The Union Territory of Ladakh owes Rs 2,504.46 crore to Jammu and Kashmir as its share of liabilities arising from the bifurcation of the erstwhile State of J&K in August 2019. The Centre on Monday formally sanctioned this amount, with the Lok Sabha approving it as additional expenditure for Ladakh for transfer to Jammu and Kashmir.
The approval came through the Supplementary Demands for Grants for the financial year 2025–26, presented by the Union Finance Ministry. The sanctioned amount will be transferred to Jammu and Kashmir on account of the apportionment of liabilities between the two Union Territories, which were part of the undivided State before its reorganisation.
According to the liability-sharing formula worked out by the Centre, two per cent of the total liabilities of the erstwhile State of Jammu and Kashmir—amounting to Rs 2,504.46 crore—were assigned to the Union Territory of Ladakh. This liability is now being met through the approved transfer.
In addition, the Finance Ministry has sanctioned Rs 20.14 crore as additional expenditure for Ladakh for transfer to Jammu and Kashmir towards the construction of the High Court complex at Jammu.
The supplementary grants also include Rs 340.15 crore to meet additional expenditure towards equity contribution for two major projects linked to Jammu and Kashmir. Of this, Rs 154.81 crore has been earmarked as equity contribution for the 624 MW Kiru hydroelectric project, while Rs 185.34 crore has been allocated for the Jhelum Tawi Flood Recovery Project (JTFRP), which is an externally aided project.
Separately, the Finance Ministry enhanced the budget allocation for Ladakh by Rs 148.64 crore for the two Autonomous Hill Development Councils—Leh and Kargil. While the Kargil Hill Council is currently functional, the Leh Hill Council ceased to exist in October this year due to the delay in holding elections, with its powers presently vested in the Deputy Commissioner, Leh.
Following the abrogation of Article 370 and the reorganisation of Jammu and Kashmir, the Government of India had constituted a three-member committee headed by former Defence Secretary Sanjay Mitra, with retired IAS officer Arun Goyal and retired ICAS officer Giriraj Prasad Gupta as members. The committee was tasked with working out the distribution of assets and liabilities between the two Union Territories under Sections 84 and 85 of the Jammu and Kashmir Reorganisation Act, 2019.
The committee’s recommendations form the basis of the present financial transfers approved by Parliament.
