In a significant move aimed at bolstering the economy of the Union Territory of Jammu and Kashmir, Finance Minister Nirmala Sitharaman proposed an interim budget of Rs.1.18 lakh crore for the fiscal year 2024-25. This budget, amounting to approximately $14 billion, signifies a robust commitment to the region's development.

The interim budget outlines a fiscal deficit of Rs.20,760 crore and anticipates a growth rate of 7.5% in the Gross State Domestic Product (GSDP). Capital expenditure for the fiscal year is set at Rs.38,566 crore, constituting 14.64% of the GSDP.

This move comes at a time when neighboring Pakistan is grappling with economic challenges. While Pakistan has secured a $3 billion bailout package from the International Monetary Fund (IMF), India's allocation to Jammu and Kashmir dwarfs this amount, standing at approximately 4.5 times more. Pakistan's ongoing economic woes have prompted the IMF to extend assistance, with the second tranche of $700 million recently approved.

Finance Minister Sitharaman unveiled the interim budget on the same day Pakistan observed "Kashmir Solidarity Day," underscoring India's commitment to the economic development of the region.

Sitharaman highlighted the transformative reforms initiated in 2019, which paved the way for decentralization of governance, inclusive development, enhanced revenue generation, and infrastructure advancement in Jammu and Kashmir. She emphasized the government's unwavering commitment to maintaining law and order while simultaneously driving economic and social progress, with a zero-tolerance policy against terrorism.

Moreover, the Minister asserted that security measures have substantially improved the situation, with security forces effectively countering terrorism.

Meanwhile, Pakistan received a boost from the IMF with the approval of a $700 million loan tranche as part of a $3 billion bailout package. This follows the completion of the first review of Pakistan's economic reform program by the IMF's Executive Board.

With this disbursement, the total assistance under the Stand-By Arrangement amounts to $1.9 billion, out of the total $3 billion program. The completion of the first review signifies progress in Pakistan's economic restructuring efforts, with further reviews slated for the future.

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