Industry Incentives


In the various debates revolving around GST implementation in J&K, apprehensions were expressed by the industry regarding continuation of tax exemptions, available to the sector. Manufacturing in hill states and J&K were enjoying the benefit of Central Excise exemption, in the pre-GST era, under a central policy package.

J&K Finance Minister had consistently maintained that the incentives available to the Industry shall continue after GST as well. However, that was frequently disputed by the industry till last week Cabinet Committee on Economic Affairs (CCEA) in Delhi approved a new scheme to refund the Central share of Central GST (CGST) and integrated GST (iGST) to the industrial units in these states, in lieu of the excise exemption lost due to the onset of GST and scrapping of excise laws.

All the states enjoying the concessions have 4284 industrial units and these will get the relief by this policy decision. The exemptions are also understood to have been extended for a residual period of ten years upto March, 2027 and a total budgetary support of Rs 27413 crore has been approved for the same in the form of refund of Central share of CGST and IGST. It may be noted that the continuation of the incentives shall not be in the form of exemptions but as a refund since there is no provision for exemption under GST system.

Centre will refund 58% of the indirect tax collected in the form of CGST and iGST that being the Centre’s share under the devolution formula approved by the Finance Commission. The state government shall have to refund the remaining amount to the eligible industrial units from its own kitty to provide 100% benefit to such units.

This move is a breather to J&K’s manufacturing sector, but there are questions that industry must address. If the industry takes a concession it should respond by offering either of the two things: either produce to manage the local market so that imports are substituted or it should employ as many locals as possible. Ideally, the industry should do both. In the new GST regime, all states will try to mange the best of the input credit and J&K as a major consumption state must be more concerned on this front. Otherwise why should J&K pay hugely for any industry that drives skilled staff from outside and markets its produce outside J&K.

SMC, Wake Up!

The last respite to dog menace in Srinagar was in 2014, when deluge devoured nearly 5000 pariahs. But, a year later, it was found that number of dog bites recorded at the Anti Rabies clinic at the SMHS hospital in 2015-16, were almost the same, in thousands.  There is no end to stray dogs hunting, attacking and biting people of all age groups. Ask someone who moves out of home early in the morning or late in the evening.

But the question arises about the priority and the ownership of the crisis. Srinagar Municipal Corporation (SMC) has the mandate to discharge multifarious duties with primary focus on civic facilities to residents. But if someone feels insecure even to walk, leave aside other facilities, it is moment to ponder.

SMC was in news when a doctor became its head. The government did not budge in the midst of reaction from officialdom. The hope was SMC will revive. But that is yet to happen. The flower pots or lamp posts add to the beauty, but what if the basic ugliness continues.

SMS must work overtime to ensure proper maintenance of slaughter houses and inspect those doing it privately. A stamp is mandatory before anything goes to market. The streets of Srinagar are flooded with the road side food vendors. All kinds of food, but nobody seems to bother to check what exactly they are selling.

It must evolve a standard building permission system and there must be time frames. Looking at governance belts is all right but what about the areas far away from babus.  The beauty matters when the base is solid. Wake Up!

Special Position

After the Supreme Court indicated that an NGO petition challenging the legality of 35(A) should go for final hearing later August, tensions in J&K have gone up phenomenally. Given the crucial nature of the particular article of the Constitution of India, the political, social and the economic elite of most of the state have finally found a common cause. On this issue, there are no ideological and party lines now.

For Kashmir, it was a blessing in disguise. The intense debate, fueled by the gross misrepresentation of the TV, has led to massive public scrutiny of the constitutional relationship between Srinagar and Delhi. The new generation that was caught between pellets and bullets felt compelled to revisit the entire process that had led to the accession in 1947. The commentary on social media, newspapers and in public debates, the new generation has improved its pace in understanding the history that was usually restricted to only promises that were made.

The overall situation is getting charged at ground zero. But what has been a negative contribution from the government side is the lack of proper response. The two coalition partners are still exhibiting the signature dichotomy that has remained its hallmark from day one. While the PDP has taken the debate to the street, apparently to checkmate the opposition, has not worked well with its coalition partner first. The two parties are committed to maintain status quo on all constitutional issues. Within days after Prime Minister Narindra Modi’s insistence on an embrace from Red Fort, a group of ministers are in Delhi convincing the BJP of the role it must play. The two parties must go to the apex court with a joint affidavit to make things clear. In absence of it, the situation in Kashmir can take a toss for the worst that nobody would like either in Delhi or Srinagar.


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