SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) has accused the Department of Industries and Commerce (I&C) of discrediting various government guidelines and policies on the revival and rehabilitation of sick industrial enterprises.
Expressing concern over the growing sickness in MSMEs in Jammu and Kashmir (J&K), FCIK has regretted the abysmal and disappointing role played by the I&C department in analyzing and addressing this critical issue in accordance with the policies and guidelines issued by both the J&K and central governments.
“While the sickness in industrial units is a global and normal phenomenon, the growing sickness in the industry in J&K has multiple reasons, mostly beyond the control of entrepreneurs, which need to be ascertained and analyzed for appropriate government intervention,” reads FCIK’s statement.
FCIK has pointed out that successive industrial policies launched in Jammu and Kashmir provided for an inbuilt mechanism for the revival and rehabilitation of sick industries. This mechanism was first approved under Government Order No. 47-IND of 1999, dated 10-02-1999, and was continued in the industrial policies of 2004, 2016, and 2021. It envisaged the constitution of a State Level Revival Committee (SLRC) for analyzing and approving the revival programs of potentially viable sick units.
“In addition to this, the current policy also mandates the applicability of guidelines for the rehabilitation/revival of MSMEs notified by the Ministry of MSMEs via Notification No. S.O 1432(E) dated 29-05-2015, along with the Framework for Revival and Rehabilitation of MSMEs issued by the Reserve Bank of India via RBI/2015-16/338FIDD.MSME and NFS.BC.No.21/06.02.31/2015-16 dated 17-03-2016, making it mandatory for concerned departments and banks to follow,” claims FCIK.
FCIK has also expressed regret over the discontinuation of the State Level Inter-Institutional Committee (SLIIC), formed under the guidelines of RBI, which aimed to address coordination problems for the rehabilitation of sick MSMEs and provide a useful forum for interfacing between government departments and term lending institutions/banks, with participation from industry representatives.
Furthermore, FCIK has blamed the government for not following through on its commitment to establish an Asset Reconstruction Company (ARC) in partnership with J&K Bank, as declared in the state government’s Budget Speech of 2015-16. This initiative aimed to facilitate asset stripping where necessary and formulate revival packages when possible. FCIK regretted that the government of J&K and the central government had approved a corpus of Rs. 15.00 Crore and 100 Crores, respectively, for the revival and rehabilitation of sick units, which remained unrealized.
FCIK has formally raised these concerns with the UT’s Chief Secretary and urged him to take notice of the non-implementation of government policies and guidelines by subordinate departments and banks. The organization has informed the Chief Secretary that concerned departments and banks have not conducted meetings of SLRC/DLRC, SLIIC, or meetings under the MSME Framework and other guidelines for years. Contrary to these initiatives and guidelines, banks have initiated unethical and illegal actions against MSMEs, forcing them to sell their industrial units, in addition to their ancestral properties mortgaged to banks for loan liquidation.
FCIK has conveyed to the Chief Secretary that the situation is grim and alarming for the survival of existing units, and the lack of action is likely to affect the prospective industrialization program launched by the Government of Jammu and Kashmir, with the active support and initiatives of the Government of India.