Sources in the state's ruling People's Democratic Party (PDP) had reportedly asked him to explain his comments yesterday and retract them.
Haseeb Drabu, an economist, is known to have been pivotal in the crafting of a common agenda for the PDP-BJP alliance in the state.
This is what he said at an event in Delhi on Friday: "Those who see Jammu and Kashmir as a conflict state, as a political issue ...it's a society which has social issues right now...It's not a political issue as far as I can see, I think we are barking at the wrong tree for the last 57 years by talking about the politics of it, that the political situation has never improved. We seriously need to look at in terms of how it is a society that is in search for itself."
The 53-year-old was addressing diplomats and investors at the function hosted by the PHD Chamber of Commerce.
The comments incensed his party and also left it facing attacks from both mainstream and separatist parties, who called the statement proof of a "political sellout by PDP to stay in power".
Chief Minister Mehbooba Mufti reportedly agreed with party leaders that Haseeb Drabu had crossed the line.
PDP Vice President Sartaj Madni said the party recognizes Kashmir as a political issue and the party has relentlessly been pursuing its resolution through reconciliation and dialogue, both at internal and external levels.
Haseeb Drabu was chairman and CEO of the Jammu & Kashmir Bank from 2005 to 2010.
When the PDP-Congress coalition came to power after the 2002 elections in Jammu and Kashmir, he was appointed economic advisor.
In 2014, he formally joined the PDP and successfully contested the state elections on the party ticket from his home constituency Rajpora.