FM presents Rs 1.18 lakh Cr J&K budget for FY 2024-25

Jammu, July 23: With a projected GDP growth of 7.5 percent over the previous year, the Union Finance Minister Nirmala Sitharaman Tuesday presented Jammu and Kashmir budget of Rs 1,18,390 Cr, including revenue expenditure of Rs 81,486 Cr and capital expenditure of Rs 36,904 Cr, for the Financial Year (FY) 2024-25 in the Parliament.

In the (likely) election-year J&K budget, which was presented immediately after the Union budget, the Finance Minister estimated a fiscal deficit of 3.0 percent for FY 2024-25, which was substantially lower than 5.3 percent in 2023-24 (Revised Estimates). According to her, this decrease had been possible due to the special financial assistance from the central government.

“The tax/GDP ratio is projected at 7.91 percent for 2024-25 which is higher than the previous year of 6.56 percent. GDP for the year 2024-25 has been projected at Rs 2,63,399 Cr which shows a growth of 7.5 percent over the previous year,” Sitharaman mentioned, while giving an overview of fiscal indicators.

The Appropriation Bill on the Regular Budget for 2024-25 will be considered by the Lok Sabha and Rajya Sabha in this regard.

WHAT J&K BUDGET 2024-25 CONTAINS

In J&K Budget for 2024-25, the total gross receipts are estimated at Rs 1,51,526 Cr, including the provision for ways and means advances and over-draft of Rs 33,136 Cr. Given these receipts, the total gross expenditure is estimated to be Rs 1,51,526 Cr.

The total net budget estimates for the fiscal 2024-25 are Rs 1,18,390 Cr, excluding the provision for ways and means advances and overdraft.

The expected revenue receipts are Rs 98,719 Cr and capital receipts are Rs 19,671 Cr. The own revenues both tax (18 percent) and non-tax (8 percent) are estimated to be Rs 30,586 Cr while borrowings and ARM/Asset Monetization to constitute 17 percent and 1 percent respectively.

In addition to this, Rs 42,278 Cr is to flow as central assistance (46 percent) and Rs 12,502 Cr (10 percent) as CSS/ PMDP to the Union Territory of Jammu and Kashmir.

HOW MUCH IS TO BE SPENT WHERE

Thirty-one percent will be spent as capital expenditure; twenty-five percent on salaries; twelve percent on pensions; eight percent on power purchases; nine percent on interests and fifteen percent on others.

PROVISIONS FOR ONGOING MAJOR INITIATIVES

The budget of Jammu and Kashmir for 2024-25 makes provisions for the ongoing initiatives for infrastructure development, sustainable agriculture, new industrial estate, PRI level works, employment generation, developing tourism, and social inclusion.

IMPROVING FISCAL SITUATION

While analysing the fiscal situation of Jammu and Kashmir, the Finance Minister said that due to historical challenges in financial management, it had a legacy of very high fiscal stress.

“This is aggravated by the committed nature of the major expenditures not supported by proportionate increase in its revenues. Its dependence on central grant is to the tune of around 70 percent of its total expenditure. The perpetual fiscal stress leads to frequent use of ways and means advances and overdraft,” she said.

CORRECTING HISTORICAL ABERRATION

Sitharaman said that this year the Government of India decided to correct this historical aberration by providing adequate financial support to Jammu and Kashmir coupled with reforms to come out of the perpetual fiscal stress. “To correct the complex fiscal issues of Jammu and Kashmir, a special central assistance of Rs 17,000 Cr has been worked out. It is observed that around 11 percent of the budget of Jammu and Kashmir is used for Police. Such expenses on policing being unavoidable, leaves limited space for spending on development and welfare projects,” she stated.

“The Union Government has agreed to provide for the salary, pension and other costs of Jammu and Kashmir Police for which an allocation of Rs 12,000 Cr has been made in the annual budget. In addition, a lump sum special grant of Rs 5,000 Cr as additional central assistance is being provided in the current financial year. As a result of this Rs. 17,000 Cr of special package, the fiscal deficit to GDP ratio of Jammu and Kashmir will reduce to 3.0 percent in the financial year 2024-25,” Finance Minister stated.

This special package will be part of the overall central assistance which is estimated at Rs 67,133 Cr during 2024-25.

This unprecedented assistance would lead to complete improvement in fiscal position enabling the Government of Jammu & Kashmir to work towards fulfilling the developmental needs and aspirations of the people, while maintaining stable fiscal health, she added.

UNPRECEDENTED DEVELOPMENT SINCE AUGUST 2019

The Finance Minister, in her budget speech mentioned that Jammu and Kashmir had witnessed unprecedented socio-economic development since the historic reforms initiated in August, 2019. Triggered by these reforms, the Union Territory government pursued the path of accelerated and inclusive growth to fulfill the aspirations of common man.

“Since 2019, the entire region has witnessed an era of peace, progress and prosperity. Life has returned to normalcy in Jammu and Kashmir after over three decades of turmoil. Schools, colleges, universities, hospitals and other public institutions are functioning efficiently without any strikes or any kind of disturbances during the last four years.”

OVERWHELMING PARTICIPATION IN LS POLLS

She stated that the earlier practice of daily hartals, strikes, stone pelting and bandhs were things of the past. “This has also enabled its citizens to discover their untapped potential, address the aspirations of the young generation and contribute wholeheartedly in the development journey. The people of Jammu and 40 Kashmir participated enthusiastically in the recently held Lok Sabha elections. The record voter turnout is testimony to the meticulous and impartial conduct of elections, the robust democratic spirit and civic engagement of the people as also to the success of the reforms initiated in the year 2019. Unprecedented participation by the people of Jammu and Kashmir in the democratic exercise during the Parliament Elections is a clear indication that after decades of turmoil, the people are witnessing a positive and conducive environment to achieve their aspirations,” Sitharaman asserted.

J&K ON RIGHT TRAJECTORY

She exuded confidence that Jammu and Kashmir was on a right trajectory and would emerge as one of the most developed regions and would contribute immensely to our Prime Minister Narendra Modi's vision of Viksit Bharat.

COMMITTED TO DISMANTLE TERROR ECOSYSTEM

The Finance Minister said that the Union Territory government remained committed to dismantling the terror sponsoring ecosystem. “The policy of zero tolerance has been adopted against terrorism and security forces have foiled the repeated efforts of those sponsoring proxy wars. The unstinted efforts and sacrifice of security forces have only boosted the confidence and resolve of our society to remain united, courageous and disciplined to fight against those who are promoting terrorism,” she said.

FOCUS ON LAW AND ORDER SITUATION

The Finance Minister said that while fighting the terrorism, the government also focused on improving the overall law and order situation in Jammu and Kashmir. The defining characteristic of the security situation in Jammu and Kashmir, which had a direct bearing on day-to-day life of common citizens, was ‘street violence’ which was a methodical and regular phenomenon pre-2019.

“The street violence, engineered and orchestrated by terrorists and secessionist networks is now a thing of the past. Students are happy as there are no more school closures, businessmen are happy as there are no more bandhs and hartals, youngsters are happy as peace is bringing lots of economic opportunities, mothers are happy as their children are safe now, citizens are happy that all services like hospitals, public transport, civic services etc. are within their reach now. This harmonious law and order situation has helped the government to initiate and implement socio-economic development,” she pointed out.

J&K BANK’S SUCCESS STORY

The Finance Minister stated that the complete turnaround of Jammu and Kashmir Bank post 2019 was a success story. “The Union Territory government being the promoter of the Jammu and Kashmir Bank has endeavoured to improve its capital adequacy and corporate governance. The Union Territory government facilitated the reforms to limit concentration of power, professionalization of management and induction of professional experts in the Board. When the Bank suffered losses due to the financial indiscipline and the consequent high NPAs, the Union Territory government reinforced the Bank by infusing substantial equity capital over 2019 to 2022,” she said.

These steps facilitated transformation of the Bank’s financial health and enabled its business growth and transition out of losses of the pre-2019 period. The success of reforms facilitated by the government was exemplified in the business results of the Bank and its turn- around in the last five years, the Finance Minister said.

She said, “The Government of Jammu and Kashmir is working on the mantra of “Reform, Perform and Transform”. This has led to several path-breaking initiatives to unlock economic and industrial potential, improve quality of life, promote social and financial inclusion, fortify law and order machinery, decentralize governance systems, improve efficiency and transparency of public expenditure, upscale revenue generation, minimize wasteful expenditure, and step-up infrastructure development.”

EMPLOYMENT

Regarding employment, she said that the government had conceived a pioneering initiative ‘Mission Youth’ to transform youth of Jammu and Kashmir into ambassadors of peace and development through structured systematic interventions in the domains of livelihood generation, education and skill development, counselling, sports and recreation.

Under the Mission Youth initiatives of Mumkin, Tejaswani, and Spurring Entrepreneur 50 programme, financial assistance was being provided to large number of youth and women entrepreneurs, she mentioned.

“We also launched a massive recruitment drive. Since August 2019, a total 38,384 persons were recruited in the government sector in a fair, merit based, transparent, and expeditious manner. To secure the future of workers in the unorganized sector, more than 34 lakh labourers have been registered on the e-Shram portal. A total of 7.66 lakh self-employment or livelihood opportunities generated or strengthened since the year 2021-22, till date,” she said.

IMPROVING TRANSPARENCY, EFFICIENCY IN GOVERNANCE

Sitharaman said that the government adopted General Financial Rules to ensure discipline in approval, bidding and execution processes. IT reforms were initiated to streamline financial management by ensuring work-wise allocation of funds through BEAMS (Budget, Estimation, Allocation and Monitoring System) platform.

“We universalized procurement of goods and services through Government e-Market Place (GEM) to enable competitive and cost-efficient purchases. The Union Territory government received the Gold medal for its major progress in GEM based procurement. The government ushered transparency in land administration through ‘Aapki Zameen Aapki Nigrani’ portal which enables online access to land records. Registration of land revenue documents was made online to boost citizen convenience and revenues,” she stated.

Giving an account of Direct Benefit Transfer, the Finance Minister said that more than Rs 6,000 Cr was seamlessly disbursed to over 70.46 lakh beneficiaries through over 50 Direct Benefit Transfer (DBT) based welfare schemes (both cash and kind) by March, 2024. “Jammu and Kashmir recorded 74 crore 42 lakh e-transactions in 2023-24, averaging over 20 lakh electronic transactions registered daily, which is higher than many states,” she said.

This was the fifth consecutive budget of J&K presented by the Union Finance Minister in the Parliament in the absence of the Legislative Assembly here.

On February 5, 2025, she had presented Rs 59,634 Cr interim budget in view of Lok Sabha polls.

Later, in the evening, J&K government spokesperson said that the Finance Department of the UT government had drafted the regular budget for the current year.

For this, the Department had assessed the revenue receipts of the UT Government from GST, motor spirit tax, excise, and stamp duty. Further, the non-tax revenue from electricity and water supply, mining royalty, timber sales, annual rent from industrial lands, etc were also examined. The own revenue of the UT Government has been estimated at Rs. 21,860crore.

A detailed analysis of the fiscal situation of Jammu and Kashmir was carried out by the Finance Department to address the legacy challenges which included high staff strength, low revenue base, and high debt load. The high fiscal stress caused by the committed nature of the major expenditures increased the UT’s dependence on central grants.

“To address these challenges, the UT government increased tax and non-tax revenues through improved GST return compliance, improved billing and collection efficiency, increased dealer registration, and transparent excise auctions,” the government spokesperson said.

According to him, all administrative departments also intensified efforts to harness central funds by enhancing execution speed. This led to a sharp increase in receipts of funds under centrally sponsored schemes. During the last financial year, the UT government also stringently enforced borrowing limits and curtailed the culture of overdraft. With close monitoring of public debt, the UT government was successful in tapering down the off-budget borrowings. “The government has restrained revenue expenditure through austerity measures and biometric verification of beneficiaries. The UT government also pursued the Government of India for increasing central financial assistance. Lieutenant Governor Manoj Sinha, Chief Secretary, Atal Dulloo and Principal Secretary Finance, Santosh Vaidya led the UT’s efforts in this direction,” the spokesperson mentioned.

Crucial meetings were held in June and July 2024 in the Ministry of Home Affairs and Ministry of Finance to review these demands of the UT Government.

“Union Home Minister and Union Finance Minister personally reviewed the fiscal management of the UT government in recent months. Considering the challenges faced and the strenuous efforts made by the UT government, Government of India has agreed to provide special financial support to Jammu and Kashmir coupled with reforms to come out of the fiscal stress,” he added.

According to the spokesperson, during preparation of the interim budget proposals, consultations were held with all the departments and various stakeholders to provide for ongoing initiatives and arrive at realistic budgetary numbers.

For finalizing expenditure proposals, assessment of financing needs of infrastructure projects, social and economic measures undertaken by departments was undertaken.

The budgetary exercise focussed on the imperative of advancing the cause of the greater collective good within the realistically realizable resources.

MAJOR OUTLAYS UNDER J&K BUDGET 2024-25

Rs 9400 Cr for subsidy and budgetary support for purchase of power from the National grid and the Power purchase agreements with power generation companies.

Rs 3983 Cr for Construction of roads and bridges under PMGSY, CRIF, NABARD loan schemes and Bridge scheme.

Rs 1875 Cr for rejuvenating school education infrastructure and services through funding of Samagra Shiksha Abhiyan (SSA), career counselling services, and setting up of modern schools for quality education with PM SHRI funding

Rs 1808 Cr for strengthening decentralized governance by providing for local area development works of PRIs, ULBs, BDCs and DDCs.

Rs 1714 Cr provisioned for tap-water connectivity for rural areas under Jal Jeevan Mission.

Rs 1484 Cr for completion of Smart City projects in Srinagar and Jammu cities, construction of infrastructure projects under Jhelum Tawi Flood Recovery Project (JTFRP), construction of sewerage treatment plants in urban areas, and development of new townships for housing.

Rs 1430 Cr for comprehensive social security coverage under assistance schemes for Old Age, Widow, and Disabled, and for the women empowerment interventions of Ladli Beti and Marriage Assistance schemes.

Rs 1317 Cr for strengthening infrastructure and services in the health sector under National Health Mission mechanism.

Rs 1104 Cr for construction of own houses of houseless poor families in rural areas with PM Awas Yojana- Gramin support

Rs 1068 Cr for Provision for salaries, food grains, cash assistance for Kashmiri migrants and construction of transit accommodation for Kashmiri migrant employees.

Rs 1021 Cr for transforming agriculture and allied sectors of the UT through the Holistic Agriculture Development Programme (HADP), with the five-year outlay of Rs 5013 Cr, including provisions for IFAD funded J&K Comprehensive Investment Plan (JKCIP) and development of cold storage and high-density plantation.

Rs 923 Cr for development and upgradation of Industrial Estates, for providing GST refund incentive and incentives as per the Industrial Policy for industrial units, promotion of trade through JKTPO’s events for boosting investment and employment

Rs 776 Cr for equity support for the hydro electric projects at Ratle, Kwar, and Kiru, which would provide stable revenue source and cheaper power.

Rs 586 Cr for Universal health insurance coverage for all families of Jammu & Kashmir.

Rs 500 Cr for providing drugs, machinery and equipment for health institutions.

Rs 475 Cr for upgradation infrastructure of colleges and universities and for rollout of the National Education Policy.

Rs 518 Cr for promotion of Tourism, development of new tourism destinations and new circuits, construction of ropeways, conduct of Shri Amarnath Ji Yatra and film festival and promotion policy.

Rs 445 Cr for improving sanitation and waste disposal facilities, IHHLs, CSCs and achieving ODF status in the rural areas.

Rs 390 Cr for flood management projects of river Jhelum.

Rs 405 Cr for schemes for self-employment, Start-ups, Seed Capital Fund, implementation of Mission Youth schemes, and support to self-help groups for generation livelihoods.

Rs 179 Cr for construction of security related infrastructure, police housing colonies, bunkers in border areas and installation of CCTVs in police stations.

Rs 150 Cr for installation of solar rooftops and solar pumps; Rs 335 Cr for creation of sports infrastructure, heritage preservation, promotion of festivals and theatre and development of Infrastructure and initiatives for welfare of Tribals, like tribal hostels, milk villages, nomad shelters, etc.

Rs 100 Cr for Capital support for revitalization of Regional Rural Banks (RRBs) and Cooperative Banks.

Rs 500 Cr for MGNREGA works at Gram Panchayat level; Rs 401 Cr for development of Dal lake, afforestation, wildlife management, and preservation of protected areas.