With the proposal of some freebies, Jammu and Kashmir Chief Minister Omar Abdullah presented a Rs 1.12 lakh crore budget for the Union Territory for the fiscal year 2025-26 on Friday.
Unveiling the budget in the Assembly, Omar Abdullah, who also holds the Finance portfolio in the Union Territory, announced that the total budget estimates for the fiscal year 2025-26 stand at Rs 1,12,310 crore.
"The total net budget estimates for the fiscal year are Rs 1,12,310 crore, including provisions for ways and means advances and overdrafts," the Chief Minister said.
"Jammu & Kashmir stands at the threshold of a new era of peace and prosperity, with a semblance of normalcy returning after over three and a half decades of turmoil," the Chief Minister said, adding, "This improved environment is contributing to economic progress, with J&K's economy expanding from Rs 1,64,103 crore in 2019-20 to Rs 2,45,022 crore in 2023-24."
"In 2024-25, the primary, secondary, and tertiary sectors are projected to contribute 20.00%, 18.30%, and 61.70% to GSVA, respectively," he said, adding that it is a testament to the strong foundations laid by J&K's leadership that, despite geographical challenges and decades of turmoil, the socio-economic indicators continue to remain robust.
"I am confident that J&K will emerge as a leading region in development, playing a vital role in our vision of a developed India by 2047," the Chief Minister expressed.
Improving Fiscal Situation
The Chief Minister said that due to historical challenges of high committed expenditures and limited revenue streams, Jammu & Kashmir has been facing consistent fiscal stress.
"Own tax and non-tax revenues cover only 30% of revenue receipts and 25% of budgetary needs. An unfavorable geographical location and years of unrest have hindered industrialization, straining resources and deepening fiscal constraints," Omar Abdullah stated, adding, "This has been further compounded by the fact that circumstances have not allowed us to fully harness sectors where we have immense potential."
"As a result, J&K remains heavily reliant on central grants and often requires ways and means advances and overdrafts to manage liquidity," he observed.
Steps Initiated to Expand Revenue
The Chief Minister said that over the past months, the government has made significant strides in expanding revenue, curbing non-priority spending, and enhancing fiscal transparency.
"GST compliance has improved through rigorous monitoring and dealer expansion. To further strengthen revenue realization, we will continue implementing GST tracking for capital works and risk-based e-way bill verifications," he announced, adding, "Additionally, red-flagged cases will be closely scrutinized using inputs from the Business Intelligence Unit (BIU) and GST Network (GSTN) to prevent leakages and ensure a more robust tax administration."
He further mentioned that the government has successfully introduced e-Stamping for registrations and launched the e-Abgari platform for the Excise sector, ensuring greater transparency in excise auctions.
"With robust improvements in billing, metering, and digitization, non-tax revenue has risen to Rs 5,824 crore as of January 31, 2025, while tax revenue has reached Rs 11,650 crore — both set to exceed last year's collections," the Chief Minister said, adding, "Moving forward, we will continue to build on these initiatives to enhance revenue generation and fiscal management."
Salaries, Pensions, and Power Losses Strain Finances
The Chief Minister highlighted that the government's fiscal stress stems from high committed expenditures, which account for over 70% of total spending, with salaries and pensions alone making up nearly 60% of revenue expenditure.
"Additionally, high AT&C losses and power sector under-recoveries further strain finances," he said, adding, "We are reforming metering, billing, and collection to strengthen the power sector."
"Under-recovery has dropped from Rs 6,552 crore in 2022-23 to Rs 5,244 crore in 2023-24, with a target of Rs 4,200 crore in 2024-25," he said, adding, "Expanding the consumer base, smart meters, online billing, and aerial bunched cables are driving this turnaround."
"High AT&C losses have resulted in huge outstanding liabilities for power purchases, for which Rs 28,000 crore were borrowed in the last few years, raising public debt from 48% of GSDP in FY 2015-16 to 52% in 2023-24," he revealed, adding, "To mitigate this, we are reducing high-cost debt, optimizing liabilities, and calibrating repayment schedules for long-term fiscal stability."
Key Announcements
- CM Omar Abdullah proposes free ration of 10 kilograms per person to all AAY beneficiaries from April 1, 2025.
- Enhancement of pension for vulnerable sections of society, including the elderly, widows, divorcees, and specially-abled persons. The revised pension amounts are:
- Rs 1,250 per month for persons below 60 years of age
- Rs 1,500 per month for persons aged between 60 and below 80 years
- Rs 2,000 per month for persons aged 80 years and above
- Enhancement of financial assistance under the Marriage Assistance Scheme from Rs 50,000 to Rs 75,000 for AAY category girls.
- Free ridership for women in all government-owned transport buses, including e-buses, from April 1, 2025.
- 200 units of free electricity per month for all AAY families in J&K. Integrated with the PM Surya Ghar Bijli Yojana, this initiative will enable the installation of grid-connected solar systems, generating the required power and eliminating electricity bills.
- Stamp duty on property gifted to blood relatives to be reduced to zero.
- Setting up of National Law University and Jammu & Kashmir Skill and Entrepreneurship University announced.
