Srinagar, Sep 27: With the Jammu and Kashmir government moving towards finalisation of a new Industrial Policy after an extensive process of consultations with industrial bodies and chambers, industry stakeholders are looking forward to its early notification as a comprehensive response to the problems repeatedly brought before the government over the past two years.
Industrial organisations have acknowledged the willingness of the present government to listen to the concerns of existing enterprises and its engagement with stakeholders on industrial policy and Ease of Doing Business. The Federation of Chambers of Industries Kashmir (FCIK), Kashmir Chamber of Commerce and Industry (KCCI), and industrial organisations from Jammu have separately placed detailed submissions before the government and its committees covering revival, procurement, incentives, and regulatory reforms.
Industry now expects the consultative exercise to culminate at the earliest in a policy capable of translating that understanding into institutional relief and long-term reform.
The expectations broadly converge around three core issues: resolution of legacy stress and revival of existing enterprises; restoration of a meaningful share for local manufacturers in public procurement; and a genuine transformation in Ease of Doing Business.
Legacy Stress: Revival must be a priority
Industry stakeholders argue that J&K cannot build its industrial future by concentrating exclusively on the creation of new enterprises while leaving behind productive assets, entrepreneurial experience and employment already existing on the ground.
Official MSME planning documents have themselves recognised the scale of stress in the sector, including proposals for interventions covering more than 40,000 stressed MSMEs.
Industry bodies have consistently maintained that prolonged disturbances, natural calamities, shutdowns, market disruptions, and accumulated financial liabilities have left a substantial section of the existing industrial base sick, stressed, or operating substantially below capacity.
Against this backdrop, the new Industrial Policy is expected to place revival and rehabilitation of existing enterprises at par with promotion of new investment.
Industry has sought an integrated revival package for potentially viable enterprises, including restructuring or settlement of legacy bank debt, access to fresh working capital following revival, power amnesty, relief from accumulated government and industrial-development-corporation dues and restoration of normal banking facilities.
The emphasis is that revival should not end with settlement of old liabilities.
Once an enterprise is revived, it should be eligible for incentives and fresh institutional credit so that the process results in restoration of production, employment, and investment.
The fiscal incentive architecture is another key area of concern.
Industry has sought continuity of the cost equalisers historically available in J&K and incorporation of the four principal instruments represented in the New Central Sector Scheme (NCSS) architecture — Capital Investment Incentive, Capital Interest Subvention, Working Capital Interest Subvention, and GST-linked production support — with rates and monetary ceilings calibrated to available resources.
Stakeholders have also sought continuation and rationalisation of existing incentives relating to turnover, renewable energy, pollution control, quality certification, technology upgradation, and stamp duty and court fee rather than their abrupt withdrawal.
Existing enterprises undertaking substantial expansion, modernisation, diversification or approved revival, industry representatives argue, should receive equitable treatment because such units also make fresh investments and contribute to additional production and employment.
Public procurement must support local manufacturing
The second major expectation relates to government procurement.
For an industrially disadvantaged region, industry representatives contend that public procurement is more than a purchasing mechanism.
Properly structured, it can become an important instrument for sustaining local manufacturing, employment and investment.
Industrial bodies have repeatedly sought a prescribed and meaningful share in government purchases for eligible local manufacturers, strengthening of the Small Industries Development Corporation (SICOP), MSME-friendly tendering, and removal of conditions that unnecessarily exclude otherwise capable local enterprises.
A clear distinction, they maintain, also needs to be made between an actual manufacturer and a trader or agent supplying goods manufactured outside J&K.
An enterprise maintaining a factory, plant and machinery, workers, and fixed investment within J&K generates local value addition and employment and should, according to industry submissions, receive the manufacturing preference intended under the policy framework.
Composite tenders should, wherever practicable, separate supplies from civil works, while tender conditions relating to turnover, experience and contract size should remain proportionate so that capable MSMEs are not excluded merely because of requirements designed for much larger enterprises.
Timely payment to MSMEs and an effective Facilitation Council mechanism are also being sought as integral components of the procurement architecture.
The objective, industry maintains, is not to compromise competition or quality but to ensure that government expenditure generates the maximum possible economic activity, manufacturing, and employment within J&K wherever local enterprises are capable of supplying the required goods competitively.
Ease of Doing Business must be felt on the ground
The third major pillar expected from the new policy is a fundamental transformation in the relationship between government and enterprise.
For industry, Ease of Doing Business should mean that an entrepreneur spends time producing, employing, marketing and expanding rather than repeatedly visiting government offices for permissions, renewals, and routine formalities.
Industrial submissions have sought a technology-driven single-window system, self-certification, automatic renewals, deemed approvals, simplified procedures, and comprehensive digitisation.
Ordinary changes in the constitution of an enterprise should, wherever they do not involve transfer of government land or require another statutory approval, be facilitated through online intimation and self-certification instead of routine prior discretionary permission, industry bodies have suggested.
Inspections, they have argued, should increasingly be risk-based, while departments should share information already available with the government instead of repeatedly requiring enterprises to submit the same documents.
Every approval should also carry a prescribed timeline, with accountability for delays.
A strong grievance-redressal and policy-clarification mechanism is equally important. Industrial incentives should not remain pending for years because two departments interpret the same provision differently.
Industry has consequently sought stronger institutional consultation and monitoring mechanisms, including an Industrial Advisory Council at the highest level, appropriate stakeholder representation in industry-related corporations and institutions, and multi-level committees to monitor implementation, resolve bottlenecks and periodically review outcomes.
Existing industry and new investment are interconnected
The industry’s position is that J&K cannot achieve sustainable industrial growth by treating existing enterprises and new investment as separate or competing priorities.
The productive base already established in J&K represents sunk investment, infrastructure, skilled manpower, entrepreneurial experience, and established market linkages.
Allowing viable enterprises to remain stressed, industry representatives contend, would result in a continuing loss of productive capacity even as the government attempts to attract fresh investment.
A revival-oriented Industrial Policy could therefore serve two purposes simultaneously: protect the investment already made and create confidence among prospective investors that enterprises operating in J&K will receive institutional support during periods of economic stress.
Similarly, a stronger local procurement framework could provide manufacturers with a more predictable market while helping the government retain a greater share of its expenditure within the local economy.
Consultation now needs to translate into implementation
Two years of interaction with the elected government have provided industrial bodies an opportunity to place before it the accumulated problems of existing enterprises as well as their expectations for the future.
The government, for its part, has undertaken an extensive consultative exercise, and the policy-making process has now reached an advanced stage.
Recent public reporting has also indicated that Chief Minister Omar Abdullah has reviewed the proposed Industrial Policy with senior government and financial-sector officials.
Against this backdrop, industry stakeholders are seeking an early rollout of the policy.
The expectation is for an Industrial Policy that does more than announce incentives for future investment.
It should protect investment already made, revive productive assets lying stressed, restore a meaningful market for local manufacturers and dismantle avoidable regulatory barriers while simultaneously attracting a new generation of entrepreneurs and investment.
The underlying message from industry is that new investment and existing industry are not competing priorities.
They are two parts of the same industrial ecosystem.
A progressive Industrial Policy, stakeholders maintain, should assure an entrepreneur that J&K welcomes those who wish to invest, stands by those who have already invested, provides a second opportunity to viable enterprises that have fallen into stress, gives local manufacturers a fair opportunity in the government market and allows businesses to concentrate on business rather than bureaucracy.
After two years of listening and consultation, industry is now looking towards the earliest translation of that engagement into a durable, transparent and implementable Industrial Policy.
If the policy succeeds in encompassing the legitimate aspirations placed before the government by stakeholders, restores competitiveness to existing enterprises and addresses the accumulated legacy stress confronting the industrial sector, it could provide a significant institutional foundation for the next phase of industrial development in J&K.
For Chief Minister Omar Abdullah-led government, the successful conversion of an extensive consultation process into a policy that delivers measurable relief, revival, and regulatory reform would represent a significant outcome of its engagement with the industrial sector.
