The National Central Sector Scheme (NCSS), introduced in April 2021 with an ambitious outlay of Rs 28,400 crore, was envisioned as a catalyst for the industrial rejuvenation of Jammu and Kashmir. It aimed to attract private investment, generate employment, and stimulate economic growth in a region long held back by political uncertainty and developmental delays. By offering structured incentives to new and existing industrial and service sector units, the scheme signalled a paradigm shift in how industrial development could be approached in the UT. Encouragingly, NCSS received an unprecedented response. Investor enthusiasm far exceeded projections, with over 1,500 units registering and submitting proposals. As of August 2024, the total financial liability under the scheme, including both approved and pending applications, has soared to over Rs 71,000 crore-more than double the originally sanctioned amount. This surge in investor interest is a clear indicator that NCSS struck the right chord and that the private sector views J&K as a viable and promising industrial destination.
However, what should have been a moment of celebration instead became a cause for serious concern. The Central Government has yet to respond to the repeated requests from the UT administration to enhance the financial outlay of the scheme to Rs 75,000 crore, in line with the actual investment response. Despite intervention by top state officials, including the LG, and correspondence with the Union Home Ministry, there has been no formal commitment or communication from the Centre. This indecision has thrown the future of thousands of crores worth of ongoing private investments into jeopardy. Prominent industrial groups such as ITC, Dabur, Haldiram, Bhilwara, and Cyclone Beverages are among those affected. Several units have already invested heavily in land, infrastructure, and machinery. Yet, in the absence of guaranteed incentives, they are now unwilling to proceed further. Loans sanctioned by banks remain undrawn, and many projects are at a standstill. The enthusiasm that once defined J&K’s industrial narrative is now being replaced by anxiety and hesitation.
The consequences of this deadlock are profound. Industrial expansion has ground to a halt, depriving the region of vital employment opportunities and revenue generation. This stagnation threatens to create a negative perception of J&K as an unreliable destination for business. It also adds to existing challenges-such as industrial land shortages and unreliable power supply-further compounding the hurdles faced by entrepreneurs.
At this juncture, the Union Government must act with urgency and clarity. If budgetary constraints prevent the full-scale extension of the scheme, a revised version with shortened benefit periods, capped incentives, or staggered disbursements could be considered. What is non-negotiable, however, is the need for a clear policy stance. Investors require certainty, not silence. The NCSS has proven its worth by attracting substantial investment interest. Now it is the Government’s turn to demonstrate resolve. Letting this opportunity slip away would not only hurt the industrial ecosystem but would also dim the economic prospects of an entire region. A decisive, transparent, and supportive policy response is the need of the hour.
Follow our WhatsApp channel
