As former U.S. President Ronald Reagan once quipped, “A government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Nowhere is this more evident than in Jammu and Kashmir’s budget-making exercise, where the primary skill seems to be toggling someone else’s money rather than generating any of its own.
Omar Abdullah, however, seems far more excited about presenting the budget than he is about actually developing a roadmap for J&K’s prosperous future. Watching him revel in the grand theatrics of budget day, one might think he’s unveiling a revolutionary economic doctrine. In reality, it’s just another exercise in playing treasurer to someone else’s hard-earned money while failing to create a system where J&K can stand on its own feet.
As he prepares to present the Jammu and Kashmir budget on March 7, a fundamental reality remains unchanged – J&K does not generate its own wealth; it merely spends what it receives. Year after year, the budget has been an exercise in toggling someone else’s money, largely comprised of central grants, loans, and devolution funds. This institutionalized economic dependency has crippled the region’s ability to achieve self-reliance, making it a perpetual economic liability rather than a self-sustaining entity.
J&K’s Dependency on Central Funds
Jammu and Kashmir is among the highest recipients of financial aid from the central government. According to the Union Finance Ministry, J&K receives more than ₹35,000 crore annually in central grants, covering nearly 75% of its total budgetary expenditures. In contrast, its own revenue generation remains abysmally low. The state’s tax revenue stands at just ₹15,000 crore, barely sufficient to cover administrative costs. For every rupee it spends, a significant portion comes from Delhi, not from internal economic activity.
A look at recent budget allocations proves this point. The 2023-24 J&K Budget stood at ₹1.18 lakh crore, with central grants contributing ₹35,000 crore and own revenue making up just ₹15,000 crore. The deficit, exceeding ₹25,000 crore, was managed through borrowing. Despite repeated calls for economic revival, successive governments, including Omar Abdullah’s, have failed to create a self-sustaining financial model. Instead, they rely on a cycle of spending, borrowing, and seeking more funds from New Delhi – without any significant focus on generating revenue from within the region.
A Legacy of Misgovernance
The last time Jammu and Kashmir saw real economic reforms was under Bakshi Ghulam Mohammad in the 1950s and early 1960s – more than six decades ago. Since then, every government, particularly those led by the Abdullah dynasty, have chosen to keep J&K shackled to a subsidy-driven, grant-dependent economy rather than empower it to stand on its own feet. There has been no attempt to build a robust industrial base, no vision to enhance local revenue generation, and no political will to break free from the cycle of dependence. Even after the abrogation of Article 370, which was supposed to open doors for economic transformation, J&K remains a financial black hole, surviving off Delhi’s largesse while its leaders peddle excuses instead of reforms. This is not just administrative failure; it is a deliberate strategy to keep J&K permanently dependent and politically pliable.
Bakshi Ghulam Mohammad’s administration focused on building infrastructure, promoting industries, and improving public services – efforts that laid the foundation for some degree of economic self-sufficiency. Since then, successive governments, including those led by the Abdullahs, have failed to introduce any substantive economic policies aimed at reducing J&K’s financial dependence. Instead of fostering industrial growth or strengthening local revenue generation, these governments have preferred to sustain a fragile, subsidy-driven economy, fully reliant on central grants. Even after the abrogation of Article 370, no transformative reforms have been undertaken to make the region fiscally independent, leaving J&K in the same cycle of economic stagnation and external dependence that has persisted for over six decades.
Omar Abdullah’s last tenure as Chief Minister from 2009 to 2014 saw zero meaningful economic reforms. His government was characterized by high public expenditure without tangible returns. Nearly ₹50,000 crore was spent on salaries and pensions, while development projects remained sluggish. No serious efforts were made to attract industries, and even basic infrastructure required for industrial growth – such as a stable power supply and business-friendly policies – was lacking.
Private enterprises continued to struggle under bureaucratic red tape and rampant corruption, making J&K one of the least favorable states for investment in India. While the region had the potential to develop a thriving tourism industry, security concerns and administrative neglect led to a 35% decline in tourist arrivals between 2010 and 2014.
No Roadmap for Economic Independence
Let’s be assumptive. Instead of addressing these long-standing economic issues, the upcoming budget is expected to follow the same trajectory. A substantial portion will be allocated to government salaries, pensions, and administrative costs, exceeding ₹40,000 crore. Another significant share will go towards loan repayments and debt servicing, adding no economic value to the region. Political welfare schemes will be funded as a means of voter appeasement rather than genuine economic upliftment.
No major industrial policy or revenue generation plan is expected. The budget speech will likely contain vague promises, but no concrete measures to make J&K self-reliant. This continued cycle of dependency ensures that the region remains financially incapacitated, unable to stand on its own despite its vast economic potential.
The absence of a clear economic vision has turned J&K into a financially dependent region, unable to generate employment or foster growth. The 2025 budget should have prioritized industrialization, tourism infrastructure, and agricultural development to transform the region into a revenue-generating entity.
J&K contributes less than 1% of India’s total industrial output despite its vast potential. A structured industrial policy offering tax breaks and incentives is necessary to attract large-scale investments. The tourism sector, which should be a dominant industry, currently contributes only 6.98% to J&K’s GDP, a figure far below its true potential. Agricultural development remains another neglected sector, where farmers receive no direct support for value addition, supply chain development, or export facilitation.
Government revenue should ideally be generated through thriving businesses and industries, rather than through repeated financial aid from Delhi. However, no concrete efforts are being made to transition J&K into a self-sustaining economy.
The Cost of NC’s Failures
Omar Abdullah has frequently claimed that he wants to empower the youth. However, unemployment figures tell a different story. J&K’s unemployment rate in 2024 stood at 22.2%, almost three times the national average. Over 70% of youth in J&K rely on government jobs due to the lack of a private sector, leading to a mass exodus of skilled labor. In the past five years alone, more than 1.5 lakh educated youth have left J&K in search of better opportunities elsewhere.
In a pre-budget statement, Omar Abdullah admitted that “the first budget cannot solve all problems.” This is a classic tactic of avoiding accountability. While he makes grand statements about a long-term vision, the people of J&K continue to face stagnation. The upcoming budget will likely offer the same old empty rhetoric, lacking a strategic roadmap for economic transformation.
J&K Needs Builders, Not Just Spenders
Jammu and Kashmir does not need another budget that is just about spending borrowed money. It needs a visionary roadmap for generating revenue, fostering industries, and empowering the private sector. Unfortunately, Omar Abdullah’s administration seems intent on following the same failed model of dependency, toggling funds rather than building wealth.
The people of J&K deserve better – leaders who understand that true governance is about economic empowerment, not just the distribution of grants. Omar Abdullah’s budget, unless radically different, will once again prove that he is a politician skilled in spending, not in building a prosperous future. And, until people realize that the region needs another Bakshi Ghulam Mohammad to rule, they will continue to live in abject neglect.
