Jammu and Kashmir Chief Minister Omar Abdullah’s meeting with Union Finance Minister Nirmala Sitharaman this week comes as the Union Territory faces growing fiscal pressure, declining tax revenues and a slowdown in tourism following the April 22 Pahalgam attack.
Officials familiar with the discussions said Abdullah sought additional central assistance to help the administration manage mounting financial constraints, amid shrinking revenues and rising expenditure commitments.
Official figures show Jammu and Kashmir’s Goods and Services Tax (GST) collections fell to ₹551 crore in October 2025, a 9 per cent decline from ₹608 crore in the same month last year. Abdullah said at the Federation of Indian Chambers of Commerce and Industry (FICCI) event in Srinagar last month that revisions in GST rates were likely to reduce the UT’s revenue by up to ₹1,000 crore this fiscal.
Following his meeting with the Finance Minister, J&K Chief Minister’s office posted on X, “The meeting focused on strengthening infrastructure, boosting investment and ensuring continued financial support for welfare-driven initiatives in J&K”.
A senior official said the GST dip is significant, and the UT’s own tax base is not expanding fast enough. “The CM pressed for sustained central support”, he added.
Tourism, a major driver of local economic activity, declined following the terror attack in Pahalgam earlier this year. Hotel operators said bookings fell noticeably in the weeks after the attack, and the usual autumn uptick did not fully materialise.
“Tourist flow in October and November remained much low ,which impacted various sectors, especially trade, hospitality and transport”, Qazi Tauseef, spokesperson of the Kashmir Economic Alliance (KEA) told businessline.
He, however, expressed hope to see better days ahead for the tourism sector.
“Bookings for the upcoming winter season have already begun to pick up and stakeholders across the sectors are fully prepared to welcome tourists”, Tauseef said.
A slowdown in tourism-linked transactions has further weighed on service-sector GST. Economists say J&K’s limited internal revenue capacity, combined with regulated borrowing ceilings, makes it reliant on central grants to fund infrastructure projects and welfare schemes.
“Until tourism stabilises and GST collections recover, financial pressures are likely to persist,” said a Srinagar-based economist.
The Finance Ministry has not issued a statement on the CM’s request, but officials said discussions on additional support are expected to continue in the coming weeks.
