Navneet Dubey
Jammu: The latest assessment of the finances of the Union Territory of Jammu and Kashmir for the financial year 2024–25 presents a mixed picture—moderate economic growth on one hand, and deepening structural fiscal concerns on the other.
According to the report, the UT’s economy registered a growth of 11.18 percent during 2024–25 compared to the previous year.
However, its contribution to India’s GDP stood at 0.79 percent, marking a decline from 0.85 percent recorded in 2020–21, indicating a relative slowdown in its share of the national economy.
On the revenue front, total receipts grew by 6.12 percent, largely driven by increased Grants-in-Aid from the Government of India.
While there was some improvement in the UT’s own revenue generation, growth in own tax revenue remained modest at just 2.5 percent.
The findings underscore a continued heavy dependence on central assistance, raising questions about the UT’s fiscal autonomy.
The expenditure pattern reveals a concerning imbalance. Out of the total expenditure of ₹2,82,547.28 crore, a substantial 85.37 percent was incurred as revenue expenditure.
A significant portion of this—68.39 percent of revenue expenditure and 58.39 percent of total expenditure—was absorbed by committed liabilities such as salaries, pensions, and subsidies.
This left limited fiscal space for capital expenditure, which remained below budgeted levels, reflecting constraints in infrastructure creation and long-term asset building.
The UT also failed to contain its fiscal deficit within the targets outlined in budget documents, further adding to fiscal pressures.
The debt profile has worsened notably, with outstanding liabilities rising from 8.87 percent of GSDP in 2020–21 to 17.21 percent in 2024–25.
When liabilities of the erstwhile state are included, the figure surges to 48.47 percent of GSDP. This excludes off-budget borrowings amounting to over ₹2.23 lakh crore, highlighting a potentially larger fiscal burden.
In addition, the government carried forward undischarged liabilities worth ₹2,934.02 crore during the fiscal year, including obligations under the Guarantee Redemption Fund, interest liabilities, Consolidated Sinking Fund, and pension commitments.
The report also flags persistent issues in financial governance and transparency. Excess expenditure was recorded in one revenue-charged section, while all 36 grants showed overall savings—an indication of inefficient budget utilisation.
Importantly, excess expenditures from the current and previous financial years, including those from the erstwhile state period, remain pending for legislative regularisation.
Delays in financial reporting further compound concerns. A total of 1,395 Utilisation Certificates amounting to ₹24,105.08 crore were pending submission.
Similarly, outstanding Abstract Contingent (AC) bills rose significantly—from 3,451 bills worth ₹25,127.97 crore as of March 2024 to 3,068 bills amounting to a staggering ₹2,15,607.21 crore by March 2025.
Accounting irregularities were also observed, with ₹1,941.43 crore classified under the vague Minor Head “800 – Other Expenditure,” despite the availability of more appropriate classifications.
Such practices, the report notes, dilute transparency and clarity in financial reporting. Additionally, several funds—including those related to construction workers’ welfare, district mineral foundations, and water usage charges—were kept outside the government accounts, further obscuring the true fiscal position.
On the administrative front, while initiatives like the Empowerment/Janbhagidari portal have improved transparency in developmental works, key reforms such as the migration to the SNA Sparsh system remain pending.
The report concludes with a cautionary note: rising debt levels, high committed expenditure, and constrained capital investment pose serious risks to fiscal sustainability. It calls for urgent measures including revenue augmentation, stricter expenditure control, improved transparency in off-budget borrowings, and more prudent budget provisioning to ensure long-term financial stability.
As the UT navigates its post-2019 administrative and economic trajectory, the findings highlight the pressing need for structural fiscal reforms to balance growth with sustainability.
