He blamed then prime minister Jawaharlal Nehru for giving a portion of Kashmir to Pakistan without taking Home Minister Sardar Vallabhbhai Patel into confidence.
Replying to a four-hour combined debate on statutory resolution extending President's Rule by six months and a Bill for reservation to residents of international border in Jammu on the lines of those living along the Line of Control (LoC), Shah adopted aggression to counter criticism by Congress and other Opposition members on the situation in the state.
He asserted that the government was determined to root out terrorism and those wanting secession of the valley from the country will live with more fear in their hearts in the coming days.
Shah also asserted that Article 370 that gives special status to Jammu and Kashmir was a "temporary" provision in the Constitution.
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The minister, who was executing his first legislative business in the House, said the government was committed to protecting the culture of Kashmir and there will be no dilution of "Kashmiriyat".
The resolution, which replaces an ordinance, was passed by the House with a voice vote after a lively discussion that saw some opposition members slamming the government for not holding assembly polls in the state with the Lok Sabha elections.
Congress leader Manish Tewari said BJP's alliance with PDP was a factor that had led to a deterioration of the situation in the state.
BJP members strongly countered the arguments and accused Congress of pursuing policies that had created problems in the state.
Shah, who is also BJP President, gave a point by point reply to the issues raised by Opposition members and also referred to party's ideology saying it has solutions to the problems of the state. It was his first major speech in Lok Sabha since assuming charge as Home Minister.
He said terrorism was sponsored by Pakistan and Modi government had taken the battle to the terror bases across the border by launching a surgical strike in 2016 and an aerial strike earlier this year in Balakot following Pulwama terror attack.
"Narendra Modi did the air strike and hit the terrorists in their house...Narendra Modi government has zero tolerance policy towards terrorism and it will continue. We are determined to root it out and we will do it with the cooperation of people," Shah said.
He said the world accepts that India's approach to security has changed.
Shah said that the matters concerning all princely states were handled by the first Home Minister Sardar Vallabhbhai Patel and Kashmir was handled by Nehru and that led to problems in the state.
He said when Indian forces were driving out Pakistani invaders in 1947-48 war but a ceasefire was called.
"Who called for ceasefire back then? It was Jawaharlal Nehru who did it and gave that portion (PoK) to Pakistan. You say we don't take people into confidence, but Nehru ji did it without taking the then Home Minister into confidence.
He rejected Opposition charge that the government was trampling democracy in the state. "Before this time, till now 132 times, Article 356 has been imposed (President's rule), out of which 93 times Congress has done it. Now, these people will teach us democracy?", he said.
He accused Congress of not holding free and fair elections in the state in its long rule and also of rigging mandates, saying it was a major factor for problems in the state.
Shah said in 1931 Muslim Conference was established led by Sheikh Abdullah and Congress did not start its unit there for long and supported Muslim Conference.
"Congress put all its eggs in Abdullah's basket but Abdullah ran away with the basket." He said that Jan Sangh founder Shyama Prasad Mukherjee ji death in the state under mysterious circumstances was not probed.
He also referred to BJP President Murli Manohar Joshi and Narendra Modi unfurling the tricolour in the Lal Chowk in Kashmir during the early nineties stating there was a time when there was no sign of India in Kashmir.
Attacking the Congress over 'tukde tukde gang', Shah said: "those who are against India should have fear in their hearts".
He outlined various development initiatives of the Modi government for the state and said the youth of the state had moved on and were availing opportunities and looking beyond rule of three families.
Outlining steps to improve the security situation in the state, he said the BJP government that banned Jamaat-e-Islami and JKLF, preventive arrests had been made, anti-India TV channels closed and requirements met of security forces.
Shah said that restoring an elected government in Jammu and Kashmir was government's top priority and Assembly elections could be held by the end of the year. The present term of President's Rule in the state is expiring on July 2. The President's Rule was implemented in the state in June last year following the collapse of the PDP-BJP alliance.
"The elections will be free and fair, there will be no interference by Centre," he said.
Shah also said that partition of India on the basis of religion was a mistake by then Prime Minister Jawaharlal Nehru.
He said that his government was following the policy of insansiyat, jamhuriyat, Kashmiriyat and said those whose policies had driven out Kashmiri Pandists were asking questions.
"Those who want peace, they will not fear. But those who have separatism at their heart, who want to separate Kashmir from India, the fear in their hearts will increase and this should happen," he said, adding "We have to into the roots and treat the problem".
In his remarks, Tewari said Congress was opposed to the extension of President's rule in the state and elections should have been held simultaneously with Lok Sabha. He said the sense of alienation in the Valley had increased over the last three years.
National Conference member Hasnain Masoodi said the state had got special status due to an agreement signed between the then ruler of the state and the Indian government and but there were remarks that it should end.
He said elections should be held in the state without delay and added that President's rule cannot be an answer to the presence of an elected government.
He said that the bill extending the reservation benefits to the residents of Actual Line of Control to those living along the IB should have been left to the state legislature to pass. The NC member said it will dilute benefits being availed by people living in mountainous areas of the state, "who face 80 per cent of shelling".
Union Minister Jitendra Singh, who is a MP from Udhampur, said he is stating with the responsibility that militancy "was on its way out" and the state "was facing last phase of militancy".
He accused the National Conference of raking up the special status issue according to its political interests.
Singh said there was a vested interest in Kashmir which did not want an end to militancy. "A terrorist is terrorist, is a terrorist," he said.
Singh said the state was an integral part of the country and the only question was about the territory occupied by Pakistan.
He said BJP was a party that stays ready for elections all the time and the poll panel has to take a decision on the date of polls in the state.
Singh also slammed Nehru's handling of the affairs of the state and said these should have been left to Sardar Patel.
Others who participated in the debate included K Raghu Rama Krishnam Raju of YSRCP, Rahul Ramesh Shewale of Shiv Sena, Kaushalendra Kumar of JD-U, Danish Ali of BSP, Faizal P P Mohammed of NCP and Asaduddin Owaisi of AIMIM.
BJP's Poonam Mahajan and Meenakshi Lekhi also spoke on the issue.
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