The dynamics of shift among different land-use classes has been studied in the state of Jammu and Kashmir. A significant decline has been observed in the total reported area, which necessitates a proper land-use survey through remote sensing. A declining trend has also been observed in the area under forests. The unfavourable increasing trends in the area put to non-agricultural uses and barren and unculturable land are likely to have serious implications on ecological balance. Inter-sectoral land budgeting analysis has revealed that shifts in area are occurring from desirable ecological towards undesirable ecological sector. The estimates of regression analysis have revealed that the net irrigated area, literacy and area not available for cultivation have significantly improved the cropping intensity in the state agriculture, whereas agricultural density and area under rice are significant determinants of current fallow lands. The study has emphasized on the evolution of suitable institutional mechanism for scientific management, conservation and development of land resources in the state.