25-09-2023 : The Bari Brahmana Industries Association (BBIA) has expressed deep concern over the apparent neglect of critical issues facing the Micro, Small, and Medium Enterprises (MSME) sector in the Union Territory of Jammu and Kashmir. BBIA President Lalit Mahajan has called upon both the Union Government and the UT Administration to take immediate and decisive action to safeguard the survival of the existing industrial base in the region.
In a press statement, Mr. Mahajan highlighted the pivotal role that the MSME sector has played in providing employment opportunities to the local youth of Jammu and Kashmir. This journey began in 1960 when Small Industrial Estates were established in both Jammu and Kashmir Divisions, further expanding to include regions such as Gangyal, Bari Brahmana, Samba, Kathua, and Udhampur. Additionally, the Kashmir Division witnessed the establishment of Industrial Estates. These endeavors were supported by granting 90-year leasehold rights to both local and external investors, with fiscal incentives being offered to new and expanding units by the State and Central Governments at various intervals.
Mr. Mahajan emphasized that, until July 2019, approximately 4 to 5 lakh individuals were directly or indirectly employed in the industrial sector, and these enterprises functioned smoothly. Furthermore, they enjoyed the privilege of price preference and procurement preference for local MSME units in supplying goods to State Government departments. However, after the abrogation of Article 370 in August 2019, a significant shift occurred, mandating State Government departments to procure goods exclusively through the Government e-Marketplace (GeM) Portal. This abrupt change posed a serious threat to the survival of local MSME units, as the previously enjoyed price and purchase preferences were withdrawn. Consequently, the sales performance of these units, which supplied goods to State Government departments and the Small Industries Development Corporation (SICOP) for items reserved for the Small Scale Industries (SSI) sector, witnessed a sharp decline.
Mr. Mahajan further pointed out that in 2021, the Industries Department introduced the Turnover Incentive as a form of support to existing units operational as of March 31, 2021, with an initial budget allocation of Rs 50 crores per annum. However, claims for the Financial Year 2021-22 from existing units amounted to Rs 206 crores. Regrettably, the Industries Department declined to augment the budget to accommodate this additional requirement of Rs 156 crores. This decision has understandably stirred significant dissatisfaction among the MSMEs operating in the Jammu Division.
Moreover, the Government introduced a new Central Sector Scheme in 2021 that offered fiscal incentives in the form of reimbursement of 300% Gross GST equivalent to the value of investments in Plant and Machinery. Unfortunately, this incentive did not extend to existing units as of March 31, 2021, looking to engage in substantial expansion, additional items, or changes in their line of activity. These stringent measures have cast a shadow of uncertainty over the minds of unit owners, potentially leading to the closure of existing units and, consequently, mass-scale layoffs in the near future.
In light of these pressing challenges, the BBIA President stressed the immediate necessity of extending fiscal incentives to existing units and those embarking on substantial expansion. The survival of the existing MSME sector in Jammu and Kashmir hinges upon the proactive intervention of authorities to protect and revitalize this vital economic engine.
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