Despite the ongoing ceasefire, the recent India-Pakistan conflict has begun to hurt Punjab’s economy, particularly in border areas like Amritsar and Jalandhar. The state, already burdened with debt, is now facing revenue losses and a slowdown in industrial growth due to the fear caused by drone and missile attacks last week.
A major concern is the mass departure of migrant workers, mainly from Uttar Pradesh, Bihar, and West Bengal, who make up a large part of Punjab’s industrial labour force. Many have left and are hesitant to return, fearing further conflict.
Industrialists are trying to stop this reverse migration by offering incentives, but efforts have seen little success. As a result, production has slowed down, leading to a drop in GST collections and state revenue. In April alone, Punjab saw a shortfall of ₹525 crore in GST and ₹228 crore in excise duty. Overall, the state’s own tax revenue declined by ₹557 crore — a 12% drop.
Officials say consumption has also reduced due to public anxiety following the Pahalgam terror attack and rising border tensions, which is expected to impact May’s GST collections too.
Business owners like Gaurav Sud of Prime Leathers in Jalandhar and Arvinder Pal Singh of Amar Singh Chawal Wala in Amritsar shared their struggles. Sud said 600 of his 1,200 workers had left, affecting order deliveries, while Singh reported that 200 workers had gone back despite bonus offers. Both said it could take a month for things to return to normal.
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