6 free LPG cylinders, sponsorship for orphans: What Omar Abdullah govt’s Budget has in store for J-K

J&K’s own tax and non-tax revenues are estimated to be Rs 31,800 crore, and it will receive Rs 42,752 crore as Central assistance and Rs 13,400 crore from Centrally sponsored schemes.

For the year 2026-27, it projected the tax/GDP ratio at 6.6 per cent, 0.9 per cent lower than 7.5 per cent projected for the current financial year. Likewise, the fiscal deficit for 2026-27 has been estimated to be 3.69 per cent, which is 0.71 per cent higher than the figures estimated for 2025-26.

Pointing out that nearly 60 per cent of J&K’s overall outlay is committed towards salaries, pensions and debt servicing, Abdullah said that the UT’s fiscal stress stems from its high committed expenditure and limited own revenue capacity, including own tax and non-tax revenues covering only 25 per cent of the budgetary needs. He attributed it to “geographical difficulties, structural constraints and inefficiencies” — especially in the power sector, leading to reliance on Central support.

To address this, Abdullah said his government has pursued fiscal reforms to enhance revenues, rationalise spending, and improve fiscal transparency. Highlighting the initiatives being taken in debt management to lower high-cost liabilities and eliminate off-budget debt, he said the government is strengthening debt sustainability by keeping all borrowings within approved limits and improving liquidity management.

While the government has enforced austerity measures to curb non-priority spending for the third consecutive year, it is also pursuing power sector reforms to reduce losses and improve billing efficiency.

Pointing out that J&K’s economy is estimated to grow at 11 per cent following the government’s sustained initiatives and strategic policy interventions, Abdullah said this positive GSDP trajectory has supported Jammu and Kashmir to tackle the aggravated fiscal challenges in the aftermath of the Pahalgam terror attack and the recent floods.

With a focus on agriculture, horticulture, employment, education, skill development, tourism and industry, he committed his government to transforming Jammu and Kashmir into a modern, progressive and economically vibrant region. Abdullah proposed a self-certification scheme for MSMEs, under which entrepreneurs will receive a single in-principle approval with a three-year grace period for clearance, enabling them to start operations without procedural delays.

He further proposed to extend incentives to ailing MSMEs at par with the new industrial units so as to ensure revival of viable enterprises and preserve the existing jobs.

Under the capital expenditure for 2026-27, he announced an allocation of Rs 3,456 crore for the Rural sector, Rs 2,809 crore for Housing & Urban Development, Rs 1,866 crore for the Health & Medical Education sector, Rs 1,718 crore for Power Development, Rs 1,513 crore for School & Higher Education Sector, Rs 472 crore for Tourism and Youth Affairs, Rs 461 crore for Industry and Handicrafts sector, Rs 244 crore for Labour & Employment Sector, Rs 235 crore for Triabal Affairs, Rs 170 crore for Social Welfare, Rs 351 for Disaster Mangement and Rs 331 crore for Planning sector, besides Rs 331 crore for Food & Civil Supply, Rs 155 crore for Sports & Youth Affairs, Rs 177 crore for Science & Technology and Rs 109 crore for Culture Department.

Agriculture

Pointing out that agriculture and allied sectors are undergoing transformation through interventions under the Holistic Agriculture Development Programme and the Competitiveness Improvement of Agriculture and Allied Sectors Project backed by IFAD assistance, Abdullah proposed setting up seven milk processing plants with one lakh liter per day capacity in the UT. Costing approximately Rs 770 crore, this will be funded through the UT Capex and Government of India scheme, benefitting 11 lakh dairy farmers, he said, adding that his target is to take J&K in milk processing from the current 4 % to 25% in the next few years. “We are proposing a top-up subsidy of 15% under the Integrated Dairy Development Scheme for Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme beneficiaries establishing milk processing plants.

He announced 25% top-up subsidy for popularising the micro and sprinkle irrigation scheme, earmarking Rs 116.86 crore for the purpose in the first instance, and also an Aromatic and Medicinal Plant Mission with a financial outlay of Rs 150 crore.

He also announced the implementation of the Restructured Weather-Based Insurance Scheme for both traditional and high-density apple and saffron in the Kashmir division and mango, litchi and saffron in the Jammu division. The insured sum would be Rs 6594.93 crore, he said.

Education

Abdullah proposed a monthly sponsorship of Rs 4,000 through Direct Benefit Transfer to support the education, nutrition and basic living needs of 6,000 orphan children who lost both parents or guardians, and have no stable source of income and are not receiving any such benefit from the Mission Vatsalya framework.

He further proposed to provide a full fee waiver to all students of AAY families studying in government schools from class 9-12 and government degree colleges, who are not receiving any other scholarship assistance, besides an outlay of Rs 70 crore for scholarship support of over three lakh tribal students, who include 2.82 lakh pre-matric and about 17,000 post-matric.

He also proposed to provide six free LPG cylinders per year to all AAY households in Jammu and Kashmir, covering the poorest of the poor.

Toursim

He proposed to build a sustainable, inclusive and year-round tourism economy, balancing infrastructure development with environmental conservation and community participation, saying that the government’s focus will be on developing new world-class tourist destinations, strengthening tourism circuits and positioning Jammu and Kashmir as a global tourism brand, with financial and technical support from the Union Ministry of Tourism.

Abdullah also proposed to further modernise pilgrimage infrastructure for the safety, comfort and spiritual experience of Amarnath pilgrims with an outlay of Rs 180 crore in 2026-27.

Health

He also proposed the establishment of full-fledged Emergency Medicine Departments in all Government Medical Colleges over the next two financial years, and establishing cath labs at Government Medical College at Rajouri and in Baramulla to strengthen advanced cardiac care services. A cath lab at GC Doda for the Chenab Valley will also be taken up, he said.

He further proposed to establish two dedicated Emergency and Accident Hospitals, one at Uri and another at Poonch, purchase bullet-proof ambulances for border districts and extend free government transport facility to persons with disabilities.