The state's deputy chief minister, Pandit Mangat Ram Sharma, who escaped unhurt, has demanded a probe into the attack at a rural fair in Kapran Dooru, a remote valley in southern Aanantnag district, on Monday.
It appears to have been the second attempt on Sharma's life in a week. On 13 July, his motorcade came under a rifle grenade attack in the state's summer capital, Srinagar.
Sharma said he suspected an improvised explosive device was planted beneath the podium he and other ministers had been standing on earlier.
Police, however, said rebels fighting Indian rule over the disputed Himalayan state hurled a grenade at the meeting.
No responsibility claim
Among those killed was the chief engineer for roads and buildings and the private secretary to Kashmir's power minister Muhammad Sharif Niyaz, who was himself injured in the blast.
Indian soldiers come under daily
attack in Kashmir
Also injured were the minister of state for roads and buildings, Gulam Ahmad Mir, several top administration and police officials, and two senior leaders of the Congress party.
Congress runs a coalition government in Indian-administered Kashmir, along with the regional Peoples' Democratic Party and some smaller groups.
The seriously injured officials and civilians were airlifted to Srinagar by helicopters to receive specialised treatment at local hospitals.
Chief minister Mufti Muhammad Sayyid expressed shock and concern over Monday's incident and asked the police to launch a manhunt for those responsible.
Mujahidin commander killed
None of the Kashmiri groups fighting Indian rule has so far claimed responsibility for the attack.
Meanwhile, a top commander of Kashmir's major fighting group, the Hizb al-Mujahidin, and five other rebels have been killed in renewed clashes with Indian security forces across the state.
The slain fighter was identified as Bashir Ahmad Parray.