Understanding, acknowledging & valuing the growingimportance of Industrial Sector, both State and Centre Governments have beenfollowing policy of helpingindustrialists by way of providing tax holidays, remissions and refunds,subsidies and exemptions while devising industrial policies from time to time. Some of the highlights ofthe Central Government incentivepackages in Industrial Policy of 2018 for J and K are as follows.
a. Central Comprehensive Insurance Incentive
b. Central Capital Investment Incentive for access to credit
c. Reimbursement of Central Goods & Service Tax paid by the unit to the Central Government
d. Central Interest Incentive on Capital Credit etc.
Similarly the J &K Government Incentive Packages are:
a. Interest Subsidy on Working Capital
b. Subsidies on purchase and installation of Diesel GenSets/installation of Pollution Control Devices
c. State Capital Investment Subsidy on cost of Plant
d. Air freight subsidy
e. Pre-investment Study/Feasibility Report charges
f. Stamp Duty and Court Fee Exemption on Mortgage Deeds
g. Exemption from Earnest Money/Security Deposits
h. Goods & Services Tax Reimbursement in terms of SROs.519, 521 of 2017 and SRO.63 of 2018
State Freight Refund Scheme in terms of Government OrderNo.411 –FD Of 2018 dated 25-9-2018
j. Toll Tax Exemptions on import of raw material, Plant & Machinery, building material and otherequipments
Further, to boost industrial development in J& KGovernment has proposed in its budget for 2019-20 a sum of Rs 400 crore to bespent on augmentation of infrastructure including waste disposal in allexisting and upcoming industrial units and also to support the process of improving “Ease of Doing Business”.Despite these incentive packages theindustrial sector has not yet made itspresence felt, and a good number of plots allotted to entrepreneurs at nominal charges inIndustrial Estates have gone unused.
According to Department of Industries & Commerce, J & K, more than 325 industrial plots are stated to have remained unutilized in Kashmir’s 20 Industrial Estates managed by Jammu & Kashmir State Industrial Development Corporation (SIDCO) and Jammu & Kashmir Small Scale Industries Development Corporation (SICOP) as of 1/2019. The IGC Lassipora with the highest number of 131 idle industrial plots tops the list followed by 114 such plots in Industrial Estate Khonmoh, both in District of Pulwama. The Integrated Textile and Handicrafts Park at Zakoora has 34 unutilized industrial plots. The entire Estate at Sports Complex at Bijbehara in district Ananatnag has 31 plots under the occupation of Department of Sericulture and 25 plots have been occupied by the Security Forces which are there since 1989. The proposed project of 1008 kanals of land at Ompora (Budgam) Industrial Estate has not materialized due to objections to any construction work by the authorities of Indian Air Force at the place. Likewise Industrial Estate at Bandipore, Sumbal, Varmul, Sopor and Kulgam are also lying under the use of Security Forces since 1989. At Zainakot Srinagar after allocation of 246 kanals of land, out of 326 kanals of the erstwhile HMT Limited Watch Factory III Srinagar, for the proposed Police Housing Colony, and the rest of 80 kanals for Para Military Shashtra Seema Bal, the Department of Industries & Commerce has remained neglected, slicing its expansion to that extent.
In case of unutilized plots, the Department concerned islearnt to have served notices to plot holders who have failed to establishthe units. These plots if and when retrieved are proposed to be allotted to the new entrepreneurs who can bid for them under rules after cancelling theProvisional Licenses issued to the non-starters. Even if all the plots of Industrial Estates are evacuated from theSecurity Forces/ Civil Departments andallotted to new potential entrepreneurs, still the industrial activity can’tgrow as much as expected for reasons of lack of availability of regular, andefficient electricity supply. Electricity has become the soul of humanactivities directly or indirectly. Out of 24 hours from Srinagar side non-metered areas have electricity or noelectricity in the ratio of 15: 9 hours as per the load shedding schedule
The position in the metered areas is not so better as theytoo suffer pesky cuts varying between 4to 6 hours a day. As factory/industry working hours are from 9 am to 5 pm with two breaks each of 15 minutes for twoteas and one for lunch for 30 minutes, there remain 2.00 working hours in first interval schedule, and 4.00 hours forsecond interval schedule which makes an average of 20.00 hours of work per weekinstead of 42 hours as a normal. Substituting diesel gen sets is also neithercost effective nor eco friendly. It renders the employee idle by virtue ofwhich products normally expected to be manufactured in a day or so take daystogether. As the idle time/employee has to be paid this increases the unit costof the product and consequently the sale price, crippling it to stand in acompetitive market to catch customers. Now the sales/returns fail so are theprofits, thereby entailing losses forewarning the closure of the unit.
Thus local manufactures in public/private sectorundertakings/enterprises in Srinagar suffer losses due to non-availability/lessavailability/low voltage of power during working hours as compared to Jammuwhere the climate is suitable. This position pushes J & K into deep down devilish well ofdarkness prolonging its deficits. For having a finished product,availability of raw material is no problem as it can be imported from anywhere,nor is road connectivity for valley ahindrance right now as how long can road remain closed due to geographical orpolitical weather conditions. The only problem is non-availability ofsufficient power. That is why doling out of huge industrial incentives,subsidies, tax holidays, tax remissions have not been able to produce intendedresults. As a permanent remedialmeasure, JK Government must take up thematter with the centre for making electricity sufficiently and efficientlyavailable. As the human/industrial activity and the electricity are concomitant,this needs to be prioritized for the over all inclusive development.
Author is former Sr. Audit Officer and Consultant of A.G’s Office Srinagar.