The state’s industrial scenario is no secret. The industrial sector is in a bad shape especially in Kashmir valley as the almost three decade long turmoil compounded with various other issues have left the sector in deep miseries.
Growth of the industrial sector and its revamp have not been on the governments active agenda. Had it been so the situation would not have been so bad as it is today. Over the past few years the industrial output in the Valley has not been upto the mark and no significant headway has been achieved in achieving a fair amount of growth in the sector.
Notably, the sector suffered another rude shock in the form of the GST tax regime. The tax regime not only put an additional burden on those who are associated with the industries but also left them with no other option than to close up their units as the production costs do not allow any entrepreneur to maintain and stay in the competitive market.
However, a ray of hope in the form of Cabinet Committee on Economic Affairs (CCEA) became visible as it approved the scheme of extending incentives to some of the Himalayan and North Eastern States in India which included the state of Jammu and Kashmir.
Ever since the extended date for industrial incentives for our State expired in July last, the State Government tried for its extension for another long term. Finally the Cabinet has approved the scheme of extending the incentives for a period of ten years beginning from July 1, 2017 to March 31, 2027 for identified industrial units.
The scheme has been allocated an amount of rupees 27,413 crores. The support is provided under budgetary support under GST regime for eligible industrial units in Jammu and Kashmir and various other states.
The State association of industrialists had been demanding extension for a long time and the State Government was under great pressure because it involved hundreds of small and big industrial units which were badly affected.
However, the announcements made by either the federal or the state government need to reflect on ground. These incentives if announced should ensure the revival of defunct industries and also provide a support to the existing industries to modernize them and make them viable.
In addition the state government should ensure a thorough campaign trying to aware the young and upcoming industrialists about the extension of incentive scheme and should dispel all doubts and apprehensions that were created about the implementation of GST and its fallout.
Under the new GST regime, there is no provision for exemption but there is one section under the Act which permits refunds. It is this provision that has been invoked in the case of Jammu and Kashmir state.
It is expected that within next fortnight the Finance Department will work out the exact modalities and incentive structure that will benefit local industry, investors and consumers.