J&K liabilities soar 300% in decade, hits `1.25 lakh crore

Srinagar, Mar 13: Jammu and Kashmir is grappling with a mounting debt burden that has spiraled dramatically over the past decade, with the Union Territory's total liabilities surging from approximately `42,000 crore in 2013 to an alarming `1.25 lakh crore in the 2023-24 financial year, according to the latest Economic Survey 2025.

This represents a staggering 300% increase in just twelve years, transforming what was once a manageable fiscal challenge into a full-blown debt crisis. The current debt figures, which now stand at 52 percent of J&K's Gross State Domestic Product (GSDP), paint a concerning picture of the territory's financial health and raise serious questions about long-term fiscal sustainability.

The Economic Survey 2025 provides a detailed breakdown of J&K's `1,25,205 crore of liabilities. Public debt constitutes the lion's share at `83,010 crore, representing 66 percent of total liabilities. Liabilities on account of Provident Fund have reached `26,515 crore, constituting 21 percent of the total liabilities. Other obligations amount to `14,293 crore, implying 11 percent of the total liabilities. Insurance and pension funds make up the remaining 1 percent at `1,387 crore.

Most concerning is that these liabilities now represent 52 percent of J&K's GSDP, indicating that more than half of the territory's economic output is effectively committed to debt obligations.

Financial experts warn that this rapidly accelerating debt trajectory could significantly constrain J&K's capacity for capital expenditure on crucial infrastructure and development projects. With such a substantial portion of resources now directed toward servicing existing debt, funds available for public services and growth initiatives are increasingly limited.

While at the same time,  according to the Economic Survey,  tax revenues rose from Rs 12,335.47 crores in FY23 to Rs 13,903.22 crores in FY24, which is just 10 percent of the total liabilities. Rs 10,624.09 crores already collected by the end of Q3 FY25, representing 76% of the previous year's total collection.

The Goods and Services Tax (GST) has emerged as the primary revenue generator, contributing Rs 6,527.62 crores, or 61% of the tax revenue realised in the first three-quarters of FY25. Other significant revenue sources include excise duty (14%), sales tax (12%), vehicle tax (6.5%), and stamps and land registration (4.9%).