toward economic stabilization and fiscal transparency in a region historically challenged by high debt, geographical barriers, and political shifts. 

For aspirants preparing for the Jammu and Kashmir Services Selection Board (JKSSB) and other regional competitive examinations, understanding this budget is essential, as it forms the cornerstone of current affairs and regional economics. The 2025-26 budget, with an outlay of ₹1.12 lakh crore, is designed as a “zero-deficit” framework, focusing on inclusive growth, infrastructure expansion, and the modernization of the agricultural and industrial sectors.

The Macroeconomic Context: GSDP and Sectoral Dynamics

The Gross State Domestic Product (GSDP) serves as the primary barometer of the region’s economic health. For the fiscal year 2025-26, the GSDP of Jammu and Kashmir at current prices is projected to be ₹2,88,422 crore, reflecting a growth of approximately 9.5% to 10% over the previous year. This growth trajectory is part of a broader expansion where the economy grew from ₹1.64 lakh crore in 2019-20 to ₹2.45 lakh crore in 2023-24. To put this in perspective for aspirants, the real GSDP (adjusted for inflation) is estimated to grow by 7.06% in 2024-25, outperforming the compound annual growth rate of 4.81% observed between 2011-12 and 2019-20.

GSDP Growth and Sectoral Composition 2024-25

The structure of the economy is categorized into three main sectors: Primary (Agriculture), Secondary (Industry), and Tertiary (Services). The tertiary sector remains the dominant engine of the J&K economy, while the primary sector continues to be the largest employer.

In 2024-25, the agriculture sector is expected to rebound to a growth rate of 3.8%, while the industrial and services sectors are projected to grow by 6.2% and 7.2% respectively. For an aspirant, these figures indicate a resilient tertiary sector, largely supported by record-breaking tourism numbers, which reached 2.36 crore visitors in 2024.

Fiscal Indicators: Balancing Receipts and Expenditures

The 2025-26 budget sets a total net expenditure target of ₹1,12,310 crore, excluding provisions for overdrafts and ways and means advances. When these technical provisions are included, the gross receipts and expenditures reach ₹1,40,309.99 crore. A critical concept for JKSSB exams is the distinction between revenue and capital accounts. Revenue expenditure (₹79,703 crore) covers day-to-day operations like salaries and pensions, while capital expenditure (₹32,607 crore) is dedicated to the creation of long-term assets like roads and schools.

Budgetary Aggregates 2025-26 (Estimates)

A point of professional debate exists regarding the fiscal deficit. The Chief Minister’s budget speech targets a fiscal deficit of 3.0% of GSDP for 2025-26, a significant drop from the 5.5% recorded in the revised estimates of 2024-25. However, independent analysis by PRS Legislative Research projects a fiscal deficit of 5.6% of GSDP (₹16,107 crore) for 2025-26. For aspirants, it is vital to recognize that the 3.0% figure likely represents the target excluding certain debt repayment components, whereas the 5.6% figure is a comprehensive calculation of the resource gap.

Revenue Sources and Dependency on Central Assistance

Jammu and Kashmir continues to exhibit a structural dependency on the central government for its financial survival. For 2025-26, the UT’s own tax revenue is estimated at ₹21,550 crore, and non-tax revenue at ₹10,355 crore. Combined, the UT’s own resources (₹31,905 crore) cover only about 35% of the total revenue receipts. The remaining 65%, totaling ₹58,624 crore, arrives as grants from the central government via the Ministry of Home Affairs.

Revenue Breakdown: Internal vs. External

The non-tax revenue is primarily driven by power tariff collections, which have improved due to smart metering and better billing. For aspirants, the “Own Source Revenue” (OSR) policy is a key current affairs term, as the government aims to make every village panchayat self-sufficient through OSR in the next five years.

Sectoral Allocations: Priorities for 2025-26

The allocation of funds across various sectors reflects the government’s vision of social welfare and economic growth. The 2025-26 budget places significant emphasis on rural development, infrastructure, and the power sector.

Power Sector: The Engine of Growth

The power sector is critical to J&K’s fiscal health. Historically, J&K has faced massive losses in power distribution. The 2025-26 budget allocates ₹2,021.37 crore under capital expenditure for power, an increase of ₹762.80 crore over the previous year. The vision is to harness J&K’s 20,000 MW hydro potential to make it a net power exporter by 2027-28.

• Free Electricity: 200 units of free electricity per month for Antyodaya (AAY) families.
• RDSS Scheme: ₹5,620 crore sanctioned under the Revamped Distribution Sector Scheme to modernize the grid and reduce losses.
• Solarization: 22,494 government buildings to be solarized by December, alongside the installation of 5,000 solar agricultural pumps.

Agriculture and Rural Development

Agriculture remains the largest employer in the UT. The sector received an allocation of ₹2,221.58 crore. The flagship Holistic Agriculture Development Programme (HADP) is the primary vehicle for transformation, with a total outlay of ₹5,013 crore until 2027-28.

Rural development is another high-priority area, receiving ₹3,773.93 crore—an increase of nearly ₹990 crore. This includes funding for the Pradhan Mantri Awas Yojana (PMAY-G), with 50,000 new houses planned for 2025-26.

Healthcare and Social Welfare

The budget for the health and medical sector is ₹1,750.50 crore, representing a growth of ₹643.71 crore. A key highlight is the introduction of the SEHAT App, which will offer teleconsultation and integrated digital health records.

In terms of social welfare, the budget is distinctly “aspirant-friendly” and “pro-people”:

• Free Ration: 10 kg of free ration per person for AAY beneficiaries.
• Free Transport: Free ridership for women on government-owned public transport, including e-buses, starting April 1, 2025.
• Pension Hikes: Monthly pensions increased to ₹2,000 for those aged 80+ and ₹1,500 for those 60-80.
• Marriage Assistance: Raised from ₹50,000 to ₹75,000 for economically weaker sections.

Education and Employment

Education was allocated ₹1,388.97 crore. The government plans to upgrade 40 schools to K-12 integrated institutions and establish a National Law University in J&K.

Employment generation is addressed through Mission YUVA (YUVA Udyami Vikas Abhiyan 2.0). This initiative aims to create 1,37,000 enterprises and 4,25,000 jobs over five years. For aspirants, this indicates a shift from traditional government jobs toward fostering an entrepreneurship-led economy. The budget also provides ₹50 crore for venture capital funding to support startups.

Infrastructure and Connectivity

Infrastructure development is essential for integrating the fragmented geography of Jammu and Kashmir. The budget earmarks ₹4,062.93 crore for roads and bridges, with a target of blacktopping 4,000 km of roads in 2025-26.

Key Infrastructure Projects for Aspirants

1. Z-Morh Tunnel: A 6.5 km all-weather tunnel connecting Gagangir and Sonamarg, recently inaugurated by the PM.
2. Vailoo-Singhpora Tunnel: A 10.3 km road tunnel connecting Anantnag and Kishtwar.
3. Anji Khad Bridge: India’s first cable-stayed rail bridge, part of the USBRL project.
4. USBRL Project: The Udhampur-Srinagar-Baramulla Rail Link is nearing full completion to integrate the valley with the rest of India.
5. Banihal Bypass: Reduced travel time between Srinagar and Jammu by 30 minutes.

Fiscal Health: Debt and Sustainability

A critical area of concern for policy analysts is the rising public debt of Jammu and Kashmir. Debt as a percentage of GSDP has risen from 48% in 2015-16 to 52% in 2023-24. In the 2025-26 budget, committed expenditure (salaries, pensions, and interest) consumes more than one-third of the total outlay.

Committed Expenditure 2025-26

After meeting these committed expenses and the ₹9,000 crore required for power purchases, only a limited portion—roughly ₹17,680 crore—remains for pure developmental activity. This fiscal squeeze is why the government is pushing for increased “Own Source Revenue” and digital tax monitoring to prevent leakages.

Governance and Digital Reforms

The 2025-26 budget allocates resources to enhance transparency and efficiency in governance. The e-Unnat portal now offers 1,166 online services, making J&K a leader in digital delivery.

• e-FIR: J&K Police registered its first-ever e-FIR via email at Police Station Khrew.
• RTI Portal: A new centralized portal for 62 government departments.
• BIU & GSTN: Use of Business Intelligence Units to track red-flagged tax cases and ensure robust administration.
• District Good Governance Index: An innovative tool to measure performance at the district level.

Current Affairs Special: High-Yield Points for JKSSB

For aspirants, certain one-liner facts from the 2025-26 budget and Economic Survey are high-probability questions.

• First DRM: E. Srinivas was appointed as the first Division Railway Manager of the Jammu Rail Division (the 70th railway division in India).
• Fully Literate: Ladakh became the first fully literate administrative unit in India in 2025.
• Padma Awards 2025: Farooq Ahmad Mir (Kani Shawl weaving) and Lalit Mangotra (Literature) were recipients from J&K.
• Sahitya Akademi Award 2024: Chaman Arora (Dogri) for Ik Hor Ashwathama.
• Arjuna Award: Rakesh Kumar (Para Archery) was honored by the President.
• First e-FIR: Recorded at Police Station Khrew, Mushtaq Ahmed Bhat.
• Cleanest City: Jammu city was declared the cleanest in J&K under Swachh Survekshan 2024 rankings released in July 2025.
• Give Plastic, Take Gold: A unique environmental scheme in Sadiwara, Anantnag.

Economic Survey 2024-25: Key Findings

The Economic Survey, presented alongside the budget, provides the data-driven justification for government policies. It highlights that 1,984 industrial units with an investment of ₹9,606 crore have been operationalized, creating over 63,000 jobs. The Credit-Deposit Ratio stands at 62.01%, showing improved banking access. However, challenges remain, such as a 79% rainfall deficit in early 2025, which has necessitated new water conservation strategies.

Analytical Outlook for the Region

The 2025-26 budget for Jammu and Kashmir is a sophisticated balancing act. On one hand, it addresses the immediate political necessity of fulfilling welfare promises—such as free electricity and rations—which are essential for a region emerging from a long political vacuum. On the other hand, it maintains a strict focus on “fiscal prudence,” as evidenced by the target to bring the fiscal deficit down to 3.0% and the 37% increase in capital outlay.

For the JKSSB aspirant, the primary takeaway is the transition of J&K from a state of crisis management to one of strategic development. The integration of high-tech initiatives like the SEHAT app and the focus on “Mission YUVA” suggests that the government is preparing the youth for a competitive, technology-driven future. However, the shadow of the ₹1.12 lakh crore debt cannot be ignored; the future health of J&K’s finances will depend heavily on the successful turnaround of the power sector and the sustained growth of the industrial base.

Summary of Fiscal Terms for Students

To excel in the economics section of JKSSB exams, aspirants should master the following terms as used in the 2025-26 budget context:

1. Revenue Surplus: Estimated at 3.8% of GSDP (₹10,826 crore). This occurs when revenue receipts exceed revenue expenditure.
2. Capital Outlay: Proposed at ₹26,836 crore. This is the portion of expenditure that results in the creation of physical assets like dams or bridges.
3. Fiscal Deficit: The gap between total expenditure and total non-debt receipts. The target for 2025-26 is 3.0% according to the CM, but 5.6% according to PRS.
4. GSDP at Current Prices: Projected at ₹2,88,422 crore. This is the market value of all goods and services produced within J&K in a year, not adjusted for inflation.
5. Per Capita GSDP: Estimated at ₹1,92,898 for J&K, which is a key indicator of the average income per person in the region.

Conclusion

The Jammu and Kashmir Budget 2025-26 serves as a foundational roadmap for the Union Territory’s economic recovery and social progress. For JKSSB aspirants, it is not merely a set of numbers but a reflection of the changing socio-economic priorities of the region. The emphasis on transparency through e-governance, the focus on sustainable agriculture through HADP, and the massive infrastructure projects like the Z-Morh tunnel are all part of a larger effort to modernize J&K. 

While the fiscal challenges of high debt and central dependency remain, the budget’s strategic investments in power, youth empowerment, and digital infrastructure offer a hopeful outlook for the coming fiscal year. Aspirants should focus on the specific allocations and new schemes—such as Mission YUVA and the SEHAT app—as these are the most likely candidates for examination questions in 2025-26.

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Sahil Digra

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