Concerns rise as J&K gears up for Investor Summit amidst industrial policy mishmash

JAMMU: After losing face by postponing the much-aggrandized event within a fortnight of its announcement, LG Murmu’s government has commenced preparations for the first ever Investors’ Summit of J&K, aimed at attracting huge investment in the region. However, what could negate all the efforts is industrial policy mishmash.
Jammu and Kashmir government is gearing up for Global Investors’ Summit 2020 when there’s no clarity on industrial policy.
Firstly, the central incentive scheme for J&K is set to expire in March 2020, around the same time when the summit is proposed to be held. Secondly, industrial policy is still being drafted at the central level for the new Union Territory of J&K. Thirdly, the fate of existing ‘state industrial policy’ is dubious.
“On what basis is the government inviting investors to J&K?” ask industrialists and entrepreneurs of Jammu.
Until now being governed by two Industrial Policies – state and central, J&K was set to have new agendas for spurring industrial growth, post the scrapping of Article 370 and reorganization of the state into two Union Territories. These new agendas in the form of an industrial policy - expected to continue or enhance the ‘good’ portions of the erstwhile policies, rectify or exclude the ‘bad’ portions, and add few more incentives - are yet to be announced.
“J&K is a place which lacks all the 5 M’s required for manufacturing industry – Man, Machine, Money, Material, Market. And the abrogation of Article 370 and J&K’s reorganization as a Union Territory hasn’t changed any one of these factors. Not even the free-hold rights issue and power scenario. Until there are enough incentives and solution to the persisting issues, which we expect from the new industrial policy, it will be difficult for the government to lure investors to come here,” remarks Annil Suri, Former President Bari Brahmana Industries Association, Former Chairman Federation of Industries Jammu.
“We have submitted the suggestions for industrial policy to the Union Government, and the work is in progress,” says Anoo Malhotra, Director, Industries & Commerce, J&K.
Pertinently, it has been reliably learnt that the new industrial policy can be announced along with the Union Budget for J&K in the Parliament.
Moreover, the state industrial policy is to continue for one year until revoked, as per a recent government order. Now, if the central industrial policy comes, it is not known if it will be an amalgamation of the state-central policy, or they will exist simultaneously.
“This confusion is not only among the industrialists, but also among the authorities. However, we hope this confusion is sorted out as soon as possible, as such it does not carry on to the investors looking forward to come here,” says an industrialist.
Further, Lalit Mahajan, President, Bari Brahmana Industrial Association, mentions that the industrial incentives such as Capital Investment Subsidy (CIS), 3% interest rebate on working capital, 100% insurance premium rebate, freight subsidy, 29% IGST refund, 58% CGST refund, and Income Tax Holiday, being given by the centre under a scheme titled ‘Industrial Development Scheme for the State of Jammu and Kashmir’ will terminate in March 2020.
“Investors in the Summit, especially for the manufacturing sector, would feel deceived if they are called here for these soon-to-end incentives under IDS. Either the government should announce extension of IDS for another year, or give better incentives in the new industrial policy,” says an industrialist.
“Government must be truthful to the investors about what all incentives are there and what not, and publicize them as much as possible,” Lalit asserts.
Also, industrialists allege that so far none of the local stakeholders have been taken into loop for the proposed Investor Summit.
“The summit should not only be about the investors from other states and countries. We have investors, both existing and prospective, in J&K too. They should also be taken into consideration when planning the summit,” Lalit says.