JAMMU: Jammu and Kashmir’s total debt in the financial year 2024-25 is estimated at Rs 1,37,067 crore, 48 per cent of the Union Territory’s GDP, which has expanded significantly to Rs 2,88,422 crore, Chief Minister Omar Abdullah said on Wednesday.
Defending his government’s fiscal management strategy, Abdullah said that the increase in the gross state domestic product (GSDP) has helped in reducing the debt-to-GSDP ratio to 48 per cent in the current fiscal from 51 per cent a year ago.
In a written reply to the assembly, the chief minister detailed the trend of the Union Territory’s debt-to-GSDP ratio for the past six years.
In 2019-20, liabilities stood at Rs 89,037 crore, which was 54 per cent of that year’s GSDP of Rs 1,64,103 crore.
Liabilities increased to Rs 98,244 crore in 2020-21, with the debt-to-GSDP ratio rising to 59 per cent, largely due to economic contraction during Covid pandemic, he said.
In 2021-22, liabilities rose to Rs 1,06,753 crore, but the debt-to-GSDP ratio declined to 53 per cent as economic recovery gained momentum, he said.
A year later in 2022-23, liabilities stood at Rs 1,09,825 crore, and the ratio further declined to 48 per cent, the chief minister said, adding, “In 2023-24, liabilities increased to Rs 1,25,205 crore, with the ratio at 51 per cent.”
Abdullah said that in the current fiscal year, liabilities are projected at Rs 1,37,067 crore, while GSDP has expanded significantly to Rs 2,88,422 crore, again bringing the debt-to-GSDP ratio down to 48 per cent.
The chief minister highlighted that fiscal sustainability has improved over the years, with economic growth helping to moderate the impact of rising debt on the Union Territory.
Abdullah further said that his government has ensured that borrowings are not directed towards unproductive expenditure.
“A substantial portion of funds has been channelled into capital expenditure, infrastructure development, power sector reforms and asset creation, strengthening long-term growth potential,” he said.
Capital outlays during the period under review, the chief minister said, consistently supported roads, power infrastructure, health facilities and other productive sectors.
He also asserted that borrowings were kept within the prescribed limits of the Fiscal Responsibility and Budget Management (FRBM) framework, with an emphasis on calibrated market borrowings, improved cash management and prioritisation of development-linked spending.
“The concern that rising internal debt has occurred without commensurate creation of productive assets is not established by the data,” Abdullah said, adding, “The improving debt-to-GSDP ratio and sustained capital investment clearly indicate responsible fiscal management.”
