SRINAGAR: The Kashmir Chamber of Commerce and Industry (KCCI) has reacted to the Union Budget 2025-26 with a mix of optimism and concern, acknowledging several positive measures while emphasising the urgent need for a special revival and infrastructural development package for Jammu and Kashmir.
KCCI has voiced its disappointment over the absence of a dedicated economic revival package for the region, particularly in light of its prolonged economic distress spanning over three decades. The chamber had anticipated a 20 per cent increase in central allocation, but instead, central assistance has been reduced by over Rs 1,000 crore. This shortfall raises serious concerns about Jammu and Kashmir’s development trajectory.
A key expectation of KCCI was the introduction of an industrial development package to boost local industries and transform the region into a thriving industrial hub. The chamber believes such a package is crucial not only for fostering economic growth in Jammu and Kashmir but also for aligning with India’s broader ambition of becoming the world’s third-largest economy.
Among the positive aspects of the budget, KCCI welcomed the increase in income tax exemption to Rs 12 lakh, which is expected to benefit middle-class citizens by increasing their disposable income and stimulating consumer spending. Additionally, the chamber lauded the government’s new scheme targeting five lakh first-time entrepreneurs, particularly focusing on women, Scheduled Castes, and Scheduled Tribes. The provision of term loans up to Rs 2 crore over the next five years is seen as a crucial step towards fostering entrepreneurship and economic diversification.
The chamber also appreciated the proposal to increase the credit guarantee cover for Micro and Small Enterprises (MSEs) from Rs 5 crore to Rs 10 crore and for startups from Rs 10 crore to Rs 20 crore. These measures are expected to strengthen the financial stability of local businesses and encourage entrepreneurship in the region.
One of the longstanding demands of KCCI, the extension of the export time frame for handicraft goods from six months to one year with a possible three-month extension, has finally been addressed. The chamber believes this will provide much-needed relief to exporters and boost Jammu and Kashmir’s handicraft sector.
KCCI also welcomed the introduction of customised credit cards for micro-enterprises registered on the Udyam portal, with a limit of Rs 5 lakh, as well as the exemption of interest on senior citizens’ savings. These initiatives are expected to provide essential financial support to businesses and individuals, contributing to sustainable economic growth.
The chamber noted the budget’s emphasis on the agricultural sector, particularly through the Prime Minister Dhan-Dhaanya Krishi Yojana, which aims to develop Agri Districts and benefit approximately 1.7 crore farmers. KCCI believes that a thriving agricultural sector will positively impact related industries, including handicrafts, thereby creating a more robust economic ecosystem.
Furthermore, the budget’s provisions, such as the increase of 10,000 medical seats, an additional 7,500 seats in Industrial Training Institutes (ITIs), the availability of 36 cancer drugs free of charge, Mudra loans for homestays to boost tourism, and tax exemptions on senior citizens’ savings interest, have been recognised as positive steps towards enhancing the quality of life and economic prospects in the region.
Despite these progressive measures, KCCI remains firm in its demand for a special economic revival package to address the unique challenges faced by Jammu and Kashmir, particularly in tackling its high unemployment rate. The chamber continues to advocate for targeted policies that will ensure sustainable economic growth and prosperity in the region.
