Chief Minister Omar Abdullah’s maiden budget for the financial year 2025-26 reflects a delicate balance between welfare measures and fiscal prudence. With a total outlay of Rs 1,12,310 crore, the budget is slightly lower than the current fiscal year’s allocation, signalling a cautious approach in light of the region’s financial constraints. The budget introduces several welfare schemes aimed at uplifting the most vulnerable sections of society. Providing 200 free electricity units per month to AAY families, integrated with the PM Suryaghar Bijli Yojana, is a significant step towards reducing energy poverty and promoting renewable energy. This initiative, coupled with free rations for AAY beneficiaries and enhanced pensions for the elderly, widows, and specially-abled individuals, underscores the government’s commitment to social security.
The marriage assistance for AAY girls from Rs 50,000 to Rs 75,000 and the launch of the Lakhpati Didi Scheme for women entrepreneurs are also progressive measures that will empower women and promote gender equality. The decision to offer free rides for women on government-owned transport, including e-buses, is a bold move that will not only ease financial burdens but also enhance access to education and employment opportunities. Similarly, the establishment of 11 new Shakti Sadans for women in distress is a much-needed initiative to address gender-based violence and provide rehabilitation services. These measures, if implemented effectively, could significantly improve the quality of life for J&K’s most marginalised communities.
The budget’s emphasis on infrastructure development and economic growth is evident in its allocation for key sectors such as power, tourism, and education. The proposed hydropower policy, aimed at harnessing J&K’s vast hydro potential of 20,000 MW, is a visionary step towards achieving energy self-sufficiency and transforming the region into a power exporter. The allocation of Rs 2,021.37 crore for the power sector, along with the focus on smart metering and loss reduction, reflects the government’s determination to address long-standing inefficiencies in the sector.
Tourism, a cornerstone of J&K’s economy, has also received due attention. The SPREAD initiative to develop alternative tourist destinations and the eco-tourism policy to tackle waste management challenges are timely interventions. With tourist footfalls reaching a record 2.36 crore in 2024, these measures will help sustain the sector’s growth.
The 2025-26 budget for Jammu and Kashmir aims to boost industrial growth through entrepreneurship, infrastructure, and sustainability. Key measures include Rs 50 crore for startups and a new MSME policy favouring local businesses. Skill development initiatives, tourism-linked projects, and green missions will spur related industries. Fiscal reforms, such as reduced stamp duty and digital tracking, improve ease of doing business.
In the education sector, 40 higher secondary schools are proposed to be upgraded into integrated K-12 institutions. These initiatives, along with the introduction of four-year undergraduate programs and the proposed National Law University, will enhance access to quality education and skill development, preparing the youth for the challenges of the 21st century.
While the budget’s welfare and development measures are laudable, they come with significant fiscal challenges. The reduction in petrol and diesel rebates, along with the proposed increase in aviation turbine fuel tax, may lead to higher fuel prices, impacting both consumers and businesses. The introduction of new levies on non-transport vehicles purchased outside J&K is another measure aimed at boosting revenue.
The budget’s reliance on central assistance and borrowing to meet its expenditure needs is a cause for concern. With public debt rising to 52% of GSDP in 2023-24, the government must tread carefully to avoid a debt trap. The proposed reduction in fiscal deficit from 5.5% in 2024-25 to 3% in 2025-26 is an ambitious target that will require stringent fiscal discipline and efficient revenue mobilisation.
The budget for 2025-26 aims to address the region’s socio-economic challenges while laying the foundation for sustainable growth. However, the budget also highlights the region’s fiscal vulnerabilities and the need for prudent financial management. The ultimate aim is to strike a delicate balance between ambitious development goals and fiscal sustainability.
Follow our WhatsApp channel
