On Wednesday (September 3, 2025), highlighting the disastrous impact of the Pahalgam terror attack on the economy of Jammu and Kashmir, Chief Minister Omar Abdullah demanded the Center’s support to deal with the situation.
The Central Region (UT) was facing a serious fiscal crisis as its public revenue was “collapsed” after the April 22 terror attack in which 26 people were killed, he said.
Mr. Abdullah, who also holds the finance portfolio, told the 56th GST Council meeting in Delhi that major economic sector including tourism, handicrafts, agriculture and horticulture came into a halt after the attack.
The Chief Minister said that proposed GST reforms can reduce UT’s revenue by 10 to 12%.
He thought that the GST Council may proceed with the rationalization proposals, but the states as well as the UTS should also be prepared for compensation.
The support of the Center was important to Jammu and Kashmir to deal with the fiscal crisis, Mr. Abdullah insisted.
“Major sectors of the economy such as tourism, transport, construction and automobiles have come in a standstill post after April 2025. The proposed improvement can reduce our GST revenue by 10–12%.
He said, “Therefore, as the Finance Minister of Jammu and Kashmir, I am of the opinion that the installation of the system suitable and safety measures suitable for fiscal stability of states and UT is important,” he said.
He highlighted the disastrous impact of the event on the UT’s economy and called for the support of the Center to deal with the situation, especially in view of the proposed GST rate rationalization.
He said, “We can proceed with rate rationalization proposals, while their fiscal stability prepares a mechanism to compensate the states/UT and build security measures to translate rationalization in low prices for the people of our country,” he said.
Mr. Abdullah said that GST reforms should consider unique challenges faced by individual states and UTS.
He expanded that the local economy had renewed strictly before “surprised” by the “Pahgam incident” of April 2025. This phenomenon, and after that, the major economic fields include tourism, handicraft, horticulture and agriculture – in a standstill.
The Chief Minister urged the Chief GST Council of Union Finance Minister Nirmala Sitarman to address serious fiscal pressures on their territory after “geopolitical challenges” and terrorist attacks in front of the country.
He talked about adequate losses of jobs and businesses and decline in public revenue. “Today, all areas of economic activities including tourism, handicraft, horticulture and agriculture are badly affected. The flight of non-local workers has slowed down the development of infrastructure projects,” the Chief Minister said.
Supporting the two-level (5 and 18%) GST structure proposal, the Chief Minister said, “My main concern is how we ensure that this rate rationalization reduces the burden on the common man and makes these specific items and services more affordable to the people of our country.”
“These often lead to classification disputes, inverted duty structures and compliance complexity. The recommendations and union proposals of ministers deal with these distortions to a large extent and aims to reduce such abode. For business and industries, for business and industries, they will bring clarity, reduce litigation, and will increase compliance. So I welcome.
“We require systemic safety measures to assure that changes in the proposed rate provide major benefits to consumers and not in the chain. There should be no scope for profiteering from rationalization,” said Mr. Abdullah.
The Chief Minister also touched national economic issues, given that the development route of the country has been “suddenly challenged by geopolitical challenges” and he also pointed to “the colonial era’s eccentric trade policies”, which he said that he could restrict access to 20% of India’s global market, which affects thousands of workers in areas such as agriculture, handicrafts, and jaundice.
Saying that the GST introduced in July 2017, the most ambitious federal tax reform in India’s fiscal history remains that through these eight years, many steps and initiatives have been taken to improve the structure, administrative system and technology to improve efficiency and revenue raising revenue from GST, as well as to facilitate the honest taxpayer and dealer.
“Last year, nothing has been challenging for Jammu and Kashmir and the entire nation. At the national level, we see that our development path has been suddenly challenged by geopolitical challenges.
“Our economy is intensifying at the growth rate of 6-7% continuously. We have increased our export competition and increased our share of global markets in goods and services.
He said, “Our foreign exchange reserves had quadruple $ 660 billion in the last two decades. But today we seek the reach of our market to be severely forced by the colonial era’s eccentric trade policies,” he said.
The Chief Minister said that these policies will deprive us of about 20% of the global market and will seriously affect thousands of workers and entrepreneurs in agriculture, handicraft, marine products, gems and jewelery areas.
Published – 03 September, 2025 08:41 pm IST