In early 2023, the central government reduced the monthly rice allotment to Jammu and Kashmir under the Public Distribution System (PDS), limiting the supply to five kilograms per person from the earlier 35 kilograms per family. The move, justified under a nationwide ration rationalization, left thousands of families struggling to afford rice in a region where it remains a staple.
In his first budget as Jammu Kashmir’s finance minister, Chief Minister Omar Abdullah has attempted to respond to the crisis. Presenting the budget on March 7, Abdullah announced an additional 10 kilograms of free rice per month for Antyodaya Anna Yojana (AAY) families. The provision is expected to benefit over 3.2 lakh families, but some question whether it tackles the root issue of economic vulnerability or merely offers temporary relief.
“This was clearly a reaction to the rice cut two years ago,” said Dr. Tariq Masoodi, an economist based in Srinagar. “It offers immediate assistance, but the underlying question is why a region like Jammu and Kashmir should still depend on handouts instead of ensuring stronger financial independence.”
Alongside the rice provision, Abdullah’s budget introduced a series of welfare measures aimed at low-income families. Among them was the announcement of 200 units of free electricity per month for AAY households. The government has linked this provision with the Prime Minister’s Suryaghar Bijli Yojana, ensuring that the families install grid-connected solar systems to cover their electricity consumption. The initiative is expected to cost the government around Rs 750 crore over the next five years.
The budget also promised an increase in marriage assistance for girls from economically weaker sections. Under the revised structure, families falling under the AAY category would receive Rs 75,000 for a daughter’s marriage, up from the previous Rs 50,000. Additionally, old-age pensions were revised to Rs 1,250 per month for individuals below 60, Rs 1,500 for those between 60 and 80 years, and Rs 2,000 for those above 80.
“This budget is clearly modeled around reaching a wider voter base through direct financial assistance,” Masoodi remarked. “But the underlying economic vision remains unclear. Where is the plan for employment or industry growth?”
A significant announcement that drew mixed reactions was the government’s decision to provide free bus rides for women on government-owned public transport starting April 2025. The move is projected to cost Rs 50 crore in the upcoming financial year. While the government hailed it as a major step towards easing mobility for women, opposition members criticized it as a distraction from larger economic problems.
“You can’t expect free bus rides to compensate for the absence of employment or stagnant wages,” Masoodi said. “The government seems to be focusing heavily on measures that offer instant relief but have no structural benefit.”
The budget, however, did not introduce any major employment schemes or large-scale industrial investment proposals. Despite widespread unemployment, which remains one of the highest in the country, the government only referred around 3,700 vacancies to recruitment agencies out of the 32,474 vacant government posts. The budget made no clear reference to private sector development or large-scale job creation.
Another significant highlight was the decision to waive stamp duty on property transfers within families. Until now, property transferred between blood relations attracted a stamp duty ranging from three to seven percent, which often discouraged families from formal registration. Abdullah scrapped the duty entirely, stating it would help reduce legal disputes and promote formal property transfers.
“This is one of the few sensible long-term measures in the budget,” Masoodi noted. “The waiver of stamp duty will simplify property inheritance and avoid future legal complications, which is a step in the right direction.”
Dependence on Central funds
The budget’s revenue model, however, exposed the region’s heavy dependence on central funds. Of the Rs 1.12 lakh crore budget for the 2025-26 fiscal year, Rs 58,624 crore — over 50 percent — will come from the Ministry of Home Affairs as central grants. Jammu and Kashmir’s own tax revenue is projected at Rs 21,550 crore, while non-tax revenue is estimated to bring in Rs 10,355 crore. The government also hopes to generate Rs 7,453 crore through asset monetization, a move that raised concerns about the potential privatization of public assets.
To balance the expenditure, Abdullah’s government will raise Rs 14,328 crore in debt during the fiscal year. Jammu and Kashmir’s cumulative public debt has already reached Rs 1.25 lakh crore, constituting around 51 percent of its Gross State Domestic Product (GSDP). Abdullah defended the debt, stating that his government would prioritize controlling spending rather than introducing fresh liabilities.
“What I find concerning is the increasing reliance on debt,” Masoodi observed. “The government is spending heavily on welfare while borrowing more to meet fiscal gaps. This is not sustainable in the long run.”
The budget also introduced a 15 percent price preference for local manufacturers to boost small and medium enterprises (SMEs). The government has allocated Rs 100 crore for the revival of wool and leather processing industries and Rs 50 crore for emerging start-ups. However, there was no clear policy plan to expand industrial investment or attract large private capital.
“This was a critical opportunity to break the pattern of economic dependence, and it has been missed,” Masoodi said. “There is no structural plan for industrial growth, no significant employment generation, and no long-term fiscal vision. The government seems content with short-term relief measures while avoiding larger economic challenges.”
During the assembly debate, opposition members, primarily from the BJP, criticized the budget for merely aggregating centrally sponsored schemes without introducing any fresh economic vision. Dr. Sunil Bhardwaj, a BJP MLA from Ramnagar, held up the previous year’s central budget in the assembly, arguing that Abdullah’s budget was merely a “localized copy-paste exercise.”
“What has this government actually created on its own?” Bhardwaj asked in the assembly. “The revenue models, the welfare schemes, and even the infrastructure proposals are centrally designed. Where is the local vision?”
No Drastic reforms on agriculture
The budget’s treatment of agriculture — a sector that supports nearly 70 percent of Jammu Kashmir’s population — remained largely peripheral. Despite agriculture contributing around 19.72 percent to the Gross Value Added (GVA), the budget offered no significant fiscal push for the sector’s revival. The only notable reference was a Rs 100 crore allocation for wool processing under the industries department. However, there was no mention of expanding irrigation infrastructure, increasing crop insurance coverage, or setting up cold storage chains to reduce post-harvest losses. The Economic Survey 2025, presented a day before the budget, highlighted that small landholdings, rapid urbanization, and declining water availability have pushed agriculture to the brink of non-viability in many parts of the region. Yet the budget remained silent on policy-level interventions that could reverse this decline.
“This is not merely an omission; it’s a policy failure,” said Masoodi. “Agriculture in Jammu and Kashmir is already struggling due to unplanned urbanization, climate stress, and poor infrastructure. The budget should have prioritized stabilizing farm incomes, ensuring irrigation access, and expanding agri-market networks. Instead, the government is talking about tourism growth while leaving the primary sector untouched.”
The government’s silence on agricultural cooperatives, credit access, and horticulture growth was particularly surprising. Given that horticulture — particularly apple production — remains the largest revenue-generating segment within the sector, many expected the budget to introduce new cold-chain networks, transport subsidies, or market expansion strategies. The Economic Survey noted that post-harvest losses, particularly for apple farmers, still account for over 30 percent of total produce due to poor storage and limited market access. But the budget did not allocate any fresh funds for horticulture infrastructure or transport subsidies.
While the budget increased marriage assistance and social pensions, it did not offer any rural employment guarantee scheme or financial support for small landholders. “There is no financial vision for the primary sector,” Masoodi noted. “Rural distress will only deepen without a clear policy to address falling farm incomes and rising rural unemployment.”
The only indirect relief announced for rural communities came in the form of increased pensions for the elderly and additional rice distribution for AAY households. However, Masoodi noted that such short-term measures cannot substitute for comprehensive agricultural reforms. “The government is building a welfare economy without addressing the economic roots of rural distress,” he said. “Instead of pumping money into tourism and public transport, they should have prioritized irrigation, crop insurance, and agri-infrastructure.”
The budget also remained silent on developing cash-crop markets, reviving saffron production, or addressing the declining paddy cultivation in southern Kashmir. In Pulwama, Shopian, and Anantnag, once considered the rice bowl of Kashmir, paddy fields are rapidly disappearing due to urbanization and unregulated land use. Yet, no policy initiative was proposed to safeguard agricultural land from conversion or offer price guarantees to farmers.
“The irony is that the government is celebrating high tourist footfall, but they are not addressing the fact that agriculture — which feeds the entire economy — is in rapid decline. Without structural reforms, we will soon have a situation where food dependency will increase while rural economies collapse. This budget missed a crucial opportunity to intervene and protect Kashmir’s primary sector from complete erosion, ” Masoodi concluded.
Abdullah, however, defended his budget, stating that Jammu and Kashmir’s fiscal space was limited and that his government was using all available resources to maximize welfare. He also hinted that future budgets might focus more on economic development.
“If I present a second budget next year, my focus will be on economic sustainability, not just welfare,” Abdullah told reporters after the budget presentation. But analysts remain unconvinced.
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