GST Council Meeting: Omar Abdullah Seeks Central Support for Jammu and Kashmir's Economy After Terror Attack

The Pahalgam terror attack has severely impacted Jammu and Kashmir's economy, prompting Chief Minister Omar Abdullah to seek assistance from the Centre. The Union Territory is grappling with a financial crisis due to a collapse in public revenues following the April 22 attack that claimed 26 lives. Abdullah, who also manages the finance portfolio, highlighted the dire situation at the 56th GST Council meeting.

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Abdullah emphasised that key economic sectors such as tourism, handicrafts, agriculture, and horticulture have been paralysed since the attack. He warned that proposed GST reforms could further decrease the Union Territory's revenue by 10 to 12 per cent. He urged for mechanisms to compensate states and UTs if rate rationalisation proposals proceed.

Impact on Key Economic Sectors

The chief minister stressed that sectors like tourism, transport, construction, and automobiles have halted since April 2025. He believes establishing safeguards for fiscal stability is crucial. Abdullah stated, "The major sectors of the economy, like tourism, transport, construction, and automobiles, have come to a standstill post April 2025."

Abdullah called for the Centre's support to address the fiscal crisis, especially considering the proposed GST rate rationalisation. He said mechanisms should ensure benefits from rationalisation reach consumers through reduced prices. "We may go ahead with the rate rationalisation proposal," he noted.

Challenges and Proposed Solutions

The chief minister highlighted how the local economy was recovering before being disrupted by the Pahalgam incident. This event has stalled major sectors including tourism and agriculture. Abdullah urged Union Finance Minister Nirmala Sitharaman's GST Council to tackle geopolitical challenges and fiscal pressures following the attack.

He discussed job losses and business declines affecting public revenues. The departure of non-local workers has slowed infrastructure projects. Abdullah fully supports a two-tier GST structure proposal but is concerned about ensuring rate rationalisation eases burdens on citizens.

National Economic Concerns

Abdullah touched on national economic issues, noting geopolitical challenges affecting growth. He pointed out colonial-era trade policies could limit India's access to 20 per cent of global markets, impacting workers in agriculture and handicrafts. "Our economy is steadily accelerating at 6–7 per cent growth rate," he said.

The chief minister asserted that GST remains India's most ambitious tax reform since its introduction in July 2017. Over eight years, steps have been taken to improve efficiency and revenue mobilisation while supporting honest taxpayers. However, whimsical trade policies threaten market access and affect thousands of workers.

Abdullah concluded by stressing these policies could deprive India of significant global market access, impacting sectors like marine products and gems. He reiterated the need for systemic safeguards to ensure proposed rate changes benefit consumers without profiteering.

With inputs from PTI