Chief Minister Omar Abdullah today said that the Jammu and Kashmir’s fiscal stress stems from high committed expenditure and limited own-revenue capacity.
“Own tax and non-tax revenues cover only 25 percent of our budgetary needs. The geographical difficulties, structural constraints and inefficiencies—especially in the power sector—further accentuate this stress and lead to reliance on central support,” Abdullah said while presenting his second budget of the UT of Jammu and Kashmir in the Legislative Assembly.
To address this, he said that “my government has pursued fiscal reforms to enhance revenues, rationalize spending and improve fiscal transparency.”
“We are building a business-friendly ecosystem that invites innovation and investment, turning Jammu and Kashmir into a hub of enterprise and ideas. This vision has been shaped through wide-ranging consultations with elected representatives, industry leaders, and stakeholders,” he noted.
The Chief Minister, who also holds the portfolio of Finance, said, “Their voices have enriched this Budget and ensured that it remains people-centric. By engaging directly with every Member of this House, we have laid the cornerstone of a new culture of participatory governance.”
“The past year has been nothing but challenging for Jammu and Kashmir and for the entire nation. At national level, we see our growth path suddenly challenged by geo-political challenges,” he stated.
He said, “While the national economy is accelerating at 6–8 percent growth rate, we see our access to global markets being constrained by trade frictions.”
“Even in Jammu and Kashmir, just as our economy was consolidating with renewed vigour, the barbaric terrorist attack at Pahalgam and its aftermath shocked us,” he stated.
He said that the devastating floods in August and September have severely battered the Jammu region, continuing, “these two calamities have further accentuated the fiscal challenges before us. All the sectors of economic activity, including tourism, handicrafts, horticulture and agriculture are badly affected. There is a substantial loss of jobs and business in all sectors, leading to financial stress on the families.”
“This Budget gives us an opportunity to analyse these challenges incisively and respond to them resolutely by reforming with greater vigour,” the Chief Minister said, “This Budget is anchored in the vision of inclusive and sustainable growth and driven by fiscally prudent strategic investments across infrastructure, public services and governance.”
“It seeks to bridge regions, unlock potential, and create pathways of opportunity especially for our youth and women, who are the architects of tomorrow,” he expressed.
“Still Jammu and Kashmir continues to face significant infrastructure deficits in areas like road connectivity, water supply, sewerage, tourism, and power,” he said.
The Chief Minister expressed that for addressing these challenges, substantial financial resources and continued support from the central government are essential.
“My government is actively engaged with the central government to resolve our fiscal issues. I met with union Home Minister and union Finance Minister on multiple occasions. The central government has remained cognizant of our difficulties and consistently supported us through special assistance,” he mentioned.
This year, he said, Jammu and Kashmir was brought under the ambit of Special Assistance to States for Capital Investment (SASCI) Scheme.
“This decision reflects the confidence of the Government of India in the reform orientation, financial discipline, and execution capacity of Jammu and Kashmir,” said the Chief Minister.
He added, “SASCI scheme provides us 50-year interest-free loans for undertaking capital investments and infrastructure projects. It has emerged as a transformative fiscal instrument as it emphasizes on substantive reforms in several key sectors by providing financial incentives for such reforms. My government has proactively leveraged this new opportunity.”
