Dr. Pabitra Kumar Jena
pabitrakumarjena@gmail.com
Amidst Global uncertainty and Geopolitical tension, Finance Minister of Jammu & Kashmir Omar Abdullah presented the State budget on 6th February 2026. This budget is long-term, growth-oriented, and stable to withstand shocks and sustain high growth. This budget has maintained a balance between economic growth and fiscal prudence through reforms in agriculture growth, tourism development, youth employment, women’s employment, balanced regional development, infrastructure investment, changing the education landscape, and health expenditure. Total budgetary expenditure has been allocated at Rs 1,13, 767 crore in FY2026-27 over the RE of Rs 1,11,376 crore in FY 2025-26. This consists of Rs 80,640 Crore and Rs 33,127 Crore for Revenue Expenditure and Capital Expenditure, respectively, under Budget Estimates 2026-27. Further, Rs 90,018 Crore and Rs 23,749 Crore are estimated to be received as Revenue Receipt and Capital Receipt, respectively, under Budget Estimates 2026-27. Finance Minister Omar Abdullah, in his budget speech, described that the GDP growth rate would be 9.5% for FY 2026-27 against 7.5 in FY2025-26, which is above the national average, which is around 7-7.4% predicted for the coming financial year. Fiscal deficit predicted at 3.69 % for FY2026-27 against RE of 3.63 % in FY2025-26. Tax to GDP ratio was 7.5% in FY2025-26, whereas in 2026-27, it is projected that the ratio of tax to GDP will be 6.6%.
Finance Minister of Jammu & Kashmir Omar Abdullah, in his budget speech, informed that, with the implementation of the Special Assistance to States for Capital Investment (SASCI) Scheme this year, Jammu and Kashmir became eligible for financial assistance. To support capital investments and infrastructure projects, the SASCI program provides interest-free loans for a period of 50 years. From the current financial year, the government will take advantage of the programme for the inclusive development of the Jammu & Kashmir economy.
The Agriculture and Allied sectors have been allocated a total of Rs 1,878 crore for the fiscal year 2026-27 under the category of capital expenditure to carry out a variety of reforms. These include the expansion of cold storage and warehousing facilities, the promotion of micro and sprinkler irrigation, and the support for medicinal plant cultivation. Additionally, crop insurance is available for apple, saffron, mango, and litchi. In 2026-27, the Rural sector has been allocated Rs 3,456 crore under capital expenditure, which represents a Rs 40 crore increase from the revised allocation for 2025-26. These reforms indicate the JK e-Pathshala DTH channels for Classes 1-12. Modernization of anganwadi centers, Priority hiring of local youth in subsidised industries and indoor sports facilities in government institutions.
As part of the capital expenditure for the fiscal year 2026-27, the Tourism and Youth Affairs sector has been allotted Rs 472 crore. This represents a significant increase of Rs 61 crore compared to the revised allocation for the fiscal year 2025-26. As part of this sector, allocations are made with the purpose of constructing a tourism economy that is equitable and environment friendly. This involves striking a balance between the development of infrastructure, the preservation of the environment, and the engagement of the community. The Social Welfare sector has been assigned a total of Rs 170 crore as part of the capital expenditure budget for the fiscal year 2026-27. The aim of these allocations is to provide full fee waivers for economically disadvantaged students from the ninth grade onward to college, six free LPG cylinders for households that are eligible, and monthly financial help for financially disadvantaged orphan children. There are scholarships available for students from tribal areas, and the government provides free transportation for people with disabilities.
For the fiscal year 2026-27, the Housing and Urban Development sector has been allotted a total of Rs 2,809 crore for capital expenditure. This reflects a significant increase of Rs 791 crore over the revised allocation for the fiscal year 2025-26. Sites in Srinagar and Jammu have been designated for mass housing colonies that will be self-financing or public-private partnership (PPP) in order to meet the rapidly expanding need for housing. In order to improve the urban infrastructure, expenditures are being made in areas such as parking lots, bus stops, urban roadways, wastewater and drainage networks. For the fiscal year 2026-27, the allocation of Rs 109 crore has been made for the Information Technology sector for capital expenditure. This signifies a substantial increase of Rs 36 crore as compared to the revised provision for the fiscal year 2025-26. Through the successful completion of a re-engineering effort, the workflows will be simplified, and the efficiency of online services will be enhanced all at the same time. In his budget speech, he has revealed that his government plans to improve the administrative capacity of Jammu and Kashmir, as well as to modernize the civil services, ensure effective recruiting, and increase the institutional infrastructure. He proposed that the recruitment process be sped up for 23,800 additional jobs, which would include 2,800 gazetted jobs, 14,000 non-gazetted jobs, and 7,000 Class IV posts. This would make sure that these openings are filled in a way that adheres to severe time constraints.
The region of Jammu and Kashmir is still struggling with a number of problems, one of which is a significant lack of infrastructure in certain places, such as road connections, water supply, and sanitation. In addition to this, there is also a risk to the tourism industry. For the purpose of enhancing the employment situation, there has not yet been a significant quantity of private investment brought in from the rest of the world, despite the fact that the Finance Minister Omar Abdullah has stated that his government in collaboration with central government are working toward a great deal of encouraging improvements for a stable and sustainable Jammu & Kashmir. Further, he stated that his government is committed to increasing social security for the most vulnerable members of society while simultaneously strengthening Jammu and Kashmir’s competitiveness in the national economy through grassroots-level reforms. This budget not only enhances social measures but also encourages transformative programs to accelerate infrastructure development, productivity, and economic growth. This will ensure that Jammu and Kashmir becomes more prosperous and inclusive.
(The author is Associate Professor, School of Economics, Shri Mata Vaishno Devi University, Katra, Jammu & Kashmir.)
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