Industrial Dreams on Hold: J&K’s New Central Sector Scheme Mired in Delays, Threatening Economic Growth.
||Black and White Digital News||
||December 02,2024 ||
JAMMU : The ambitious New Central Sector Scheme (NCSS), designed to revolutionize Jammu and Kashmir’s industrial landscape, has hit a roadblock, with delayed disbursements of promised incentives plunging newly established industrial units into a financial quagmire. Introduced in February 2021 with much fanfare, the scheme was touted as a transformative initiative to attract investments, create jobs, and boost the region’s economic development. However, bureaucratic hurdles and sluggish implementation have left industrialists and investors grappling with severe uncertainties.
A Promise Gone Awry:
With a whopping allocation of Rs 28,400 crore, the NCSS aimed to position J&K as a burgeoning industrial hub. Central to the scheme was the GST-Linked Incentive (GSTLI), a provision promising a 300 percent reimbursement of investments over 10 years. This offer attracted substantial interest, leading to 918 industrial units registering with a combined investment commitment of Rs 25,000 crore.
Yet, the stark reality tells a different story. Over three years, only Rs 270 crore of the promised incentives have been disbursed, with the GSTLI component receiving a meager Rs 40 crore. Shockingly, no GSTLI cases have been sanctioned during the current financial year, leaving more than 1,500 applications—850 from Jammu and 680 from Kashmir—languishing in bureaucratic limbo.
Mounting Financial Strain:
For businesses that banked on the incentives, the delays have resulted in crippling cash flow issues. Many new industrial units, which invested heavily in anticipation of timely reimbursements, now face the grim prospect of their accounts turning into Non-Performing Assets (NPAs). “The risk of NPAs is a harsh reality for these units, and their survival is hanging by a thread,” revealed a source familiar with the situation.
The situation is compounded by constant revisions of Standard Operating Procedures (SOPs) by the Industries and Commerce Department. These changes, often misaligned with the original guidelines from the Department for Promotion of Industry and Internal Trade (DPIIT), have sown confusion and stalled the approval process.
Stakeholders Raise Alarm:
Industry experts are ringing alarm bells, urging immediate intervention to salvage the scheme’s objectives. “The NCSS holds immense potential to transform J&K’s industrial sector, but the current delays are eroding investor confidence. Streamlining approval processes and ensuring timely disbursements are critical to restoring trust,” emphasized a senior industry representative.
The delays have also raised concerns about J&K’s reputation as an investment-friendly destination. “The bureaucratic red tape is sending the wrong signals to potential investors, who are already hesitant to venture into an industrially underdeveloped region,” said another expert.
Official Response:
Government sources acknowledged the delays, attributing them to disruptions caused by the enforcement of the Model Code of Conduct during the Lok Sabha and Assembly elections. “The State Level Committee responsible for sanctioning GSTLI cases couldn’t convene this financial year. However, a meeting is scheduled in the coming days to clear the backlog,” an official confirmed.
While this assurance provides a glimmer of hope, stakeholders remain skeptical about the scheme’s ability to regain momentum without significant systemic changes.
The Way Forward:
The NCSS was envisioned as a cornerstone of J&K’s economic revival. To fulfill its promise, the government must prioritize the resolution of pending cases, adhere to original guidelines, and remove procedural bottlenecks. Failure to do so risks not only the collapse of new industrial ventures but also the erosion of trust in government initiatives aimed at uplifting the Union Territory.
As the clock ticks, the stakes are high—not just for the industrialists but for the broader economic aspirations of Jammu and Kashmir. The government’s next steps will determine whether the NCSS can deliver on its transformative promise or become yet another missed opportunity.
