Jammu and Kashmir's Balanced Fiscal Strategy Amid Growing Debt

Jammu and Kashmir's debt for the financial year 2024-25 is pegged at Rs 1,37,067 crore, amounting to 48% of the Union Territory's GDP, which now stands at Rs 2,88,422 crore, according to Chief Minister Omar Abdullah. He defended the administration's fiscal strategies, noting a significant reduction in the debt-to-GSDP ratio from 54% in 2019-20 to 48% currently.

Abdullah attributed the improved ratio to robust economic growth, which has tempered the debt impact. The liabilities increased from Rs 89,037 crore in 2019-20 to Rs 1,25,205 crore in 2023-24, but the debt-to-GSDP ratio showed volatility due to factors like the COVID-19 pandemic. He emphasized channeling funds into capital expenditure, infrastructure, and power sector reforms, enhancing the region's growth potential.

The Chief Minister assured that the borrowings remain within the Fiscal Responsibility and Budget Management (FRBM) framework, underscoring the importance of productive investments. The effective fiscal management is evident in the stable debt-to-GSDP ratio and the prudent allocation of resources to supportive sectors, Abdullah said.