Srinagar: The Federation of Chambers of Industries Kashmir has expressed serious concern over what it termed as an inequitable and imbalanced pattern of industrial growth in Jammu and Kashmir under the New Central Sector Scheme (NCSS), 2021.
The concerns were raised during a stakeholders’ workshop organised by the Directorate of Industries and Commerce, which was attended by senior officials of the Department for Promotion of Industry and Internal Trade.
The DPIIT delegation was led by Director Rajesh Pawar, who chaired the session and listened to the concerns of industrial representatives. The programme was moderated by Director Industries and Commerce Khalid Majid.
During the workshop, the FCIK delegation presented what it described as the ground realities faced by local enterprises under the NCSS.
The Federation said that, much like the industrial package of 2002, the benefits of the new scheme are once again getting concentrated in only a few districts, mainly three districts of one region, while the remaining districts across Jammu and Kashmir continue to remain excluded from the industrial growth process.
According to FCIK, this skewed distribution defeats the objective of balanced regional development.
Highlighting what it called a stark disparity, the Federation informed the workshop that out of the total scheme outlay of Rs 28,400 crore, nearly Rs 20,000 crore is likely to be availed by only 18 large industrial units.
FCIK said such concentration of incentives raises serious questions about equity and inclusiveness in the design and implementation of the policy.
The Federation also said that the existing industrial base in Jammu and Kashmir has once again been left out of meaningful support under the scheme, despite having sustained itself through decades of difficult conditions.
It maintained that the exclusion of existing units from the NCSS has increased their vulnerability and undermined their prospects for revival, expansion and better capacity utilisation.
FCIK urged DPIIT to introduce corrective measures in the next phase or extension of the scheme by ensuring that incentives are equitably distributed across all districts of Jammu and Kashmir.
It also strongly advocated the inclusion of existing industrial units under a separate window meant for revival, rehabilitation and expansion.
The Federation further suggested that a bridge funding mechanism in the range of Rs 5,000 crore to Rs 10,000 crore for existing units could help unlock idle capacity and potentially generate employment for up to five lakh people.
FCIK also highlighted that even the limited number of units registered under the scheme are facing delays and procedural bottlenecks.
Members pointed out that GST-linked incentive shortfalls for the first three years, which were supposed to be automatically disbursed in the fourth year without requiring additional documentation, are still pending despite compliance by the units.
Similarly, while the scheme envisages online processing, industrial units are allegedly being asked to submit extensive hard copies of bills and documents, making the process cumbersome and defeating the purpose of digitisation.
The Federation also raised the issue of entrepreneurs who had applied within the stipulated timeline, invested substantial amounts and, in several cases, even commenced production, but were excluded from the scheme on procedural or technical grounds.
It urged the authorities to treat such entrepreneurs as a separate category and consider them for inclusion by utilising savings from the scheme.
FCIK also flagged several sector-specific anomalies.
It said that in mini hydel projects, critical components such as penstocks are not being treated as part of plant and machinery, thereby depriving project developers of legitimate incentives.
Likewise, it pointed out that civil works, which account for a substantial portion of project costs, are not being considered for incentives, despite similar treatment being given to sectors such as hospitality.
The Federation further raised concerns regarding industrial units importing plant and machinery. It said that incentives are currently being restricted to ex-factory costs, excluding customs duty, freight and other associated charges.
FCIK termed this approach impractical, saying that the actual investment necessarily includes the full landed cost of the machinery.
Members of the Federation expressed strong dissatisfaction over what they described as a widening gap between policy intent and ground-level implementation.
They said that while the NCSS is ambitious in design, its implementation has been affected by restrictive interpretations, procedural rigidity and a lack of sensitivity towards genuine investors.
