Although the Union Territory of Jammu and Kashmir has shown some improvement in its own revenue performance, its dependence on central grants-in-aid remains substantial compared to other states and Union Territories, the Comptroller and Auditor General of India has observed.
In its report on the finances of Jammu and Kashmir for 2024–25, the CAG noted that out of the total expenditure (TE) of ₹82,547.28 crore, revenue expenditure accounted for a significant 85.37 per cent. A major portion of this was consumed by committed costs and subsidies, which constituted 68.39 per cent of revenue expenditure and 58.39 per cent of total expenditure, leaving limited fiscal space for capital investment.
Capital expenditure remained below budgeted levels, indicating constraints in infrastructure development.
The report further highlighted that the Union Territory failed to contain its fiscal deficit within the targets set in budget documents. The outstanding liabilities of the UT increased from 8.87 per cent of GSDP in 2020–21 to 17.21 per cent in 2024–25. When liabilities of the erstwhile state are taken into account, the figure rises sharply to 48.47 per cent of GSDP in 2024–25, excluding off-budget borrowings amounting to ₹23,197.08 crore.
“Besides, the UT government also carried forward undischarged liabilities in respect of the Guarantee Redemption Fund (GRF), interest liabilities, Consolidated Sinking Fund (CSF), pension fund, etc., to the tune of ₹934.02 crore, accounting for 1.13 per cent of total expenditure during FY 2024–25,” the report stated.
Despite some improvement in the UT’s own revenue generation, dependence on central grants continues to remain high.
The report provides an independent assessment of the fiscal position of the Union Territory for 2024–25, analysing its overall financial health, revenue and expenditure trends, debt position, borrowing patterns, and compliance with fiscal responsibility laws, while also comparing its performance against key fiscal indicators.
Moderate Economic Growth
The UT’s economy recorded moderate growth during 2024–25, with GSDP expanding by 11.18 per cent compared to the previous financial year. However, its contribution to India’s GDP stood at 0.79 per cent, down from 0.85 per cent in 2020–21.
Revenue receipts increased by 6.12 per cent, primarily due to higher grants-in-aid from the Government of India. However, growth in the UT’s own tax revenue remained modest at 2.5 per cent, again highlighting reliance on central support.
Irregularities and Delays Flagged
The fiscal year also witnessed large-scale excess expenditure in one revenue-charged section and overall savings across all 36 grants. The CAG noted that excess expenditure for 2024–25 and previous years, and that pertaining to the erstwhile state, requires regularisation by the legislature.
The report also flagged delays in submission of utilisation certificates, with 1,395 UCs worth ₹4,105.08 crore pending.
Outstanding Abstract Contingent (AC) bills stood at 3,068 cases, amounting to ₹15,607.21 crore as of March 31, 2025, compared to 3,451 bills worth ₹25,127.97 crore a year earlier.
Additionally, 28 accounts relating to eight autonomous bodies were pending as of March 2025.
During 2024–25, ₹1,941.43 crore—2.35 per cent of total revenue and capital expenditure—was classified under the ambiguous Minor Head 800. Of this, ₹49.15 crore under five major heads was booked under “Other Expenditure” despite the availability of appropriate classification heads, raising concerns over transparency in financial reporting.
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