One cannot solely view the issue of industrial revival in Jammu and Kashmir through the lens of attracting new investment. We must also pay equal attention to the condition of existing enterprises, many of which have been under financial stress for a long time. These units represent years of effort, local entrepreneurship, employment generation, and productive capacity. If their difficulties remain unresolved, the larger goal of economic recovery in the Union Territory may remain incomplete. In this context, the demand for a region-specific, one-time settlement framework becomes important.
The need for such a framework arises from the particular circumstances in which industrial stress has developed in Jammu and Kashmir. In many instances, enterprises have encountered challenges beyond ordinary commercial hurdles. Prolonged disruptions, uncertainty, and conditions that affected production, operations, and repayment capacity over time have also shaped the difficulties faced by enterprises. Because of these factors, a standard approach to debt resolution may not be sufficient. We need a more flexible and sensitive framework that takes into account the region’s unique economic situation and gives everyone a fair chance to recover. In principle, the One-Time Settlement scheme introduced in 2024 was a welcome step, but its scope remained limited. By setting upper thresholds and restrictive eligibility conditions, the scheme left out a significant section of borrowers, including some of the more established industrial units. This has created concern because many of these enterprises have larger asset bases, wider economic linkages, and greater employment potential. Their revival could contribute meaningfully to the overall economy, yet they continue to remain outside the present relief structure. Therefore, a broader framework is necessary to enhance the effectiveness and credibility of the revival idea. In this discussion, the role of J&K Bank naturally becomes important. As the lead bank with a strong regional presence, a substantial local deposit base, and significant lending within the Union Territory, it occupies a central place in the economic life of Jammu and Kashmir. The same region whose enterprises are currently under financial stress contributes significantly to its strength. This relationship creates a wider developmental responsibility. Stakeholders believe that a more responsive debt-settlement mechanism would not simply provide relief to borrowers but would also support the region’s broader economic stability and restore confidence in the institutional system. Another important issue is the cost of borrowing. For years, many enterprises in Jammu and Kashmir have reportedly serviced credit at rates higher than national benchmarks, often because of perceived market risk. Over time, this has added significantly to their debt burden and has contributed to the stress reflected in non-performing accounts. When this is viewed alongside the fact that the bank’s deposit base is also deeply rooted in the same region, the case for calibrated concessions under a Special One-Time Settlement framework becomes stronger. The purpose of such an intervention would not be to offer undue favour, but to provide a fair and workable path towards restoring viability. The timing of this debate is also important because a new industrial policy is expected to shape the next phase of development in Jammu and Kashmir. A policy that speaks of revival and future growth must also address the unresolved burden of existing enterprises. Without a parallel debt-resolution mechanism, the vision of industrial revival may remain only partial. Existing units need either a practical route to recovery or a dignified settlement that allows them to move forward. Only then can the larger policy direction become balanced and meaningful.
A well-designed, region-specific Special One-Time Settlement can help clear legacy stress, restore borrower confidence, and bring financially impaired units back into the economic cycle wherever possible. It can also strengthen the health of the banking system while supporting the larger developmental goals of the Union Territory. More than a banking measure, it can serve as an instrument of economic healing. If Jammu and Kashmir is to move towards sustainable industrial growth, then its existing enterprises must not be left behind. Their revival is not separate from the future. It is an essential part of it.