Govt Silence: J&K’s Small Industry Faces Systemic Financial Strangulation
Jammu, 26-05-2025: The Micro and Small Industrial Sector of Jammu & Kashmir is facing a severe financial crisis due to the prolonged non-disbursal of committed Government Incentives. Industrial units across the region are reeling under financial strain as pending claims under various Government schemes remain unsettled, despite repeated assurances.
The existing Micro/Small industrial Sector of J&K is starving of funds due to the neglectful attitude of the Government towards them. In the present scenario of a war-like situations, industrialists are facing significant challenges in sustaining their units due to migration of labour, lack of transportation. Despite having pending claims with the Govt. they are forced to seek extra financial assistance from the financial institutions and Private financiers to keep their units operational. This not only adds to their financial burden but also hampers their ability to invest in growth and development. In a meeting held under the chairmanship of its president Sh. Virendra Jain, attended by all the Office Bearers of AOI alongwith a large number of present members, urge the Govt. to expedite the settlement of pending claims and provide necessary support to alleviate the financial stress faced by industrial unit holders, enabling them to focus in production and growth.
The industry has expressed serious concern over the delay in releasing funds under the Turnover Incentive Scheme, SGST reimbursement, and the 3% interest subsidy announced by the Govt. as part of the J&K Special Central Package-II of 2012. While partial disbursement of the turnover incentive for the fiscal year 2021–22 i.e. 11.1% approximately of the claim of the first year, has been made, claims for the remaining periods of 2021–22, 2022–23, and 2023–24 remain pending, leading to operational disruptions and liquidity crunches.
Mr. Virendra Jain also made aware the Govt. that the unit holders have supplied material to the various Govt. departments/agencies against which the payments are pending for a long period adding woes to the micro/small industrial sector of J&K. And the treasuries have also kept the payments made by the department withheld for the reasons best known to them only.
Industrial representatives highlight that many units have duly filed GST returns and claims, but due to technical limitations and rigid implementation timelines, their claims have been unjustly rejected. This has especially impacted units relying on the SGST portion reimbursement, which has been withheld on procedural grounds.
“The justice delayed is justice denied,” said a spokesperson for the affected unit holders. “Micro and Small Industries depend solely on these special incentives to stay afloat. Non-release of these funds has triggered a financial crunch, risking closure and job losses across the region.” In light of the dire circumstances, Mr. Virendra Jain has urged the government to :
1. Expedite the disbursement of pending incentive claims.
2. Amend S.O. 70, 71 & 72 to allow consideration for delayed claims where all returns and taxes have been duly filed.
3 . Ensure timely quarterly reimbursement of SGST to support working capital needs.
Mr. Jain also drew the Govt. attention to the fact that J&K flour mills procuring raw materials, i.e., wheat, from Punjab are subjected to a “Mandi Tax of 6%” by the Punjab government, as this tax makes it difficult for the flour mills working in Jammu & Kashmir to compete with the outside suppliers. We request the reimbursement of the Mandi tax being paid by flour mills for the import of wheat from outside the J&K UT.
The Association of Industries calls upon the government to act urgently and honor its commitments to safeguard the livelihoods dependent on this vital economic segment.