Jammu and Kashmir’s interim budget for 2024-25 paints a picture of positive orientation. The interim budget has set ambitious spending plans in key sectors like infrastructure, health, education, and social welfare. While a full budget would provide a better insight into the direction, priorities and actual financial allocations, besides key macroeconomic indicators, the interim focus on critical areas highlights some promising aspects.
The interim budget has prioritized crucial areas like agriculture (HADP), education (Samagra Shiksha), health (NHM), and rural housing (PMAY-G), with significant allocations compared to 2023. Such public spending in key growth generating sectors is positive, given the level of reliance on public spending in J&K in propelling economic growth. An array of activities in the budget focus on improving road connectivity, strengthening panchayat and urban local bodies, and developing new colleges and universities. This addresses a long standing need for better rural road infrastructure and improving the quality of higher educational infrastructure in J&K, which is likely to result in two key outcomes – improvement of higher educational quality and boosting economic activities in rural areas.
Initiatives like Ladli Beti, Marriage Assistance, and Kashmiri Pandit transit accommodation are well prioritised, considering their social relevance and the imperative of an early and dignified return of the internally displaced Pandit community members. It is equally good to note that the interim budget has made sizeable allocations for rooftop solar and other renewable energy projects, which would go a long way in reducing the reliance on costly and deficient hydroelectric power. However, this component would require an enhanced allocation in the full budget, considering the relevance and utility of this investment in reducing the demand on the hydro electricity and improving the efficiency in the power distribution system in J&K.
From a macroeconomic perspective, what does not present a comfortable picture is the fact that J&K’s budget continues to heavily rely on central government grants and borrowings, raising questions about long-term fiscal sustainability and potentially hindering future development plans. What is also important to emphasise is that while implementation efficiency has been significantly improved in recent years for multiple governance reforms undertaken in J&K, below optimum project execution and delays continue to hamper its growth ambitions. A lot more work is required to bring about efficiency and effectiveness in utilizing allocated funds, particularly in infrastructure development, in J&K. Careful planning, efficient execution, and exploring alternative revenue streams are crucial for translating these promises into tangible improvements for the people of Jammu and Kashmir. That said, this budget provides a good opportunity to leverage the gains of recent years and achieve sustainable human and economic development in Jammu & Kashmir.