INDUSTRIAL HOPES ON HOLD

The New Central Sector Scheme (NCSS-2021), notified with great promise, was meant to provide a level playing field to prospective investors, stimulate job creation, and ensure equitable industrial development across the Union Territory. Yet today, the scheme stands at a critical crossroads, its initial promise overshadowed by exhausted fiscal allocations, delayed registrations, and growing uncertainty among hundreds of local entrepreneurs who stepped forward in good faith.

The most immediate challenge is the exhaustion of funds under NCSS-2021, with the Industries Department’s request for an additional ₹40,000 crore still awaiting clearance from the Department for Promotion of Industry and Internal Trade (DPIIT). Nearly 579 units, representing investments of more than ₹17,000 crore and employment potential for approximately 54,000 youth, remain in limbo. Many of these entrepreneurs have already purchased machinery, created infrastructure, and in some cases even commenced production, yet they find themselves stranded without registration or access to the fiscal benefits promised by the scheme. This has created a crisis of confidence that could discourage further investment in the region. What adds to the unease is the skewed distribution of incentives. Data suggests that nearly 67 percent of allocations under NCSS-2021 have gone to only 3 percent of large-scale industrial units, while the remaining 97 percent of applicants, largely micro, small, and medium enterprises (MSMEs), have been left with just 33 percent of funds. Such disparity undermines the very foundation of inclusive growth, particularly when MSMEs have historically carried the burden of sustaining local economies in times of uncertainty. The resentment brewing within this sector is not merely about numbers; it reflects a deeper frustration over systemic neglect and policy imbalance. The land allotment process has compounded the problem. While large industrial units have managed to acquire extensive tracts, including parcels above 200 kanals in districts like Kathua, small and medium investors in Jammu province complain of a complete standstill. No land allotment committee meetings were convened during 2023–24 or 2024–25 for MSMEs, effectively blocking their entry into industrial zones. For local entrepreneurs, particularly those who have carried the industrial base of Jammu for decades, this signals a troubling pattern of exclusion at a time when the government’s stated vision is to promote balanced growth. Another dimension of the crisis lies in discrepancies between proposed and actual investments by registered units. In many cases, actual investments in plant and machinery are 20–25 percent lower than projections. If these deviations are rationalized, it could potentially release a surplus of ₹7,000–8,000 crore within the existing budget, which could then be used to accommodate a significant share of pending applicants. Such corrective action would send a strong signal of responsiveness and fairness, reassuring both existing and prospective investors. The absence of a clear industrial and warehousing policy at the UT level has further exacerbated uncertainty. State-level incentives such as capital investment subsidy and interest subvention, once considered lifelines for local industry, remain unavailable pending approval of new policy frameworks. The delay not only hampers expansion plans but also prevents units from adapting to emerging sectors like warehousing and logistics, which hold immense potential for regional growth. At stake is not only investment but also the credibility of J&K’s industrial development narrative. Investor disillusionment, if allowed to grow, could undo years of effort to position the region as a viable destination for business. For young entrepreneurs and MSME owners, many of whom are “sons of the soil” with limited capacity to absorb prolonged delays, the consequences are particularly severe. Thousands of crores have already been invested, and livelihoods are tied to outcomes that now hang in uncertainty. What is needed is a balanced approach that honors the contributions of local MSMEs while accommodating large-scale projects. Additional fiscal allocations under NCSS-2021 must be expedited, surplus funds from deviations rationally utilized, and land allotments resumed on priority for small and medium investors. Simultaneously, the notification of J&K’s new industrial and warehousing policies should not be delayed further, as they will provide the structural clarity and relief that existing units urgently require. Industrial development in Jammu and Kashmir was never meant to be an abstract target. It was conceived as a driver of jobs, stability, and confidence in a region yearning for economic renewal. At this moment of crossroads, it is imperative for both the Union Government and the UT administration to act decisively, bridging the gap between promise and performance. Only then can the vision of a vibrant industrial economy, rooted in both fairness and inclusivity, become a reality for Jammu and Kashmir.

To restore confidence and unlock the true potential of industrial growth in Jammu and Kashmir, immediate corrective measures are essential. The Union Government must urgently enhance budgetary allocations under the NCSS-2021 scheme so that all 579 pending units, representing over ₹17,000 crore in investment and 54,000 jobs, can be accommodated. At the same time, rationalizing deviations between proposed and actual investments of registered units could free up ₹7,000–8,000 crore, providing relief to a majority of applicants without straining new funds. The administration should also ensure equitable distribution of incentives by addressing the imbalance that disproportionately favours large-scale industries over MSMEs, which form the backbone of the local economy. Land allotment processes for smaller units must resume on priority, alongside fast-tracking approvals for lease deeds and pollution clearances. Finally, the early notification of Central and state-level industrial and warehousing policies will provide structural clarity and enable both expansion and diversification of existing enterprises. Alongside, release of SGST refunds and turnover incentives, which have remained unpaid over the last four quarters as per reports, for which industries continue to await.