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Jammu and Kashmir is facing economic challenges due to multiple factors, including a revision in GST rates, severe monsoon rains, and the Pahalgam terror attack. The GST change alone is expected to reduce revenues by up to INR 1,000 crore, compounding an existing budget deficit. Agriculture and horticulture sectors were heavily affected by summer rains, while tourism suffered from security concerns after the Pahalgam incident. Chief Minister Omar Abdullah noted that while recovery will take time, the current trajectory of the economy shows signs of improvement.
Jammu and Kashmir's economy is expected to face a significant shortfall in revenue due to recent revisions in Goods and Services Tax (GST) rates. Chief Minister Omar Abdullah stated that the change alone could reduce the Union Territory's tax collection by around INR 900 to 1,000 crore this fiscal year. He emphasized that for a region already managing a budget deficit, such a loss is substantial and adds to the economic challenges. Advertisement
Abdullah highlighted that the economic situation has been further strained by natural and security-related events. Torrential rains across the Union Territory between July and September caused severe damage to agriculture and horticulture, impacting the income of farmers and related businesses. These sectors, crucial for local employment and economic stability, faced significant losses, creating additional pressure on the government's finances.
The chief minister also reflected on the Pahalgam terror attack, which not only disrupted tourism but affected the broader perception of Jammu and Kashmir. He explained that the attack created a setback in how the region is viewed as a safe and attractive destination, which has direct implications for tourism-driven revenue.
Despite these challenges, Abdullah expressed cautious optimism about the region's current trajectory. He noted that although Jammu and Kashmir experienced near-critical difficulties earlier in the year, the present situation shows improvement. He also mentioned that restoring the Union Territory's economy and its image to pre-Pahalgam levels will require sustained effort and strategic planning across sectors like tourism, agriculture, and local businesses.
Source: PTI
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