The Jammu and Kashmir power sector inflicts severe damage through a ₹28,000 crore borrowing burden for power purchase liabilities—roughly one-fourth of the ₹1,12,310 crore net budget for 2025-26. This debt, accumulated from high AT&C losses and massive imports, pushed public debt from 48% of GSDP in 2015-16 to 52% in 2023-24.
Official figures expose the crisis: under-recoveries fell slightly from ₹6,552 crore (2022-23) to ₹5,244 crore (2023-24), targeting ₹4,200 crore in 2024-25, yet annual power purchase costs exceed ₹8,200 crore, forming 87% of sector outgo. For 2025-26, projected purchase stands at ₹5,924 crore against revenue of just ₹2,689 crore at current tariffs, creating a ₹4,136 crore deficit. Local hydro generation dropped 70% due to low river flows, compelling 3,000 MW imports at high rates. Own revenues meet only 25-30% of requirements, while salaries, pensions, and debt eat 60% of expenditure.
Government claims of repayment ring hollow—LG Sinha’s 2024 assertion of clearing ₹28,000 crore legacy dues masks refinancing, not elimination, perpetuating the cycle. The Omar Abdullah administration admits fiscal strain in 2026-27 budget speeches but delivers no decisive action: metering reforms crawl, losses persist from theft and inefficiency, and hydro potential (20,000 MW total, only ~3,400 MW harnessed) remains untapped despite promises of 7,500 MW addition over a decade.
This administration prioritizes excuses over fixes—central grants (₹41,000 crore) prop up the system, while people endure shortages in Jammu and Srinagar. Austerity fails; no bold privatization, aggressive loss reduction, or accelerated local generation materializes. Instead, the debt trap deepens, mortgaging development for power imports.
J&K’s GDP, projected at ₹2,88,422 crore for 2025-26, deserves rescue from this mismanagement. Accountability demands radical change: enforce collections, curb theft, harness rivers urgently. Without it, this ₹28,000 crore millstone will strangle progress and burden generations.
