Poonch district development commissioner Ajit Kumar Saue said a financial crunch has caused a delay in the construction of the building.
"It is not the case that the administration is not taking any interest. We require more funds. We have utilised the available funds for developing medical facilities," he said.
"As soon as more funds are released, we will complete the emergency block. We will complete it by this year's end or by next year," he added.
Mohammad Shareef, a local resident, said: "When there was an earthquake, the hospital was heavily damaged. From 2005 until today, a new building has been constructed, but still the emergency sheds are the same as they were during the time of the earthquake."
"The situation is so grave, that the doctors who come here have to sit in sheds and examine patients. If an accident occurs, they do not know how to handle it, despite this being a district hospital," he added.
The earthquake that struck the state in 2005 damaged almost a thousand houses, besides the 155-year old Poonch Fort and Moti Mahal.