Jammu and Kashmir is grappling with increasing financial strain as its total liabilities surged to ₹1,12,797 crore in the fiscal year 2022-23, according to recent budget figures.
Public debt, a significant portion of these liabilities, stands at ₹69,617 crore. This includes ₹68,786 crore in internal liabilities and ₹831 crore in loans and advances from the Central government.
The remaining ₹43,180 crore comprises other liabilities, such as insurance and pension funds (₹1,331 crore), provident funds (₹28,275 crore), and other obligations (₹13,574 crore).
Compared to the previous fiscal year 2021-22, when the total debt stock was ₹1,01,462 crore, the current figures represent a notable increase. Public debt alone has risen from ₹ 62,395 crore to ₹69,617 crore within a year.
Over the past decade, the debt burden has seen a dramatic rise. From ₹29,972 crore in 2010-11, the liabilities have more than tripled, growing by approximately 3.5 times in just ten years.
This trend suggests the urgent need for expanding revenue sources and promoting sustainable economic growth in the region.
A key indicator of the debt burden, the debt-to-GDP ratio for J&K, is projected to reach 51 per cent for the fiscal year 2024-25, as per budget estimates. This figure raises concerns about the long-term fiscal sustainability of J&K.
Despite the growing debt, Finance Minister Nirmala Sitharaman expressed optimism about J&K’s economic trajectory in her recent budget speech.
The Gross State Domestic Product (GSDP) growth for the current financial year (2023-24) is expected to be 7.5 per cent, indicating that the economy remains on a growth path.
The J&K government has been focusing on equitable growth across all sectors of the economy. To sustain developmental initiatives, authorities have been pursuing both tax and non-tax revenue avenues judiciously.
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