SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) has voiced significant concerns regarding the implementation of the New Central Sector Scheme (NCSS), 2021, citing deep-seated imbalances that hinder equitable industrial growth across Jammu and Kashmir. The organisation is advocating for urgent policy adjustments to rectify these disparities.
Information was available with The Chenab Times that these critical issues were brought to the forefront during a recent workshop organised by the Directorate of Industries and Commerce. The event saw the participation of senior officials from the Department for Promotion of Industry and Internal Trade (DPIIT), with DPIIT Director Rajesh Pawar chairing the session, which was moderated by Director Industries and Commerce Khalid Majid. A delegation from FCIK presented a detailed analysis of the challenges confronting local enterprises under the current scheme.
The Federation highlighted that the benefits of the NCSS appear to be disproportionately concentrated in a few select districts. This pattern, FCIK noted, closely mirrors the distribution observed under the previous industrial package of 2002. Such a concentrated approach, the organisation warned, directly undermines the overarching goal of balanced regional development, effectively excluding numerous districts from the intended industrial expansion.
FCIK provided specific data indicating a skewed allocation of funds, revealing that out of a total outlay of Rs 28,400 crore, an estimated Rs 20,000 crore is projected to be absorbed by a mere 18 large industrial units. This concentration of incentives among a limited number of beneficiaries, the Federation argued, raises serious questions about the scheme’s equity and inclusiveness, both in its design and its execution on the ground.
Furthermore, the Federation expressed dismay over the exclusion of existing industrial units from receiving substantial support under the scheme. These enterprises, which have persevered through decades of challenging operational conditions, now face heightened vulnerability due to a perceived lack of policy support for their revival and expansion initiatives.
In its submission to the DPIIT, FCIK urged the incorporation of corrective measures in the subsequent phases or any extension of the NCSS. Key among these recommendations is the equitable distribution of incentives across all districts within Jammu and Kashmir. The Federation also called for the establishment of a dedicated funding window specifically for existing units, with a focus on facilitating their revival, rehabilitation, and capacity enhancement.
As part of its proposed solutions, FCIK suggested the implementation of a bridge funding mechanism. This mechanism, envisioned to range between Rs 5,000 crore and Rs 10,000 crore, is intended to provide crucial financial assistance to existing industrial units. Such an intervention, the Federation believes, could significantly help in unlocking dormant industrial capacity and consequently generate employment opportunities for an estimated five lakh individuals.
The organisation also pointed to administrative delays and procedural hurdles that are impeding even the limited number of units currently registered under the scheme. FCIK noted that despite assurances of automatic disbursement of GST-linked incentives for the initial three years, these payments remain pending in the fourth year, even for compliant units.
Issues within the scheme’s implementation framework were also brought to light. FCIK reported that industrial units are being compelled to submit extensive documentation in hard copy, a requirement that contradicts the stated objective of online processing and digitisation. This administrative burden, the Federation stated, negates the benefits of digital initiatives and increases the compliance load on entrepreneurs.
FCIK raised concerns about a cohort of entrepreneurs who met the application deadlines and made considerable investments but were subsequently disqualified on technical or procedural grounds. The Federation urged authorities to consider these cases under a distinct category and accommodate them by utilising available savings within the scheme’s allocated budget.
Sector-specific anomalies were also detailed, impacting eligibility for incentives. In the case of mini hydel projects, critical components like penstocks are reportedly excluded from the definition of plant and machinery, thus affecting their eligibility. Similarly, civil works, which constitute a substantial part of project costs, are not being recognised for incentives, a departure from practices in other sectors such as hospitality.
Concerning imported machinery, FCIK highlighted that incentives are currently capped at ex-factory costs, excluding crucial expenses such as customs duty and freight. The Federation deemed this approach impractical, asserting that the actual investment reflects the total landed cost of the machinery.
FCIK concluded that the growing divergence between the policy’s intended objectives and its actual implementation at the ground level is a significant cause for concern. While acknowledging the ambitious design of the NCSS, the Federation stated that its practical rollout has been hampered by rigid procedures and restrictive interpretations of its guidelines.
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