Salaries, pensions, interest, power purchases consume 51% of J&K's Budget

Srinagar, Mar 7: In a stark reflection of its financial challenges, the Jammu and Kashmir government has presented a budget for the fiscal year 2025-26 totalilng a remarkable `1.12 lakh crore. However, more than half of this budget is earmarked for essential expenditure categories that continue to constrain the region's fiscal flexibility.

According to the budget projections announced by the Chief Minister on Friday, the government will allocate `23,894 crore towards employee salaries, making it the largest single expenditure category. Pensions are expected to consume another `15,300 crore, while costs associated with power purchases will reach `9,000 crore. Interest payments on borrowings are projected to add `11,518 crore to the expenditure list. Collectively, these four financial obligations represent over 51 per cent of Jammu and Kashmir's overall budget.

The budget breakdown reveals that salaries alone account for 21 percent of the total expenditure, while pensions represent 14 percent. The repayment of interest on loans constitutes 10 percent, with power purchases making up 6 percent. Together, these figures indicate that salaries and pensions have become significant drains on public finances, consuming over 35 percent of the annual budget solely from these two categories.

Interestingly, revenue receipts from power purchases are estimated to exceed `4,000 crore, yet the expenditure on buying power remains a significant strain, necessitating scrutiny and potential reform in the sector to alleviate budget pressures.

The persistently high levels of spending on fixed obligations such as salaries and pensions raise concerns about the sustainability of public finances in Jammu and Kashmir. The situation demands increased attention and strategic planning from policymakers to ensure that essential services and development initiatives are not adversely affected by the escalating burden of fixed costs.

As the region grapples with these financial realities, the government is urged to explore innovative solutions, including increasing revenue generation, improving fiscal management, and reforming existing financial structures to enhance efficiency. The ongoing reliance on central government funding and the need for significant structural reform remain key topics for discussion among stakeholders in the region as they work towards a more sustainable financial future.