KSSIA asks Govt to save existing local investments before luring non-local investors

KSSIA asks Govt to save existing local investments before luring non-local investors
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Kashmir Small Scale Industrial Association (KSSIA), the oldest industrial body of the valley, has asked the Jammu and Kashmir Lt Governor Giresh Chander Murmu to salvage and consolidate the existing investment in local industry before eying for imperceptible prospective investments in the sector.

According to a statement, a meeting of KSSIA was held under the chairmanship of President Syed FazalIllahi to deliberate upon the prospects for investments and development in the state after introduction of the domicile law as stated by the Lt Governor last week.

The members said that the prudence demanded saving the tens of thousands of crores of investment made by the locals in various manufacturing, processing and service sector enterprises employing more than 40% of the total workforce in J&K.

The members regretted that owing to indifferent attitude by the authorities and administration, the plight of local enterprises was unprecedented and any further delay in affording genuine reliefs, revival and rehabilitation to these may prove catastrophic for our economy and employment.

"Although no one has ever objected to lure the non-local investors for making investments in J&K, yet such an exercise in the past has always fallen flat and the expectations in future were also bleak", said the members.

The members said it was a myth that laws played any role in stopping outsiders from making investments as after the year 1975 both locals and non-locals were put at par to acquire land on lease for 90 years in any Industrial estate in the twin capitals of Jammu and Kashmir as well as Ladakh besides their uniform entitlement to other incentives.

"Despite this only a handful of companies could be lured to establish their units in the state till 1989 but immediately after the inception of turmoil in 1990 most of these companies closed their operations including high profile Hindustan Levers Limited, Union Carbide, Singer Sewing Machines Limited, Greaves Foseco Limited, Goenkas Limited, Continental Devices India Limited and others," said the members.

They said even the Central Industrial Policy extended in the year 2002 that provided for exemption on excise duty and income tax besides many other incentives failed to motivate investors.

"Whereas a similar policy attracted tens of thousands of Crores of investment  inUttrakhand and Himachal,  it hardly brought 3000 Crores of investment by nonlocals in J&K that too in just two districts of Jammu division", said the members, adding that "many of these non-locals particularly those engaged in processing of menthol and copper had come only to grab the incentives."

Deliberating on the reasons for such lower investments, FazalIllahi said that setting up of new enterprises was governed by some fundamental principles including safety and returns for the investments. He said that J&K was a land locked territory at the tail end with enormous geographical, climatic, communicational and political disadvantages. "How could we expect genuine investors to make investments in an un-conducive atmosphere where the investors have not only to face such disadvantages but also to confront flawed policies, harsh laws and red-tapism," he added.

He said the government's response to the problems of existing enterprises definitely played a part in motivating the prospective local and non-local investors and unfortunately government's track record on that was not encouraging.

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