The blast occurred at a congregation of the Nirankari, a spiritual organisation, in Adliwal village of Amritsar, said deputy commissioner, Kamaldeep Singh Sangha, adding that three people were killed and several injured.
Meanwhile, Punjab Chief Minister Capt Amarinder Singh has condemned the attack on Nirankari Bhawan.
The blast reportedly took place when members of the Nirankari sect were gathered at Nirankari Bhawan at Rajasansi village near the Amritsar global airport.
Soon after the attack, the chief minister reviewed the law and order situation in the state and asked the state home secretary, director general of police, director generals, law & order and intelligence, to rush to Rajasansi in Amritsar to supervise the ongoing probe into the grenade attack, an official spokesman said here.
Amrinder Singh has also directed the police to immediately enhance security arrangements at all sensitive places in the wake of the explosion. "Because it is against a group, not an individual".
Khalistani or IS group involved?: "The way two men came and hurled grenade does indicate it could be a terror attack".
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"It (this incident) appears to be a terror angle".
Punjab was put on a high alert on Thursday (November 15) after the counter-intelligence wing of the state police reported the presence of at least half-a-dozen terrorists belonging to Pakistan-based group Jaish-e-Mohammad (JeM). "Till proven otherwise, prima facie we will take it as that", Suresh Arora said.
A witness said the attackers were wearing white clothes and had covered themselves in shawls. "My condolences to the families who have lost their loved ones in this attack and prayers for speedy recovery of the injured". "Strongest possible action will be taken against the perpetrators of this crime", he said.
He said Mr. Singh has announced ₹5 lakh as compensation to the next of kin of the deceased, and free treatment for the injured.
Indian province of Punjab has been largely peaceful for over two decades after the state's authorities brutally suppressed a violent insurgency for an independent Sikh homeland in the 1980s and early 1990s. "I believe all security agencies should stay alert and coordinate with each other to maintain peace". Punjab on High Alert: Police Issue Posters of Zakir Moosa After the Al-Qaeda Terrorist "Spotted in Amritsar".
In October, in a joint operation, the Punjab Police and the Special Operations Group of Jammu and Kashmir Police had arrested three students and busted a module of the AGH in Jalandhar. Last week, four people snatched an SUV from its driver at gunpoint near Madhopur in Pathankot district.