J&K industrial sector faces worst contraction

Amit Khajuria

Tribune News Service

Jammu, January 14

The failure of successive regimes to create requisite infrastructure and formulate an attractive policy has pushed J&K’s industrial sector into worst contraction, making thousands of industrial units financially sick.

The recent decision of the J&K administration to abolish all inter-state toll plazas, particularly at Lakhanpur, the gateway to J&K, to improve competitiveness in local industry has sent jitters among the local industrialists who have sought safeguards and package for the industry.

“We are sitting at the far end of the country and the supply of raw materials is also difficult and erratic. But still we are running our units. The government has always delayed the incentives and this also adds to our woes,” said Lalit Mahajan, chairman, Bari Brahmana Industrial Association.

“After the implementation of GST regime, the industry has been the worst sufferer and now the toll plaza at Lakhanpur has also been abolished. Maximum industrialists used to sell their products within the state as there was a toll on products entering the state from outside at the rate of Rs 1,000 per tonne. But now we will have to compete with industries from other parts of the country which have better resources and their cost of production is also low,” he added.

As many as 47 industrial estates have been established in Jammu and Kashmir, comprising 32,642 units. Out of this, 19,593 are in Kashmir and 13,039 in the Jammu region.

“Thousands of industrial units have been rendered financially sick due to failure of the successive regimes to create adequate infrastructure and develop an industry-friendly policy. The situation has reached an alarming stage as nearly 90% of the industrial units in Kashmir are facing worst financial crunch after the revocation of J&K’s special status. Currently, they are unable to repay their loans. In the Jammu region, the situation is no good as nearly 25% industrial units have been shut down and the rest are not making production at their optimum level,” official sources told The Tribune.

The erstwhile state of Jammu and Kashmir had framed an industrial policy in 2016. Under the policy, the government had to offer 30-40% capital investment subsidy on plant and machinery, 3-5% interest subsidy on working capital loan, 100% subsidy on purchase of DG set, solar or wind generators and soft loan up to Rs 30 lakh to identified sick industrial units.

Notwithstanding this policy, local industrialists alleged that the policy was not viable on the ground and there were many factors which discouraged them to set up units in Jammu and Kashmir.

“The industrial policy framed in 2016 remained in papers only. We are facing a lot of problems. If the government is serious in bringing more industry to J&K, it has to come up with an attractive and effective industrial policy,” said Anil Suri, a noted industrialist in Jammu.

“We are land-locked state and our cost of production is almost 5-7% higher than neighbouring states because we have to bring everything from outside,” he added.