A CRPF jawan stands guard as situation in Kashmir continues to be tense and uncertain, in Srinagar, Sunday, Aug. 4, 2019. There are apperhenensions of prolonged law and order problem in the Valley | Photo: PTI
The proposed bifurcation of Jammu & Kashmir into two union territories could stretch Centre’s finances, but if political stability is achieved, the volatile economy could be stabilised.
The states’ GSDP
was Rs 1.6 trillion in 2018-19, and it grew 6.8% in 2017-18. But it had witnessed contraction and high growth in FY15 and FY16. Inflation
was near the national
average at 3.74% in June 2019. Its Budget size of Rs 88,911 crore is more than 50% of its GSDP.
J&K’s fiscal deficit has moved erratically in recent years, from 2% of GSDP
in 2017-18, to 12.3% in 2018-19. The FY20 projection is about 8%.