Srinagar, March 30: A significant contradiction has surfaced within Jammu and Kashmir’s industrial policy framework, with stakeholders in Kashmir alleging selective and distorted implementation of the government’s Industrial Policy 2021-30. The policy, widely promoted as a reform measure to foster business growth, is reportedly being applied inconsistently, particularly impacting existing enterprises in the Kashmir region.
The Chenab Times has learned that a core point of contention is Section 4.3 of the policy, which stipulates a 100 percent exemption from stamp duty on land transactions within government industrial estates. This exemption is intended to cover both lease deeds and mortgage deeds, and applies to new industrial units as well as existing ones undertaking substantial expansion. The stated aims of this provision are to reduce the cost of doing business, encourage formalisation of enterprises, and enhance access to finance.
However, the practical application of this policy appears to diverge significantly from its intended objectives. While new industrial units have largely benefited from the exemption, its application to existing enterprises has become inconsistent and appears to be region-specific. Government data indicates that a total of 20,417 kanals of land have been identified in industrial estates across Jammu and Kashmir, with 11,707 kanals in Jammu and 8710 kanals in Kashmir. A substantial portion of this land, nearly 75 percent, has been allotted, predominantly with the full exemption from stamp duty and court fees extended to new units.
Sources indicate that in the Jammu region, registering authorities have reportedly extended these stamp duty exemptions to existing units undergoing restructuring or expansion. In contrast, the situation in Kashmir has been reportedly different. Following initial exemptions, Sub-Divisional Magistrates in Kashmir were advised by the Directorate of Industries and Commerce, Kashmir, that such exemptions were considered erroneous. This has led to existing units being compelled to execute supplementary lease deeds for the same land, incurring stamp duty liabilities anew each time there is a change in the unit’s constitution, such as the induction or retirement of partners, or conversion into a company. This approach effectively treats routine internal restructuring as a new land transaction.
Further complicating the issue, stamp duty is reportedly being levied on the entire value of an industrial unit, encompassing land, buildings, and plant and machinery, an interpretation that stakeholders argue is not supported by the policy itself. This practice is reported to be imposing a substantial and arbitrary financial burden on enterprises, particularly Micro, Small, and Medium Enterprises (MSMEs). The process for determining these liabilities involves a prolonged bureaucratic procedure, with cases being referred for the valuation of buildings and plant and machinery to Superintending Engineers and then moving through multiple engineering and administrative levels, often extending for months or even over a year. This has created systemic obstruction to business continuity and growth, stalling decision-making for enterprises seeking capital infusion, expansion, or formalisation.
The financial repercussions are becoming evident, with reports of over Rs. 80 lakh being collected from MSMEs in Kashmir under this regime, collections that reportedly have no parallel in the Jammu region. This situation has raised serious concerns of discrimination, inconsistency, and an erosion of policy credibility, with a policy intended to incentivise industrial growth reportedly penalising existing local enterprises. Despite the issue being raised by apex business organisations, the Directorate has indicated that the matter has been referred to the Administrative Department for clarification, but a formal clarification has not emerged for nearly a year.
The implications extend beyond procedural delays. For policy incentives to be effective, they must be uniform, predictable, and non-discriminatory. Selective application, where one region benefits while another faces burdens, undermines policy integrity and investor confidence, and contradicts national reform principles. Concerns have also been raised about the narrowing scope of the exemption, with no clear justification for excluding changes in constitution, internal restructuring, or mortgage transactions, especially where ownership remains largely unchanged. Similarly, units operating on private land and sectors like tourism, despite being granted industrial status, are reportedly denied parity.
The situation suggests a disparity between policy clarity at the administrative level and its distorted implementation at the ground level. Incentives outlined in the policy are reportedly being neutralised through procedural hurdles, inflated valuations, and repeated financial impositions. The Comptroller and Auditor General of India (CAG) has reportedly received adverse feedback from Kashmir concerning delays and discriminatory practices related to the Ease of Doing Business initiative, with its findings anticipated. The Industries and Commerce Department’s role as a facilitator of industrial growth is perceived by some as compromised, appearing entangled in procedural excess and interpretational rigidity rather than enabling enterprise. The narrative of ‘Ease of Doing Business’ thus remains largely cosmetic, with entrepreneurs in Jammu and Kashmir, particularly in Kashmir, facing delays, discretion, and escalating costs at every step towards growth.
❤️ Support Independent Journalism
Your contribution keeps our reporting free, fearless, and accessible to everyone.
Or make a one-time donation
Secure via Razorpay • 12 monthly payments • Cancel anytime before next cycle
(We don't allow anyone to copy content. For Copyright or Use of Content related questions, visit here.)
The Chenab Times News Desk
