Budget 2026–27 Walks Tightrope Between Fiscal Discipline and Development
Capital Spend Up, Tax-to-GDP Ratio Falls to 6.6%
JAmmu ;- Ishfaq Gowhar
The Jammu and Kashmir Government on Tuesday announced a series of major policy decisions linking industrial growth directly with local employment, alongside big-ticket initiatives for agriculture and horticulture, aimed at promoting inclusive and regionally balanced development.
The announcements were made by Finance Minister Omar Abdullah, who presented the Budget in the Legislative Assembly, outlining wide-ranging measures for industry, farming, and rural livelihoods.
In a significant move, the government declared that all industrial units availing any form of government concession—including subsidies, electricity incentives, or land benefits—will be required to give priority to employment of local youth from Jammu and Kashmir. The policy is aimed at ensuring that public incentives result in direct job creation, skill development, and income generation for residents of the Union Territory.
Officials said the move would align investment with inclusive development and curb jobless growth, ensuring that the benefits of industrialisation are shared equitably with local communities and contribute meaningfully to regional prosperity.
To strengthen the horticulture economy, the Finance Minister announced the implementation of the Restructured Weather Based Insurance Scheme (RWBIS) in Jammu and Kashmir. The scheme will cover Apple (both traditional and high-density orchards) and Saffron in the Kashmir Division, while Mango, Litchi, and Saffron will be covered in the Jammu Division.
Under the scheme, the sum insured has been fixed at ₹6,594.93 crore, providing a significant safety net to farmers against weather-related risks. The government said the initiative would help stabilise farm incomes in a sector that forms the backbone of the rural economy.
Acknowledging gaps in post-harvest infrastructure, particularly Controlled Atmosphere (CA) storage, the government noted that 68 CA stores with a combined capacity of 2.92 lakh metric tonnes (LMT) are currently operational, against a requirement of 6.00 LMT.
To bridge this shortfall, an additional 15,000 MT of CA capacity will be added in 2025–26, while 38,000 MT of new capacity is targeted for 2026–27.
The government also announced a shift in focus of CA storage expansion to districts other than Pulwama and Shopian, where capacity has already saturated. As part of this plan, 40 new CA stores will be developed with a total investment of ₹1,400 crore.
Out of this, the government will provide a subsidy of ₹600 crore, with top-up subsidy support available from 2026–27, encouraging private investment in under-served regions.
To promote climate-resilient agriculture, the Budget announced a 25 percent top-up subsidy for micro and sprinkler irrigation systems. An amount of ₹116.86 crore has been earmarked in the first phase, which is expected to improve water use efficiency by 60 to 80 percent and benefit farmers across 3 lakh hectares.
Officials said the initiative would significantly reduce water stress, improve productivity, and support sustainable farming practices.
Local stakeholders, including representatives from agriculture, horticulture, and industry sectors, welcomed the Budget speech, terming it farmer-friendly and employment-oriented.
Overall, the Budget marks a clear policy shift towards employment-linked industrial incentives and farmer-centric development, with a strong emphasis on sustainability, regional balance, and economic inclusion.
