Union Budget 2025: ₹41,000-crore budget for J&K falls short on expectation on Central assistance

The ₹41,000.07-crore budget proposed for 2025-26 for Jammu and Kashmir on Saturday (February 1, 2025) saw a significant dip in Central assistance. For comparison, the budgetary allocations for J&K were ₹42,277 crore in FY 2024-25 and ₹41,604 crore for 2023-24.

Out of the ₹41,000.07 crore allotted to J&K, ₹40,619.30 crore is Central assistance to bridge the State’s resource gap. Around ₹279 crore have been proposed to be allocated as grants towards contribution to the Union Territory Disaster Response Fund and ₹101.77 crore to meet resource gap funding for infrastructure projects.

The current budgetary allocation was the first towards J&K that saw an elected government last year after a gap of six years.

The previous budget for 2024-25 was ₹1,18,728 crore, which included overall Central assistance of ₹67,133 crores, including ₹12,000 crore for the salary, pension, and other costs of the J&K Police.

This year, the Centre allocated ₹9,325 crore for the J&K Police, which is still under the administrative control of the Ministry of Home Affairs.

Of ₹9,325.73 crore allocated to the J&K Police, ₹8,897.72 crore has been earmarked for the revenue expenditure and ₹428.01 crore for the capital expenditure.

Meanwhile, the Centre proposed an allocation of ₹4,692.15 crore for the Union Territory of Ladakh for 2025-26. Of ₹4,692.15 crore, ₹2,450 crore was as revenue expenditure and ₹2,242.15 crore as capital expenditure. The current budget allocation sees a dip compared to the previous year’s allocation of ₹5,958 crores.

With Central assistance for J&K witnessing a considerable decline this year, J&K parties have expressed disappointment.

“There is nothing for J&K in the budget. We have been demanding an increase in the import duty on horticulture. The demand has not been met. Besides, there is nothing about handicrafts, which has gone down from ₹5,000 crore industry to ₹400 crore,” Peoples Democratic Party leader Iqbal Lone said.

J&K Peoples Conference chief Sajad Lone, while criticising the allocation, said, “The proposed allocation to J&K is approximately 1,000 crore less than the previous allocation. When adjusted for inflation, it is reduced by another 2,000 to 3,000 crores. It is time the Chief Minister sahib asks for the return of those shawls, which he so slavishly gifted and wrapped around the shoulders of top echelons of BJP.”

The Kashmir Chamber of Commerce and Industry (KCCI), a valley-based body of traders, underscored that there was “absence of a special revival package for J&K, especially in light of the region’s prolonged economic challenges extended over a period of three decades”.

“The expectation for a 20% increase in Central allocation has not been met, with a reduction of over ₹1,000 crore in Central assistance, which raises serious concerns about the region’s development trajectory,” the KCCI said.

The KCCI, however, welcomed the proposal to extend the export time frame for handicraft goods from six months to one year, with the possibility of an additional three-month extension. “This flexibility will significantly benefit exporters, It was long pending demand of KCCI,” it said.