Jammu and Kashmir’s GST revenues have registered a steep decline for the second consecutive month, signalling deepening stress in consumption and business activity across the Union Territory.
According to official data, the UT’s pre-settlement State GST (SGST) collections slid from ₹247 crore in November 2024 to ₹214 crore in November 2025, marking a 14 per cent year-on-year decline. The drop remains identical even after central adjustments, with post-settlement SGST falling from ₹789 crore to ₹677 crore, also a 14 per cent contraction.
The decline comes on the back of an earlier slide in October, pointing to a consistent slowdown in tax inflows.
Officials say sectors such as trade, transport, hospitality, and construction—traditionally key contributors to GST—have shown weaker activity in recent months.
Economists warn that a prolonged fall in GST collections could impact the UT’s development spending. “Two back-to-back months of negative growth reflect subdued demand and a slowdown in the local economy. This will tighten fiscal space for the administration,” said a Srinagar-based tax analyst.
Jammu and Kashmir’s performance contrasts with several larger States that posted moderate or positive growth in November. While other hill States such as Himachal Pradesh also showed contraction, J&K’s decline is among the sharpest in the northern region.
Renowned economist and former Jammu and Kashmir finance minister Haseeb Drabu told businessline that the decline could be driven by region-specific shocks and disruptions in the Kashmir Valley, while Jammu may have been affected by rate rationalisation.
Major reason
“The damage to horticulture could be a major reason. It has resulted in income losses and reduced economic activity,” Drabu said.
He said a steep drop in tourism following the April 22 terror attack may also have weighed on growth.
“I also think there has been a tapering of public expenditure. That could have contributed to the decline,” he added.
Drabu said the slowdown is unlikely to be structural, noting that Jammu and Kashmir is primarily a consumption-driven economy.
Notably, the consumption-driven states typically respond quickly once temporary shocks ease, and economic activity can recover as demand normalizes and spending picks up.
