Finance Minister Nirmala Sitharaman’s Union Budget 2025-2026, presented in the parliament on Saturday, has brought much-needed relief to India’s middle class, including those in Jammu & Kashmir (J&K). The reduction in income tax slabs is a pleasant step that will put more money in the hands of middle-income earners, particularly those earning less than ₹12 lakh per year. This move is expected to boost consumer spending, stimulate economic activity, and enhance demand for goods and services, providing momentum to India’s post-pandemic economic recovery.
The budget’s strong focus on farmers and agriculture is also commendable. The government has introduced new initiatives to improve agricultural productivity, irrigation, and market access. These measures are particularly important for J&K, where horticulture, saffron, and paddy cultivation play a crucial role in its economy. Increased investments in technology-driven farming, cold storage, and agri-exports could significantly benefit small and marginal farmers here.
However, despite these positives, the budget has delivered unsettling news for J&K — a ₹1,000 crore reduction in central financial assistance compared to the previous year. This cut raises serious concerns about J&K’s development trajectory, especially at a time when J&K is striving to rebuild its economy, attract investments, and create jobs.
Being a Union Territory as of now, J&K remains heavily dependent on central funds for its developmental projects, infrastructure, education, and social welfare programs. A reduction in central assistance means that several critical projects, including those in healthcare, education, and road connectivity, might face delays or even stagnation. This could impact employment generation, especially in rural areas, where public sector projects play a crucial role in providing livelihood opportunities.
While the budget’s focus on taxation relief and economic growth is appreciated, the central government must recognize that J&K’s unique socio-economic challenges require sustained financial support. It is imperative that alternative funding mechanisms, such as special grants or increased private-sector investments, are considered to offset the reduction in central assistance.
The J&K administration must also reassess its financial priorities and ensure that essential sectors such as healthcare, education, and employment schemes do not suffer due to this cut. Additionally, the central government should clarify whether additional financial allocations for J&K will be announced later in the year under any specific schemes.
Overall, the Union Budget 2025-26 is a step in the right direction for India’s middle class and agricultural sector. However, for J&K, the reduction in central assistance presents a challenge that could slow down the region’s economic growth and development efforts. As J&K navigates its economic and political transition, continued financial support from the center remains crucial.
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