Srinagar: Jammu and Kashmir’s debt burden has emerged as a major concern, with the state’s outstanding liabilities standing at 33.6% of its Gross State Domestic Product (GSDP) — significantly higher than the national average of 28.8%, according to a Reserve Bank of India (RBI) study of state budgets.
The data highlights that J&K’s debt levels are among the highest in the country, comparable to fiscally stressed states like Kerala (36.8%), Rajasthan (35.8%), and Bihar (37.3%). However, the region fares slightly better than Punjab, which tops the list with a staggering 46.6% of GSDP, followed closely by Himachal Pradesh at 45.2%.
On the other end of the spectrum, Delhi records the lowest debt-to-GSDP ratio at just 1.3%, while Gujarat (17.9%), Maharashtra (19%), and Odisha (16.3%) also report relatively healthier fiscal positions.
The data of state debts shows a worrying trend in the northeastern states, with Nagaland (40%), Meghalaya (39%), and Mizoram (31.6%) carrying heavy burdens. Sikkim (35%) and Tripura (27.9%) also feature prominently among the high-debt states.
Experts caution that J&K’s high debt ratio could severely constrain its ability to invest in critical infrastructure, health, and education. “With such a significant portion of resources going towards debt servicing, there is less fiscal space left for development,” an economist explained.
The report also underscores the need for fiscal discipline across high-debt states and UTs. While J&K’s figure does not reach Punjab’s alarming levels, its debt trajectory is well above the national average, raising concerns over sustainability in the long term.
The findings come at a time when Jammu and Kashmir is seeking to boost investment, improve infrastructure and expand employment opportunities. Observers say managing debt prudently will be key to ensuring that growth does not come at the cost of financial stability.
