While the government says it has been 'delayed', a senior home ministry official confirmed that it had been put on the hold for the moment.
The decision comes at a time when tensions between the two countries are high, particularly after two Indian soldiers were killed on the line of control on January 8 and one of the jawans beheaded.
At his monthly briefing last week, Shinde had said that the agreement would be operationalized but there has clearly been a rethink in government circles and it has been put on hold.
The MHA was not willing to specify a date on which it might be kickstarted in the future.
"The ministries of home and external affairs still have to finalise the list of documentation required for visas on arrival at the border," a home ministry official said, but given that preparations had been made to stamp visas on arrival at Wagah border.
The decision clearly has a lot to do with the tensions along the LoC and Monday's flat meeting in Poonch, where Pakistan continued to stick to its stated position that it had not killed and mutilated bodies of Indian soldiers.