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Boost For J and K Industry (8 January 2021)

Boost For J and K Industry (8 January 2021)


The Jammu and Kashmir administration announced a new industrial developmental scheme on Thursday. With a total outlay of Rs 28,400 crore, the scheme aims to encourage new investment and to take industrial development to the block level. While making the announcement, Lt Governor Manoj Sinha said the scheme will go a long way in ushering an era of socio-economic development of the region and for catering to the aspirations of people. The industrial development scheme is from the period of date of notification up to the year 2037 and aims at creating 4.5 lakh jobs, while also attracting ?20,000 crore investments in the Union Territory.


Central Sector Scheme: it is 100% funded by the Central government.

Implemented by the Central Government machinery.

Formulated on subjects mainly from the Union List.

Summary of the Debate

Key features of the scheme:

  • Beneficiaries: Scheme is made attractive for both smaller and larger industrial units.
  • Investment: The financial outlay is Rs. 28,400 crore for the scheme period 2020-21 to 2036-37 (17 years).
  • Capital Interest subvention: Smaller units with an investment in plant & machinery upto Rs. 50 crore will get a capital incentive upto Rs. 7.5 crore and get capital interest subvention at the rate of 6% for a maximum of 7 years.
  • Working Capital Interest Incentive: It provide all existing units incentive at the annual rate of 5% for maximum 5 years. Maximum limit of incentive is Rs. 1 crore.
  • GST Linked Incentive: The scheme has been simplified on the lines of ease of doing business by bringing one major incentive- GST Linked Incentive- that will ensure less compliance burden without compromising on transparency.

J&K – The issues around the state – Civilsdaily

Major challenges in J & K:

  • J & K has a very high standard of living, it really does not have any industry except for cottage industry, handicrafts, horticulture and tourism and that too tourism has been dependent on the overall socio-political situation and atmosphere in Kashmir.
  • Though lots of steps taken to counter cross border terror threat that Pakistan has perpetuated for the last 30 years, security is a challenge to a certain extent in J & K despite the fact that India’s counter insurgency operations have been pretty successful in the last couple of years.
  • In the last 30 years, tourism industry was massively hit because of the disruption, insurgency sponsored by Pakistan.
  • We also saw through this period a huge exodus of an entire minority community that is Kashmiri Pandits from the Kashmir valley.
  • Thousands of Kasmiri muslim traders left the valley because there was no business, there was no prospects of industry in Kashmir.
  • In the last 70 years or so, upper reaches of Jammu region did not have any investments at all. The upper region of Jammu for example Punch, Rajori, Bbadarwa, etc. all these areas have tremendous potential whether it’s tourism or industry.
  • Because of the politics of state of J & K, it was essentially Kashmir centric politics throughout the last seven decade and Jammu did not see any kind of development.
  • A lot of people from Jammu region who left Jammu to find jobs and opportunities to other states.

Vision of the scheme:

  • The scheme aims to take industrial development to the block level in UT of J&K.
  • The main purpose is to nurture existing investment in J & K and the primary aim of the proposed scheme is to bring about radical transformation in the existing industrial ecosystem of the J & K.
  • It will boost the product availability and also employment generation and also consumer satisfaction with the people who are going there as a tourist or for the investment purposes.
  • Youth in J&K can shift from instead of engaging in anti-social activities, they can get better employment.
  • There is possibility of repairing and restoring the industry that has been hit and there is possibility of building new industry.
  • Through this package, a lot of investment will go into tourism, education, healthcare, etc.


  • The entire union territory of J & K does not have the security threat as some parts of Kashmir have. The mistake that every successive government has made is that based on the certain areas which remain a security concern in Kashmir, the rest of the UT has also suffered because the government has held itself back from pushing economic growth and from pushing development in other areas which are safe.
  • So, a lot of areas within Kashmir valley also are pretty safe to do business, industry and even tourism.

Important points made by the Guests

Aarti Tikoo Singh, Senior Journalist 

  • This package was really overdue, it was needed, not just because people need jobs and people need opportunities but also for overall political and social stability.
  • This industrial package is going to not only bring investments, it is going to help youth of Kashmir to look at opportunities within and not migrate out of Kashmir.
  • Besides government’s investment, there is also lot of scope for the public private partnerships.
  •  Incentives are provided to them, taxes exemptions are provided to them so that private investors can also come up and now the land reforms have been taken place and anyone can get there land for a development activities.

Farooq Amin, Chairman, CII, J&K 

  • Few things have been missed in this because keeping in the view the geographical location of or state, we are at the extreme end. So, we expected some intervention in freight subsidies and everything which would have increased our transportation and exports because we are on terrain wherein we spend a lot of capital and money on resending the goods to the national and International market.
  • Post covid, industries in J & K have faced a lot of issues.

Dr. Muniraju S.B., Dy. Advisor, J&K & Ladakh, Niti Aayog 

  • There are lots of industries projects are already going on. So, to motivate and incentivize existing programs and also come up with new projects and new industrial development activities in the J & K, the GoI has taken a lot of initiatives and this investment program is initiated the main areas which we proposed extension of this project up to 2037.
  • We have the objectives under the schemes like new and existing units both in manufacturing and service are eligible for getting the benefit out of this scheme and new units with investment up to Rs 50 crore are eligible for capital investment incentives and also an existing unit will become eligible for capital investment incentives and central interest subvention.
  • If it carries out substantial expansion that is investment additional 25 percent of the original investment in plants and machinery and all eligible existing units can avail working capital interest subvention incentives under that and also service units to become eligible for incentives on minimum investment of Rs 1 crore to the eligible value of construction building and all their durable physical assets and trading units are not eligible.


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