Slipshod and Shoddy
Omar Abdullah’s second budget lacks three things: correct figures, good economics and bold politics. The first one stems from a lack of respect for the legislature. The second from a lack of understanding of public finance and the third from a lack of a will to do what has been promised.
Budgets, with all its components -- revenues, expenditures, grants, borrowings, deficits – are ultimately only about economic growth and the corresponding welfare of the people. It is therefore expected that all these elements will be consistent with the overall projection of economic growth measured by the rate of growth in Gross State Domestic Product (GSDP). The Budget for 2026-27 fails on this account. Here is how contradictory and conflicting the estimates of economic growth are in the budget and associated documents.
From a reading of the Economic Survey 2026, tabled in the house a day before the Budget was presented, the biggest concern that emanates is slow growth of the economy. According to the Economic Survey, “The Union Territory is estimated to achieve a CAGR of 4.47 per cent in real GSDP during 2019-20 to 2024-25.” This is low by any standards, national or J&K’s own growth record. Indeed, this is the first official indictment of the economic performance of J&K as a Union Territory under the watch of the Union government.
Yet, oblivious to what the Economic Survey of his own government has stated, Chief Minister and Minister of Finance Omar Abdullah is “happy that the fiscal consolidation measures, the persistent implementation of reforms and the strategic capital investments are accelerating our economy” (Budget Speech, Para 15, Page 8).
Fiscal deficit, the primary index of fiscal consolidation, at 4.08 per cent of GSDP in 2024-25 (pre-actuals, so it could be higher) is in the same range as it was in 2012-13. After having promised consolidation last year by budgeting it to be 2.98 per cent, it has been revised upwards to 3.69 per cent; a slippage of 71 basis points. And lo and behold, amongst claims of fiscal consolidation the fiscal deficit for 2026-27 has been budgeted at 3.69 per cent, higher than the budget as well as the revised estimates of the current fiscal year. This is fiscal slippage.
As regards the “strategic capital investments”, the size, scale and sector of these which have fuelled the non-existing spur in the growth rate have not been identified. Whatever data has been presented on capital investments shows a decline compared to the past. The rate of capital investment stands at 8.25 percent in 2024-25 (2025-26 and 2026-27 are projections) compared to 9.75 in 2017-18 (Source: Graph 9, page 26, Budget at a Glance, 2026-27).
What is more shocking, however, is that even the economic growth numbers that the finance minister has been made to read out in his speech are at variance with the official estimates put out by his own government in the Budget at a Glance as well as the Economic Survey. This impairs the integrity of the budgetary numbers and the sanctity of the Budget; a new low in the budgetary history of J&K.
His statement that the “J&K economy is estimated to grow at 11 per cent, driven by our sustained initiatives and strategic policy initiatives,” (Para 15, page 8) is not borne out by data published in either the Budget at a Glance or the Economic Survey.
In the Budget at a Glance, an accompanying document of the Budget speech, estimates the growth to be only 7.5 per cent. (Graph 2, Page 3). Worse still, even the absolute numbers of the GDP don’t match. For example, in the speech, the GSDP in 2023-24 is estimated to be Rs 2,36,059 crore, the Budget at a Glance reports it to be Rs 2,25,022 crore; a difference of almost Rs 9,000 crore! This is unprecedented.
But this is not the end of it. The Economic Survey estimates the size of the economy at Rs.2.86 lakh crore in nominal terms and 1.50 lakh crore in real terms. As against this, the finance minister has stated that the size of the economy is 2,88,422 crores up from 2,62,458 crore last year, a nominal growth of 9.89 per cent.
According to the Survey, in 2025-26, the economy is estimated to grow to Rs 2.86 lakh crores which is at variance with both the number given in the Speech as well as the Budget at a Glance. There is a gap of Rs 2000 crores. These are not small differences and can potentially change the entire fiscal balance because they imply different growth trajectories and send all the fiscal numbers, especially fiscal deficit as a percentage of GSDP, for a toss. Depending on which number is correct, even the required stipulations under the Fiscal Responsibility and Budgetary Management may not be met.
Ironically, both the Planning Department which produces the Economic Survey and the Finance Department which draws up the budget are both with the Chief Minister who is also the finance minister.
The inconsistencies in the budgetary numbers can be dismissed as clerical errors. But what about the macroeconomics underlying the budget? If the economy is set to grow at 9.5 percent in 2026-27, why are the Own Revenues budgeted to be a staggering Rs 7,558 crores lower than the budget estimates of last year? And Rs 894 crores lower than the revised estimates too. This kind of estimation flies in the face of established macroeconomic relationships which suggest that a higher growth will result in higher revenues. A reduction in the tax rates should get compensated by a higher growth rate because the elasticity of taxes is lower than tax buoyancy.
It is here that the point about bold politics mentioned at the beginning of this column comes in. Far from displaying any ambition, the budget is almost apologetic in tone and tenor. It is overburdened by the fact that the total own revenues of the UT are just Rs 31,800 crore. And that the central assistance is Rs 42,752 crore. While this is how it shows up in accounting terms simply because J&K is now a Union Territory. The fact is that the Rs 40,000 odd crore that is coming in from the Centre is the share of J&K in the central taxes. It is not a grant but an entitlement. A little-known fact is that J&K contributes close to Rs 3,000 crore in direct tax and almost 7 per cent of GSDP is collected in the form of indirect taxes. The fact that J&K is now a UT doesn’t negate the fact of its contribution to the national kitty.
All these technicalities aside, it is perhaps the Urdu couplet that Omar Abdullah started his speech with, “Safar Taveel Hai, Bojh Bhi Bhaari Hai. Par Har Surat, Yeh Safar Jaari Hai” which sums up the mindset of the government. To see responsibility as a burden doesn’t speak well of leadership and passion of purpose. It posits that framing duties—such as fiscal management, regional development, or navigating federal relations—as burdensome reveals an underlying fragility in mindset, rather than the robust, unyielding resolve required for advancing Kashmir’s interests. It implies a defeatist or reactive approach, where obstacles like economic deficits, security concerns, or infrastructural lags are internalized as oppressive weights that sap motivation. In contrast, a “strong political commitment to the cause of Jammu and Kashmir” would reframe those same responsibilities as intrinsic to the mission -- opportunities for empowerment, self-reliance, and historical rectification.
Author, former Finance Minister, J&K, is Contributing Editor of Greater Kashmir.
