REVIVE INDUSTRY, EMPOWER J&K

As a region, Jammu and Kashmir has its own set of problems when it comes to economic development and growth; thus encouraging domestic industry has long been a priority. Several delegations have recently made concerted attempts to meet with government and important government officials, delivering detailed plans to stimulate the economy, create jobs, and alleviate financial strain on industrial enterprises that are suffering.

One of the most significant issues highlighted during these discussions was the critical necessity for a revised industrial policy that effectively caters to the distinct requirements of both new and existing industries. The industries in Jammu and Kashmir have encountered a myriad of challenges, especially following the abrogation of Article 370, which resulted in a reduction of the fiscal incentives that were once accessible. This action led to a significant decline in backing for established industrial units, jeopardizing numerous operations and resulting in the downsizing of a considerable workforce. The shift in policy has resulted in local industries grappling to maintain competitiveness against neighbouring states that persist in providing more advantageous conditions for industrial growth. In response to these crises, multiple delegations from organizations such as the Associated Organizations of Industries (AOI), Federation of Industries Jammu (FOIJ), ASSOCHAM, CCI (Jammu Chamber of Commerce and Industry), Indian Chamber of Commerce (ICC) Jammu Chapter, Confederation of Indian Industry (CII) J&K Council, and the PHD Chamber of Commerce and Industry (PHDCCI), among others, have made a concerted effort to engage with the Jammu and Kashmir government. The primary objective of these delegations has been to promote policy alterations that would offer equitable advantages to both emerging and established industries. The representatives emphasized the necessity of an inclusive industrial policy for the region that does not prioritize new units above existing ones. This approach will enable local enterprises to endure and expand, thus securing the long-term viability of Jammu and Kashmir’s industrial ecosystem. A significant proposition arising from these meetings was the reimbursement of fiscal incentives commensurate with pre-GST levels. Prior to the implementation of the Goods and Services Tax (GST) regime, industries in Jammu and Kashmir benefitted from various tax exemptions, including VAT remission, CST, toll tax exemptions, and refunds on central excise duty. These incentives were crucial in sustaining industries and maintaining their competitiveness. The elimination of these benefits following the implementation of GST has significantly affected micro and small enterprises. By resuming these fiscal benefits, the government might provide essential financial assistance, enabling industries to recover and persist in contributing to the region’s economic growth. Alongside fiscal incentives, the delegates advocated for more budgetary support for turnover incentives. The current budget for industrial sectors is limited to Rs. 50 crore, a figure that is very insufficient considering the magnitude of the issues confronting these business enterprises. Delegations have sought a significantly increased amount, with suggestions reaching as high as Rs. 2000 crore. An augmentation in funding would not only support existing industries but also attract new investments, cultivating a more resilient, diverse industrial base. The representatives emphasized the significance of supporting local entrepreneurs. Local entrepreneurs are essential for stimulating economic growth and generating employment opportunities in Jammu and Kashmir. Nevertheless, they encounter considerable obstacles, especially with financial access and land acquisition for expansion. The delegations have promoted the transformation of leasehold rights into freehold rights for existing industrial units, allowing entrepreneurs to leverage their assets for financial assistance. This action would enhance capital accessibility and furnish entrepreneurs with the stability and security necessary for business expansion. Furthermore, the delegations recommended various incentives designed to facilitate the growth and extension of existing industrial units. This includes providing incentives for industrial expansion and market support to established businesses. It was proposed that the GeM (Government e-Marketplace) portal, which primarily facilitates the procurement of products and services by government entities, should enhance its inclusivity of locally manufactured items. This will provide local industries with an essential platform to broaden their market reach and compete equitably with larger national enterprises. Infrastructure development was another critical area highlighted by the delegations. The state of industrial estates managed by SICOP (State Industrial Development Corporation) and SIDCO (Jammu and Kashmir Small Scale Industries Development Corporation) was a point of concern. Delegates requested additional funds to improve the infrastructure in these estates, which have been lagging behind in terms of basic facilities and upkeep. The dual charges imposed by SICOP and SIDCO for the development and maintenance of industrial estates were also criticized. These charges have placed an additional financial burden on businesses, which are already struggling to cope with limited resources. In addition to these broader concerns, sector-specific issues were also raised. For instance, the delegations raised the issue of raw material procurement for cricket bat industries, which are predominantly based in rural areas. These industries face challenges in sourcing quality raw materials, which in turn affects production capacity and quality. There was also a call for the extension of licenses for band saws used in these industries, as these tools are essential for the manufacturing process. Addressing such sector-specific challenges would help ensure that industries in Jammu and Kashmir are able to compete effectively and sustainably. The delegation also made a compelling case for a power amnesty and tariff freeze for industrial units in Jammu and Kashmir. Many businesses have accumulated power arrears, and the high cost of electricity continues to be a major burden. The request for a five-year freeze on power tariffs and the removal of edible oil industrial units from the negative list would provide much-needed financial relief to industries struggling with high operational costs. In addition to these fiscal and infrastructural measures, the delegations sought representation in SICOP’s Board of Directors to ensure that the interests of micro and small-scale industries are adequately represented. By having a seat at the table, these industries would have a stronger voice in shaping policies and ensuring that their needs are addressed in future decision-making processes.

The Lt. Governor, Chief Minister, and Deputy Chief Minister of Jammu and Kashmir who met with the delegations expressed their appreciation for the efforts made by these organizations and assured them of the government’s commitment to resolving the issues raised. They emphasized that the government would review the proposals in detail and take necessary steps to create a more conducive environment for industrial growth. This assurance has sparked optimism among the business community, with many believing that the government is finally beginning to recognize the importance of supporting local industries and entrepreneurs. The government must recognize that the industrial sector, particularly micro and small industries, is the backbone of Jammu and Kashmir’s economy. These industries not only provide employment to hundreds of thousands of individuals but also contribute significantly to the region’s GDP. Failing to address their concerns now will only result in the decline of local industries, leading to job losses and economic stagnation. The proposals put forward by the delegations are not just requests for financial aid; they represent a roadmap for ensuring that the industrial sector of Jammu and Kashmir remains competitive, resilient, and capable of adapting to the changing economic landscape.

It is time for the government to act decisively and adopt a policy that supports all industrial units—new and existing alike. The upcoming budget presents an opportunity to address the disparities that have long existed in the region’s industrial policies. The government must make it clear that it is committed to fostering an environment that is equally conducive to both the growth of new industries and the survival of existing ones. This balanced approach will not only ensure the long-term success of Jammu and Kashmir’s industrial sector but will also lay the foundation for sustained economic growth, job creation, and prosperity for the people of the region.

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