Jammu & Kashmir's Economic Resurgence: Leading Northern States in Growth Metrics
The Union Territory of Jammu and Kashmir has demonstrated remarkable economic progress, outpacing several northern states and Union Territories with a compound annual growth rate (CAGR) of 8.81 percent in per capita income between April 2019 and March 2025. This significant achievement, highlighted in the J&K Government's Economic Survey 2025-26, underscores a period of sustained economic development following the abrogation of Article 370.
Comparative Growth Outperformance
From 2019-20 to 2024-25, Jammu and Kashmir's per capita income growth rate of 8.81 percent has surpassed that of key northern regions:
- Himachal Pradesh: 6.54 percent
- Delhi: 6.74 percent
- Punjab: 7.46 percent
- Chandigarh: 8.21 percent
- Haryana: 8.72 percent
This growth trajectory indicates a narrowing economic gap with national averages, reflecting enhanced economic opportunities and improved living standards for residents.
Key Economic Indicators Show Positive Trends
The Economic Survey provides a comprehensive overview of J&K's economic health, with several indicators pointing toward robust performance:
- GDP Contributions: J&K contributes approximately 0.8 percent to India's national GDP, aligning closely with its population share. The Real GSDP is projected to grow by 5.82 percent, while nominal GSDP is estimated at 8.80 percent for 2025-26.
- Inflation and Employment: Inflation has declined from 4.5 percent in 2024 to 3.8 percent in 2025. Concurrently, the unemployment rate decreased from 6.7 percent in 2019-20 to 6.1 percent in 2023-24, with Labour Force Participation Rate and Worker Population Ratio rising to 64.3 percent and 60.4 percent, respectively.
- Per Capita Income: Estimated at Rs 1,68,248 for 2025-26, this represents a 170 percent increase from 2014-15, though it remains below the national average of Rs 2,19,575.
Sectoral and Financial Insights
The survey details sectoral contributions and financial reforms that have bolstered economic stability:
- Sectoral Breakdown: The tertiary sector leads with 61.02 percent contribution to Gross State Value Added, followed by primary (20.45 percent) and secondary (18.52 percent) sectors.
- Credit and Revenue: The credit-deposit ratio stands at 62.93 percent as of September 2025, with priority sector credit dominated by agriculture (48 percent) and MSMEs (23 percent). Revenue collection has shown consistent growth, with average monthly revenue increasing by 5.7 percent in FY23, 16.3 percent in FY24, and 3.90 percent in FY25.
- Expenditure Patterns: Revenue expenditure in the first eight months of the current financial year reached Rs 45,157 crore, accounting for 64 percent of the previous year's total. Salaries and pensions constituted over 52.42 percent of this expenditure, while capital expenditure was Rs 7,933 crore, or 42 percent of the 2024-25 figure.
Fiscal Management and Debt Structure
Improved fiscal transparency and debt management are evident in the survey's findings:
Public debt comprised about 69 percent of total liabilities in 2024-25, with internal debt forming the majority at 68 percent. Over the past decade, the share of internal debt has increased from 55 percent to 68 percent, while Provident Fund liabilities declined from 27 percent to 19 percent. This shift reflects enhanced debt management strategies, longer maturities, and reduced rollover risks.
Additionally, non-tax revenue's share in own resources rose from 29 percent in 2021-22 to 33 percent in 2024-25, largely driven by increased power tariff contributions. Tax revenue in the first eight months of the current financial year stood at Rs 9,136 crore, with GST accounting for 58.88 percent, while non-tax revenue reached Rs 4,386 crore.
Conclusion: A Path Toward Sustainable Growth
The Economic Survey 2025-26 paints a promising picture of Jammu and Kashmir's economic landscape. With per capita income growth leading northern states, declining inflation, and improving employment metrics, the Union Territory is on a path toward sustainable development. Continued focus on sectoral diversification, financial reforms, and fiscal prudence will be crucial in maintaining this positive momentum and further bridging the gap with national economic benchmarks.
