The Industries & Commerce Department of the Government of Jammu and Kashmir, in December 2021, issued what it called a ‘Final Notice’ to over 250 industries located in different industrial areas of Jammu, asking them to revive their sick units within a week’s time or face eviction, which will be followed by fresh auction of the retrieved industrial plots to new bidders. If this is implemented, several industries that had been struggling to sail in the turbulent waters will face permanent closure.
Post abrogation of Article 370, Jammu and Kashmir, on one hand is going through several positive changes and implementing several new laws that were never extended to the erstwhile state earlier and on the other hand is witnessing presence of many multi-national companies, both Indian and foreign, which have committed to invest largely in this new Union Territory (UT) to make it come at par with other developed states or UTs in rest of the country, which is definitely a healthy sign of progress and prosperity.
Amid these positive and healthy developments, what is required from the administrative machinery is a sympathetic and holistic approach towards industrial sector which had been facing obstacles ever since its existence. These industrial units, from time to time were requested to create employment, lay emphasis on local products and make Jammu and Kashmir self-sufficient, to achieve which, several facilities through industrial policies were also extended to these units.
However, this order that asks the industrial units to revive themselves within seven days, if implemented without any consideration, will reverse the entire exercise, make many unemployed, leave investments null and void and also push several players out of the rink forever. The purpose should have been to make these local sick industrial units come to life so that they reach a sustainable level and keep generating employment while contributing to the economy of Jammu and Kashmir.
The move might be aimed at keeping a check on the sick industries which are holding the plots but not functioning as per their registered line of activity, but the manner in which all this is being done in haste, will leave the worst impact on local investors. Several industrial houses are willing to buy the land permanently on freehold basis, save their rent and other charges, revive their units within a considerable time period and even invest the saved money to modernise/upgrade their units for maximum output.
Jammu & Kashmir State Industrial Development Corporation (SIDCO) and J&K Small Scale Industries Development Corporation Limited (SICOP), which have allotted the land to industrial units, also know the ground realities of industrial operations in the UT. It is also a naked truth that several industrial units, having their kith and kin employed in these departments, have been doing well because of the massive support from officials but those trying to survive on their own were facing massive hardships.
Instead of assessing the hardships being faced by these units or exposing the nexus between officials of SIDCO, SICOP and chosen few industrial houses, the decision was made to constitute a committee for auctioning the industrial plots of land retrieved. The industries, many of which claim to be still operational, other than previous governments’ apathy, have also faced militancy related hurdles, lockdowns, curfews and now COVID-19 related restrictions, but no one cared to look into the issues confronting them.
These industrial houses, especially the Micro, Small & Medium Enterprises (MSMEs) in J&K, also had to face onslaught on arrival of the Government e-Marketplace (GeM) Portal, which brings on board buyers and sellers for public procurement. Though the pan-India GeM portal targeted on bringing in transparency and efficiency, the MSME units in J&K saw it as a death blow to businesses as the marketing support provided by SICOP ended, and even after adding local filters on GeM to enable procurement of goods and services from local manufacturers, the departments purchased mostly from sellers outside the state.
In addition to this, the provision of Price & Purchase preference given by the previous Industrial Policies of J&K to local MSME units on goods and services intended for government departments & organisations, due to locational disadvantage as compared to the ones outside J&K, was not included in the Industrial Policy of 2021, serving as another jolt to the local industrial sector.
Now that the District Industries Centre (DIC), Jammu has issued notices to 89 industrial units in SIDCO Industrial Complex Bari Brahmana, 76 in SICOP Industrial Area Gangyal, 22 in SICOP Industrial Area Birpur, Bari Brahmana, 5 in Government Industrial Estate Akhnoor, 41 in Industrial Estate Digiana and 17 in Industrial Extension Area Jammu Cantonment to revive their units within seven days, about 250 industrial units are on the verge of permanent closure, leaving no scope of their revival.
Ideally, the Industries & Commerce Department should have found a way out of this issue before taking such a harsh step. Had the department initiated measures to revive these industries sincerely and nailed those who are hand in glove with officials and surviving, a good number of local units could have made it to the list of J&K industries blinking on national industrial map and not on the list of those issued notices for closure. The department, instead of acquiring and auctioning these small holdings, should have created new mega industrial parks to welcome and encourage new investors from across the world, thereby creating a healthy competition and spirit of survival amongst locals.
To cite a glaring example of the government coming to rescue of the dying telecom operators, we have the case of Vodafone before us. The Union Government is going to have over 35.8 per cent stake in Vodafone Idea (Vi), for which the Board of this telecom company has already given approval to the Indian government’s proposal to convert the amount of spectrum auction installment and the Adjust Gross Revenue (AGR) dues to equity. Vodafone Idea (Vi) has already paid Rs 7,854 crore to the government but the company still owes roughly Rs 50,000 crore to the government.
This will make the government the largest shareholder in the company. Had J&K gone this way for its industries, many small units could have survived the onslaught and revived themselves. While the government claims to have given these, what it termed as ‘sick industrial units’, sufficient time and opportunities to revive their operations, the stakeholders claim to have invested heavily on their industries and need another chance to revive. They are also willing to pay the money for plots allotted to them in lieu of fee for converting their leasehold rights into freehold rights, as in the UT of Delhi.
Contrarily, the government has already constituted an auction committee for conducting the auction of industrial plots retrieved after cancellation by SIDCO and SICOP. The government has also asked the committee members to evaluate the minimum reserve price of each cancelled industrial unit on basis of the cost of land as per circle rate in vogue, charge transfer fee as per industrial policy, add pending lease rental including all estate dues with interest, prepare estimate of civil works and add charge processing fee and advertising charges before auctioning the plots.
The committee has also been asked to ensure that no bid goes below the minimum reserved price and auction is carried out as per the norms. The real purpose of this entire exercise is to make Jammu and Kashmir blink on the industrial map of India, with heavy investments coming from big houses, but by taking the local units on-board in this mega makeover, several Jammu investors could have been saved from their personal disaster, which is in the line of sight now. Agreed that some units here must be barely sustaining to grab subsidies and allied benefits but a micro assessment of all such units could have atleast nailed the real culprits and saved those who want to genuinely work and contribute into the UT’s economy.
Those under the knife have their own viewpoint. They feel that the existing micro and small industries are suffering for the past few decades and had been requesting the Government of India as well as the UT administration to help them revive their units. They wanted to be heard before such an order was issued. These entrepreneurs claim that existing industries have paid a very heavy price for the land, more than that of the lands outside industrial area, at the time of allotment/possession to run their industries. They also claim that SIDCO and SICOP had charged them exorbitant rents during these times, which as per the lease deed, could not be increased more than 5%.
From the viewpoint of industrialists, one can understand that many are solely dependent upon their units for their livelihood and if provided with soft loans and other incentives or allied infrastructure, they can easily be revived. This hand holding will not only revive the industries but also become lifeline for many entrepreneurs. They also believe that closure of so many industries in one go will create chaos and resentment, also leading to huge unemployement, thereby making way for crimes and militancy. Now that the government has decided to be completely transparent and bring everything with regards to system of functioning in black and white, it must provide these industrialists a chance to be heard and survive this onslaught once.
The order issued by the DIC should be cancelled and the entire process should be reviewed with an open mind. The ground work must be redone to silence the disgruntled voices especially of those who claim that their units are still functional and have wrongly been put in the grey list. With the changed structure in UT, a new and responsive administration in place and accountability as prime ingredient of good governance, it is the need of the hour to convert the leasehold rights of local industrialists into freehold rights, providing the industrial sector in Jammu a chance to revive along with arrival of new investors, to make Jammu blink on the national industrial map with ample local contribution.
(The writer is BJP Executive Member
J&K UT and Philanthropist)