Rahul Sahai Leads PHDCCI Delegation to Address Critical Issues in NCSS-2021 Implementation for J&K

Jammu : Rahul Sahai, Chairman of the PHD Chamber of Commerce and Industry (PHDCCI) Jammu, recently spearheaded a delegation to meet with Shri Balamurugan D, IAS, Joint Secretary of the Department of Promotion of Industry and Internal Trade (DPIIT), Government of India. The meeting focused on the critical implementation of the New Central Sector Scheme for Industrial Development of Jammu and Kashmir (NCSS-2021) and addressed concerns regarding proposed changes to the scheme.

During the meeting, the delegation, which represented various sectors of Jammu & Kashmir’s industrial and service landscape, presented a comprehensive memorandum highlighting their growing apprehensions about the shift from Gross GST to Net GST under NCSS-2021. Sahai expressed serious concerns, indicating that these proposed changes could significantly threaten the viability of both existing and upcoming projects in the region.

He explained that NCSS-2021 was introduced post-abrogation of Article 370 to help offset the higher production costs associated with logistical hurdles, labor expenses, and challenges related to land acquisition. The scheme has successfully attracted both large and small investors, contributing to job creation and economic development in J&K. However, Sahai cautioned that reducing incentives could undermine the scheme’s original objectives. Industries characterized by low-value additions or inverted duty structures would be particularly susceptible, which could lead to business closures and deter future investments. Sectors such as pharmaceuticals, which rely heavily on the original incentive framework, would face significant challenges if these changes were enacted.

As the application deadline approaches, many businesses in Jammu & Kashmir are still working to secure essential infrastructure, including land, power, and water. With an anticipated 680-700 applications from the Jammu division alone by September 30, 2024, Sahai urged the government to extend the application deadline to accommodate businesses that have made significant investments but are still awaiting registration. He emphasized that without this extension, nearly 50% of applicants could miss out on crucial incentives, especially given the scheme’s estimated liability of ₹1 lakh crore.

To address these pressing concerns, the PHDCCI delegation put forth several recommendations:

1. 1. Retain Original GSTLI Incentives: Continue offering 300% of capital investment under the GSTLI for a decade to ensure project viability.
   2. Extend Application Deadline: Provide an extension for submitting applications under NCSS-2021, particularly for businesses that have already invested significantly.
   3. Increase Budget Allocation: Allocate additional funds to guarantee that all eligible applicants receive the promised incentives.
   4. Implement a Flexible Capping Mechanism: If capping the GSTLI is deemed necessary, develop a system that safeguards MSMEs and accommodates applications submitted by the September 30, 2024 deadline.
   5. Review FIFO System: Ensure that units with false documentation are deprioritized in the clearance process, allowing genuine applicants to benefit from the scheme.

In closing, Rahul Sahai underscored the importance of maintaining investor confidence in the government’s commitment to fostering industrial growth in Jammu & Kashmir. He reiterated that preserving the NCSS-2021 scheme in its original form is vital for the region’s economic development and long-term prosperity.