J&K MSMEs Await Policy Push

The abrogation of Article 370 was envisioned as a bold and transformative step towards fully integrating Jammu and Kashmir with the rest of the country—not just politically, but economically. Among the many promises that followed were those of industrial revival, infrastructural upliftment, and, most crucially, employment generation for local youth. The idea was simple yet powerful: investment would bring opportunity, and opportunity would bring peace and prosperity. But as we approach the midpoint of this ambitious journey, the ground reality paints a rather sobering picture. According to the statistics provided by industrial leaders, the current impasse over delayed fiscal incentives—both from the Centre and the Union Territory administration—has virtually stopped the industrial momentum in Jammu and Kashmir, leaving hundreds of prospective investors stranded and thousands of potential jobs in limbo.

The National Industrial Development Scheme for Jammu and Kashmir (NCSS-2021) was launched with much fanfare, backed by a substantial budgetary provision of 28,400 crore rupees. Its intent was to incentivize new industrial units, expand existing ones, and create a robust manufacturing and services base that could absorb the region’s growing workforce. However, nearly four years since its notification, the scheme is yet to fulfill its core objectives. As of today, more than 700 industrial units that had applied under the scheme—many well within the notified deadlines—are still awaiting formal registration and financial concurrence from the Directorate of Industries and Commerce in Jammu and Srinagar. Several of these units have already invested heavily in land, infrastructure, and machinery, and yet they find themselves locked in a bureaucratic quagmire with no clarity on timelines or accountability. What makes the situation more alarming is the deeply skewed pattern of fund allocation under NCSS-2021. A staggering 67 percent of the approved funds have been earmarked for a mere three percent of large-scale units, leaving the remaining 97 percent—comprising mainly Micro, Small, and Medium Enterprises (MSMEs)—with just 33 percent of the budgetary share. This disproportionate distribution not only undermines the spirit of inclusive growth but also raises critical questions about policy intent and implementation priorities. The MSME sector, often hailed as the backbone of employment generation and grassroots entrepreneurship, has effectively been sidelined in the current industrial landscape of Jammu and Kashmir. Further compounding the crisis is the absence of a functioning land allotment mechanism for MSMEs. No land allotment committee meetings have been held in the Jammu region for the financial years 2023–24 and 2024–25, effectively halting any forward movement for new and expanding units. In contrast, large units—particularly in Kathua district—have been allotted land expansively, some with requirements exceeding 200 kanals. Such preferential treatment not only breeds resentment but also deters small- and mid-scale investors from trusting the process, thereby weakening the entrepreneurial ecosystem. The administrative delays are not just limited to registrations or land allotments. The absence of an updated State Industrial Policy and Warehousing Policy has left many existing units unable to diversify or pivot operations to respond to evolving market demands. With warehousing emerging as a key support sector for industrial logistics and e-commerce, the policy vacuum is denying businesses the flexibility they urgently need. The numbers involved are not small. An estimated 75,000 crore rupees in fiscal incentives remains stuck, awaiting clearance. This is not merely an accounting issue—it is an opportunity cost borne by the youth of Jammu and Kashmir, who continue to seek meaningful employment opportunities. It is a cost paid by entrepreneurs who dared to dream in a post-Article 370 era, only to find themselves shackled by systemic inertia. It is also a burden on the credibility of promises made from the highest offices in the land. To be fair, efforts have been made. Reports suggest that the lieutenant governor has taken up the matter with the central government, seeking enhancement in the budgetary provision to accommodate the pending cases. But effort without timely execution is of little solace to those already struggling. What the situation demands is not just acknowledgment, but swift, transparent, and targeted action.

Jammu and Kashmir stands today at a defining crossroad. The region cannot afford to let bureaucratic complacency erode the vision of economic integration and grassroots empowerment. Industrial growth is not just a statistic—it is the foundation for long-term peace, stability, and dignity. It is the difference between promise and performance. The sooner the government aligns policy with practice, the sooner we will see the dreams of thousands take tangible shape, and the promise of a new Jammu and Kashmir become a lived reality.