J&K Economic Growth Slows to 11.18% in FY25; CAG Flags Rising Debt & Fiscal Concerns
JAMMU, April 3, 2026 :The economy of Jammu and Kashmir recorded a slight moderation in growth, with Gross State Domestic Product (GSDP) expanding by 11.18% in 2024–25, down from 12.51% in the previous fiscal, according to a report by the Comptroller and Auditor General of India (CAG).
The report, tabled in the Legislative Assembly by Chief Minister Omar Abdullah, noted that despite the dip, J&K’s growth has remained consistently in the 11–12% range over the past four years, indicating relative economic stability.
J&K’s contribution to India’s GDP also saw a marginal increase, rising to 0.79% in FY25 from 0.78% in FY24, signaling a slight recovery after a period of stagnation.
Economic Expansion & Income Growth
Over the last five years (2020–21 to 2024–25), the size of J&K’s economy expanded significantly from ₹1.67 lakh crore to ₹2.62 lakh crore, marking an increase of nearly ₹95,000 crore.
Per capita income also showed steady improvement, climbing from ₹1,01,645 in 2020–21 to ₹1,54,826 in 2024–25, though it continues to remain below the national average.
Growth Trend Over the Years
The report highlighted a fluctuating but upward trajectory in growth:
- 2020–21: 2.25% (Covid impact)
- 2021–22: 12.38%
- 2022–23: 11.27%
- 2023–24: 12.51%
- 2024–25: 11.18%
Revenue & Fiscal Concerns
Revenue receipts grew by 6.12% in FY25, largely driven by increased central grants-in-aid. However, the UT’s own tax revenue grew by only 2.5%, reflecting continued dependence on central assistance.
Out of the total expenditure of ₹82,547.28 crore, a substantial 85.37% was revenue expenditure, mainly on committed liabilities and subsidies. This left limited fiscal space for capital investment, with capital expenditure remaining below budgeted levels.
Rising Debt & Liabilities
The CAG flagged growing fiscal stress, noting that outstanding liabilities rose from 8.87% of GSDP in 2020–21 to 17.21% in 2024–25. When liabilities of the erstwhile state are included, this figure climbs sharply to 48.47% of GSDP, excluding off-budget borrowings of over ₹23,197 crore.
Additionally, undischarged liabilities related to funds such as GRF, CSF, and pensions stood at ₹934.02 crore.
Financial Irregularities & Delays
The report also highlighted several governance and accounting concerns:
- 1,395 Utilisation Certificates worth ₹4,105.08 crore pending
- 3,068 AC bills amounting to ₹15,607.21 crore outstanding
- 28 accounts of 8 Autonomous Bodies still pending
- Misclassification of ₹1,941.43 crore under Minor Head 800, affecting transparency
Certain funds, including welfare cess and mineral funds, were kept outside government accounts, raising further transparency issues.
Way Forward Suggested by CAG
The CAG stressed the need for:
- Revenue augmentation
- Better expenditure management
- Increased capital investment
- Transparency in off-budget borrowings
- Timely financial reporting and reforms
While acknowledging steps like the Janbhagidari portal for transparency, the report noted delays in adopting systems like SNA Sparsh.
Conclusion
Despite steady economic growth and expansion, the report underscores mounting debt, high committed expenditure, and limited infrastructure investment as key challenges that could impact the long-term fiscal sustainability of Jammu and Kashmir.
