Jammu and Kashmir Tourism Department  undertakes commercial activities like construction, operation and management of accommodation facilities, running of cafeterias, restaurants, organisation of festivals and tour and travel activities in and outside the state.

Most of newly created development authorities had not finalised the master plans. Funds were diverted from one scheme to another affecting completion of projects. The plans of management and operation of assets created had also not been formulated as per a HT report.

The audit noticed delay in completion of projects, unfruitful/wasteful/idle expenditure, and of wrong reporting. Promotion of tourist products was not adequate and marketing and publicity campaigns were not adequate. The audit also noticed that state government had not formulated a comprehensive tourism policy.

The work of preparation of vision document/master plan allotted in January 2012 by the department to Tata Strategic Management Group for completion within four months, had not been completed as of June 2013. The tourism department has not conducted any baseline survey.

Instead, it took up development of tourist places without ascertaining any feasibility.
The report prepared by the central government in 2002 for preparation of a 20 year-perspective plan for sustainable tourism in Jammu and Kashmir was accepted by state government in July 2004, but neither long term (20 years); nor short term (five years) perspective plans were formulated by the state.

Despite 71% increase in tourist arrival during (1.31 crore in 2011-12) to (77 lakh in 2008-09), occupancy levels in JKTDC facilities increased only by 16% during the period. This meant the company could not keep pace of its development facilities with tourist arrivals over last five years.