Jammu and Kashmir (J&K) is grappling with significant financial distress, leading to concerns about its economic viability. The region is experiencing a scarcity of jobs, low business sentiment, and a real estate market that has hit a 30-year low. Many businesses are reportedly facing bankruptcy, and energy poverty is widespread, indicating a severe strain on the local economy. Economic activity in J&K primarily relies on government jobs, apple production, trade, and tourism, which are not sufficient to sustain robust growth.
As of the fiscal year 2024-25, J&K's liabilities are projected to reach ₹87,865 crore. While this figure is moderate compared to larger states like Uttar Pradesh and Maharashtra, it raises questions about the region's financial health. Notably, J&K's liabilities as a percentage of Gross State Domestic Product (GSDP) have improved from 61.2% in 2010 to 28.8% in 2024, suggesting some fiscal discipline. However, the fiscal deficit for the same period is estimated at ₹10,855 crore, which remains a concern, albeit lower than the deficits reported by states like Uttar Pradesh and Tamil Nadu.
The Reserve Bank of India (RBI) data indicates that J&K's borrowing is heavily reliant on State Development Loans and central loans, further complicating its financial landscape. As the region seeks to navigate these economic challenges, the focus remains on revitalizing the handicraft sector, which has been impacted by proposed increases in Goods and Services Tax (GST) on local products. The Kashmir Chamber of Commerce and Industry (KCCI) has been advocating for better marketing strategies and participation in trade fairs to boost the handicraft industry, which is essential for employment and exports.
In light of these developments, the interplay between government policies, local industries, and the overall economic climate will be crucial in determining whether J&K can stabilize its financial situation and foster sustainable growth in the coming years. [f7f5c897][fa75cc84][060ca6a7][240db48a]