From offering tax holidays to massive subsidies, industrial growth in Jammu and Kashmir has shown steep decline during the last eight years.
The statistics put forth be Niti Aayog have revealed that annual growth rate of industry at 2004-05 prices was 6.88 in the year 2007-08 and it stands at 1.18 in the year 2013-14.This steep decline clearly indicates that policy makers have miserably failed in improving the industrial scenario of Jammu and Kashmir state.
This steep decline has put a question mark on the state industrial policy which came into being in the year 2004.This policy was then defined as major shift from the old and ad-hoc mechanism that state had adopted. This industrial policy facilitated provisions of incentives on the argument that these incentives would attract private sector investment for the industries in a big way.
It was further claimed that these incentives would help in overcoming constraints of remoteness, poor connectivity, high transportation cost, erratic power supply faced by the industry. The policy makers which included present Finance minister Dr. Haseeb Drabu who was then Economic advisor to the then government and chairman of Jammu and Kashmir bank seem to have not given serious thought to consequences if the policy goes wrong.
Drabu had then said that state industrial policy would focus on private sector industrialization in backward blocks of the state and modernization of the existing units. This policy was an addition to the incentives that the central government had announced in the year 2002. These incentives have been extended after every five years by central government thrice, since their announcement in the year 2002.
The decimal growth rate of 1.18 raises sharp questions on the state government’s continuity with economical draining and virtually useless industrial incentives. These incentives have failed to generate a vibrant industrial sector in the state. A 100 percent subsidy on purchase of new diesel generator sets, report preparation and quality testing equipments has done little to bring big industrial houses to Jammu and Kashmir.
Apart from this lending power and land at concessional rates, toll tax exemptions, CST exemptions, VAT remission, Stand duty exemption, 100 percent excise refund, 50 percent subsidy on capital investment and many more. Such relaxations have failed to improve the annual industrial growth rate of Jammu and Kashmir.
Though it is inconsequential, but it seems that previous NC-Congress coalition government did little to enthuse industrial sector since when they took over the annual industrial growth rate was 6.88 and when they demitted office in December-2014; it had come down to 1.18. Not only this, in-between the growth rate had slipped to negative 2.58 in the year 2010-11.
Though the BJP-PDP government had constituted a committee for drafting the new industrial policy but industrialist are of the opinion that until the government does not do away with red tape in the government institutions which remain in direct liaison with those who intend to invest in Jammu and Kashmir.
While talking to the Newspoint Bureau, Chairman of Chamber of commerce and industries (CCI) Rakesh Gupta said that it is grossly because of the delay in processing the files in government institution. He further added that corruption in District Industries Center (DIC) and State Pollution Control Board (SPCB) has led to the fall in industrial growth rate.
New industrial policy may come as a ray of hope. Certain amendments have to be made which are to be taken up by the government, he said. He added that there is a hope because of new industrial policy, new investment may come and new industrial areas can be indentified so that new industries can be established, he said.
Adding further, he said “New investment can only be done if in near future online application system starts otherwise no new investment would like to invest in corrupt system.” Another industrialist Akhil Suri said that new industrial policy should come as new hope for industrialists and this industrial policy should be in-favor of the businessmen and industrialist.
“Increase in import from china resulted in the decrease in industrial growth rates,” he said while adding that Jammu and Kashmir gets a special incentive because of the location of the state as it is a landlocked state, marketing skills are not up to the mark. He concluded that to increase the industrial growth rate youth should be given technical as well as professional education which will help in giving skilled manpower and moreover new industrial policies will help in increasing the industrial growth rate.