The budget also makes provision for regularisation of nearly 5,000 daily wagers who have completed seven years of service in various state government departments.
The salaries of doctors serving in the remote and far-flung areas of the state have been doubled.
The budget proposals would generate additional employment in the government departments to absorb nearly 29,000 unemployed young men and women.
Mehbooba Mufti, the president of the opposition Peoples Democratic Party, termed the budget proposals of the government as 'directionless'.
She said the proposed increase in the cost of petrol and diesel would result in the price increase of all essential commodities in the state.
The opposition Bharatiya Janata Party (BJP) has also criticised the budget.