GDP of Jammu and Kashmir is projected to expand by 7.5% in 2023-24

New Delhi: The gross  domestic product (GDP) of Jammu and Kashmir is projected to expand by 7.5% in 2023-24, reaching a scale of $28 billion. This demonstrates a compound annual growth rate (CAGR) of 8.8% from 2018-19 to 2023-24.

Foreign direct investments (FDI) and exports are expanding, with resurgence in tourist attraction. The recent budget announcements and projects unveiled by Honorable Prime Minister Shri Narendra Modi Ji will further enhance the growth trajectory of the state to new heights.

Jammu and Kashmir (J&K) contributes approximately 0.8 percent to India’s gross domestic product (GDP), in alignment with its population share of 0.9 percent. The current growth trends in the state indicate a steep growth path in the coming years, with the GSDP projected to double from the current level of $28 billion (2023-24) to around $60 billion by 2027-28.

The agricultural sector has seen significant growth, rising from 2% in 2011-12 to 6% in 2022-23. Similarly, the industrial sector has shown an upward trajectory, increasing from 3% in 2011-12 to 8% in 2022-23. Meanwhile, the services sector has maintained a steady growth rate of above 8% for many years on average.

Jammu and Kashmir (J&K) is globally renowned as a premier tourist destination. Beyond conventional recreational tourism, the region offers immense opportunities for adventure, pilgrimage, spiritual retreats, and health-centric tourism experiences.

Blessed with abundant natural resources, J&K has capitalized on its land for cultivating a wide array of fruits. Its diverse agro-climatic conditions create an optimal environment for horticulture, presenting substantial growth opportunities.

The Union Territory boasts a flourishing food processing industry and agro-based enterprises. Additionally, J&K’s favorable climate supports a thriving floriculture sector, showcasing an impressive diversity of flora and fauna, including Asia’s largest tulip garden.

J&K’s handicrafts enjoy global recognition

The handicrafts of Jammu and Kashmir (J&K) enjoy global recognition, with the traditional handicraft industry evolving into a significant economic sector. Recognizing its substantial employment generation and export potential, the government has accorded priority attention to this industry.

The region is particularly renowned for its small-scale and cottage industries, encompassing carpet weaving, silk production, shawl making, basketry, pottery, copper and silverware crafting, and walnut woodwork. These cottage handicrafts provide direct employment to approximately 340,000 skilled artisans, contributing significantly to the socio-economic fabric of Jammu and Kashmir.

The trajectory of per capita income has shown a consistent upward trend, experiencing an almost twofold increase from Rs. 74,950 in 2015-16 to Rs. 136,771 in 2022-23, signaling an overall improvement in living standards and economic well-being.

CPI inflation remained stable

Despite moderate inflationary pressures, the consumer price index (CPI) inflation remained relatively stable around 6% in recent years, reflecting prudent monetary management.

The surge in social sector expenditure from Rs. 15,721 crore in 2015-16 to Rs. 48,930 crore in 2022-23 underscores the government’s emphasis on inclusive growth and welfare programs aimed at uplifting marginalized communities.

The FDI equity inflow of $1.2 million from October 2019 to December 2023 reflects growing international interest in Jammu and Kashmir’s economic potential. This investment signifies the region’s attractiveness to foreign investors and lays the foundation for future growth. It highlights the impact of reforms and proactive policies in creating an environment conducive to businesses in the state.

Exports surge to $212 million in 2022-23

J&K’s export performance has increased significantly from $148 million in 2017-18 to $212 million in 2022-23. In the Export Preparedness Index’s category-wise ranking for small states/Union Territories, Jammu and Kashmir secured the remarkable second position, reflecting its burgeoning potential in the export markets. This positioning underscores Jammu and Kashmir’s strides in enhancing its export readiness, signaling promising prospects for economic growth and global trade engagements.

The Government of India has taken proactive steps to bolster industrial development in the Union Territory of Jammu & Kashmir, signaling a concerted effort to attract investments and stimulate economic growth. The J&K Industrial Policy 2021-30, the Industrial Land Allotment Policy, the Private Industrial Estate Development Policy, and the Policy for Promotion of Foreign Investment in the Industrial Sector are among these initiatives.

Additionally, the implementation of the J&K Single Window Rules, the Turnover Incentive Scheme, and initiatives such as the Wool Processing, Handicrafts, and Handloom Policy underscore the government’s commitment to fostering a conducive environment for industrial growth.

Appealing destination for global tourists

The breathtaking natural landscapes make Jammu and Kashmir an immensely appealing destination for tourists worldwide. The tourism sector serves as the primary engine propelling the region’s economy, offering substantial employment opportunities and fostering economic vitality, particularly in tertiary sectors.

A comprehensive Tourism Policy was formulated in 2020, envisioning, among other objectives, the creation of employment opportunities for approximately 50 thousand individuals annually and targeting an average investment influx of Rs. 2000 crore per year over the subsequent five years.

The recently unveiled budget for the fiscal year 2024-25 in the Union Territory of Jammu and Kashmir resonates with the pressing needs and aspirations of its populace, underscoring the unwavering commitment of the UT Government towards fostering peace, progress, and prosperity.

Economic development

With a primary focus on expediting economic development and fostering a multi-faceted growth trajectory, the immediate objective is to propel the Union Territory of Jammu and Kashmir towards accelerated development. The fiscal deficit for 2024-25 is estimated at Rs. 20,760 Crore, while capital expenditure is estimated at 14.6% of the GSDP. Anticipated growth in GSDP is 7.5%.

The budget delineates key focus areas encompassing good governance, bolstering grassroots democracy, nurturing holistic and sustainable agriculture practices, positioning Jammu and Kashmir as a premier investment destination, fostering employment opportunities, developing new tourism hubs, promoting accelerated development and inclusive growth, empowering women, and ensuring social inclusivity. These strategic initiatives are aimed at steering Jammu and Kashmir towards comprehensive development and equitable progress.

New wave of growth

The recent visit of Hon’ble Prime Minister Shri NarendraModi ji has injected a new wave of growth momentum, with the unveiling of ambitious projects exceeding Rs. 6,400 crore. The allocation of over Rs. 5,000 crore into the agricultural sector signifies a strategic endeavor aimed at bolstering the agri-economy of Jammu and Kashmir.

This initiative, coupled with innovative schemes, aims to empower local farmers and enhance productivity. Moreover, the successful transformation of JK Bank into a profitable institution underscores the efficacy of financial reforms, paving the way for economic stability and prosperity in the region.

The inauguration of tourism projects valued at Rs. 1,400 crore underscores the government’s unwavering commitment to tapping into the tourism potential of Jammu and Kashmir. Through initiatives such as the ‘Swadesh Darshan‘ and ‘PRASHAD’ schemes, the rich cultural heritage and scenic beauty of the region are being showcased to a global audience.

Surge in tourist arrivals

The surge in foreign tourist arrivals and the revitalizationof pilgrimage sites like Amarnath Yatra and Vaishno Devi further accentuate the growing allure of Jammu and Kashmir as a premier tourist destination.

Additionally, the establishment of modern healthcare facilities and educational institutions such as AIIMS, cancer hospitals, IIT, and IIM reflects the government’s dedication to bolstering healthcare infrastructure and fostering human capital development. This commitment ultimately contributes to the region’s overall socio-economic advancement and integration.

In light of these developments, it is evident that Jammu and Kashmir is experiencing a period of high growth, driven by proactive government policies, strategic investments, and concerted efforts aimed at unlocking the region’s immense potential.

Employment creation

The state will witness significant growth in employmentcreation in the coming times. As the Union Territory continues on its trajectory of progress and development, it holds promise for a future characterized by prosperity, inclusivity, and sustainable growth.

The table below illustrates the growth trajectory of Jammu and Kashmir: