J&K Budget 2025-26: Important Points, Key Takeaways and PDF Download

Updated On: March 7, 2025

Jammu and Kashmir Chief Minister Omar Abdullah presented the Union Territory’s budget for 2025-26, marking the first comprehensive financial plan in seven year. Chief Minister Omar Abdullah, who also holds the Finance portfolio, has unveild the budget on March 7, 2025, with a strong focus on economic growth, employment generation, and regional development. Abdullah emphasized that the improved economic environment has propelled J&K’s financial growth, with the Gross State Value Added (GSVA) increasing from ₹1,64,103 crore in 2019-20 to ₹2,45,022 crore in 2023-24.

With an allocation of ₹1.12 lakh crore, the budget is designed to stimulate economic expansion and reflect the aspirations of the people. Abdullah emphasized that the improved economic environment has propelled J&K’s financial growth, with the Gross State Value Added (GSVA) increasing from ₹1,64,103 crore in 2019-20 to ₹2,45,022 crore in 2023-24.

Economic Growth and Fiscal Management

CM Omar Abdullah emphasized that Jammu and Kashmir is on the path to lasting peace, with improved financial discipline and enhanced GST compliance. The budget prioritizes youth empowerment, women’s welfare, and economic sustainability, while also addressing regional disparities. The government aims to align with the Sustainable Development Goals (SDG), ensuring balanced economic and social growth.

Agriculture and Employment Boost

A significant allocation of Rs 815 crore has been made for the agriculture sector, expected to generate 2.88 lakh new jobs. The government will promote a two-crop pattern, expand horticulture, and support industries like wool processing and leather tanning to strengthen the local economy. These measures will enhance farmers’ incomes and create new employment opportunities.

Economic Growth and Sectoral Contributions

For the fiscal year 2024-25, the economic structure is projected to be:

Primary Sector: 20% of GSVA
Secondary Sector: 18.30% of GSVA
Tertiary Sector: 61.70% of GSVA

These figures highlight the resilience of J&K’s economy, which continues to perform strongly despite geographical constraints and prolonged periods of instability. Abdullah reaffirmed his vision for J&K to become a leading region in India’s economic development by 2047.

Boosting Hydropower Development

The government plans to introduce a new hydropower policy to unlock the full potential of 20,000 MW, driving private investments and accelerating energy generation. The Chief Minister stressed that reforms in metering, billing, and revenue collection are underway to strengthen the power sector.

For the 2025-26 financial year, an estimated ₹2,021.37 crore has been allocated to the power sector, a substantial rise from ₹762.80 crore in 2024-25. The government aims to make Jammu and Kashmir an energy hub, achieving self-sufficiency and becoming a net power exporter by 2027-28.

Key Hydropower Projects in the Pipeline

To bridge the gap in energy production, several major projects will be expedited:

Pakal Dul, Kiru, Kwar, and Ratle: Expected to generate 3,000 MW by 2027.
Upcoming projects: Kirthai-I, Dulhasti-II, Bursar, Sawalkote, Uri-I Stage-II, Ujh, and Kirthai-II will contribute an additional 4,500 MW within a decade.

These initiatives will position J&K as a power-surplus region, reducing energy dependence and ensuring uninterrupted electricity supply.

Addressing Financial Challenges in the Power Sector

Efforts to reduce Aggregate Technical & Commercial (AT&C) losses have shown positive results. Under-recovery of revenue has decreased from ₹6,552 crore in 2022-23 to ₹5,244 crore in 2023-24, with a targeted drop to ₹4,200 crore in 2024-25. Measures such as smart metering, online billing, and aerial bunched cables have been implemented to improve revenue collection and reduce financial losses.

Fiscal Strategy and Tax Reforms

To ensure fiscal stability, the government has proposed adjustments in taxation:

Petrol rebate reduced by ₹1 per litre
High-Speed Diesel (HSD) rebate reduced by ₹2 per litre
Aviation turbine fuel tax increased to 5%

Additionally, Abdullah addressed tax revenue losses due to vehicle purchases from outside J&K. To curb this issue:

A 12% road and token tax will be levied on non-transport vehicles purchased outside J&K but sold by authorized local dealerships.
A 3% green cess will be added to such vehicles, promoting environmental responsibility.

Tourism Development: A Key Growth Engine

Tourism remains a vital pillar of J&K’s economic strategy, with a projected 2.36 crore tourists expected in 2024. The budget allocates Rs 390.20 crore for tourism development, focusing on:

Increasing homestay facilities to boost rural tourism.
Expanding water sports activities.
Developing Sonmarg as a winter sports hub.
Constructing a new water park in Sidhra.
Establishing Basholi as an adventure tourism destination.

Recent events like the Kashmir Marathon, which attracted 1,800 global participants, have significantly boosted the state’s tourism appeal. Enhanced infrastructure and innovative tourism initiatives will further strengthen J&K’s position as a top travel destination.

Industrial Growth and Local Businesses

The budget introduces a comprehensive industrial expansion plan, including the development of 64 industrial estates. Key initiatives include:

A new policy offering price preferences for traders.
Promotion of Pashmina and other local handicrafts.
GI tagging for seven additional local products, boosting market recognition.

These measures aim to increase investment, generate employment, and support small businesses across the region.

Healthcare Advancements

To improve healthcare access and infrastructure, the budget includes provisions for:

Two new AIIMS institutions.
Ten fully-equipped nursing colleges.
Rs 5 lakh health insurance coverage for all citizens.
Expansion of telemedicine services across J&K.
Establishment of three new Cath Labs.
Installation of MRI machines in all government hospitals.
Dialysis services to be available in all district hospitals.

These initiatives will significantly enhance healthcare accessibility and quality, ensuring better medical facilities for the people of Jammu and Kashmir.

Welfare Initiatives and Social Support

The government has introduced several welfare measures to support vulnerable communities:

200 units of free electricity for families under the Antyodaya Anna Yojana (AAY).
Free public transport for women on all government-operated buses starting April 1.
10 kg of free ration per month for AAY beneficiaries.
Marriage assistance increased from Rs 50,000 to Rs 75,000 for girls under AAY.
200 new e-buses to be introduced in Srinagar and Jammu to improve public transport.

These steps reflect the government’s dedication to social welfare, women’s empowerment, and public convenience.

Fiscal Challenges and Budgetary Allocations

A major concern in the budget is that 70% of funds are allocated towards salaries, placing pressure on the state’s finances. Additionally, the government faces high Administrative, Technical, and Non-Commercial (ATNC) losses and increasing state debt. However, all borrowing remains within prescribed financial limits, ensuring fiscal discipline and responsible spending.

The budget also includes a Rs 5,000 crore grant to accelerate regional development projects.

Infrastructure and Governance Reforms

To enhance local governance and infrastructure, the government plans to:

Construct 500 new Panchayat Ghars to strengthen grassroots governance.
Implement a new film policy to position J&K as a prime film production hub.
Promote eco-tourism to leverage the state’s rich natural heritage.
National Law University (NLU) will be established in Jammu & Kashmir, making it the 28th NLU in the country. The budget has allocated ₹50 crore for its development. This long-awaited initiative aims to align legal education in the region with national standards.

During his budget speech, CM Omar Abdullah expressed gratitude to the Prime Minister, Home Minister, and Finance Minister for their continued support. The budget aims to drive economic prosperity, job creation, and sustainable development, ensuring that Jammu and Kashmir remains on the path of peace and progress.

With a strong emphasis on infrastructure, tourism, industry, and social welfare, the Jammu and Kashmir Budget 2025-26 sets the stage for a transformative future, fostering growth, inclusivity, and economic resilience.

Here is the full budget speech: Click here for J&K Budget 2025-26: Full speech here