SRINAGAR: A spokesperson of the Kashmir Chamber of Commerce and Industry stated that the business community of Kashmir was undergoing a period of unprecedented stress and turbulence and heading towards financial instability.
According to the statement, the business organisations of Kashmir in their interaction with the Union Finance Minister on March 17, 2020, had been assured that the Government was in the process of finalizing Kashmir specific interventions.
“The economic impact and job losses suffered by people engaged by the community in furtherance of their business undertakings, during the post-August 5, 2019 period developments till mid-March were exhaustively explained and well appreciated,” said the statement.
The statement said that the Preliminary Loss Assessment Report of the Kashmir Chamber of Commerce and Industry which has conservatively estimated the losses for a period of 4 months to be in the vicinity of Rs 18,000 Crores with 5 lakhs jobs lost was also discussed.
“We were assured that the Government would be taking urgent policy decisions and interventions to protect the business establishments and economy of Kashmir,” said KCCI statement.
“Due to the sudden infliction of the COVID-19 Pandemic, all focus was understandably diverted towards controlling it’s damaging impact. With experts predicting a prolonged period of deep recession and massive GDP contractions, most of our sectors face permanent and irreparable damage,” it said.
“The global focus has now shifted towards the revival of crippled economic activities and India has also announced it’s intentions in this regard by the declaration of the Rs 20 Lakh Crore package. The details of the package have left us concerned because the distress of Kashmiri business community appears to have been left unaddressed,” it added.
“To briefly recall the distress, Kashmir is undergoing the tenth month of what has now become the world’s longest lockdown which started with the issuance of Government Order No. Home-881 of 2019 on the 2nd of August, 2019 which advised tourists and yatri’s to curtail their stay in the Valley. The order caused widespread panic and not only tourists and yatris but almost all non-resident Kashmiris working in the various commercial projects and business establishments left the Valley,” said the KCCI spokesman in a statement.
“Be that as it may, Kashmir has over the years witnessed a number of enabling interventions by the Government. The recent ones being after the floods in 2014 and following the five-month turmoil in 2016. Lifelines in the shape of additional loans, deferment of repayment obligations, reschedulements and restructuring of loans and moratoriums already stand extended and exhausted – not once but twice over – in the Valley,” he said.
The spokesman said that the downside of such stimuli is that totally dependant on the improvement of the economic scenario. “In our case, rather than improving we have been moving from one crisis to another. Post-2016 the policy decisions of demonetisation and GST implementation and other subsequent disruptions have ensured that there is no business turnaround for the borrowers. Circumstances absolutely beyond their control have frustrated all their attempts to revive businesses resultantly pushing them towards a vicious cycle of increasing debts and rapid business shrinkage,” he said.
“There is a situation of severe financial instability in the region. Because of these reasons, the requisite interventions for Kashmir necessarily have to be beyond basic economic packages to be fructiferous,” he added.
“While the economic revival package of Rs 20 lakh crore may help in revival of the economy in other parts of the Country which have witnessed disruption for two months, it’s benefits for Kashmir are negligible. Our business community has exhausted its own resources and also faces huge debts of financial institutions,” said the spokesman.
“Keeping in view the above mentioned intervening and supervening business interruptions which have made impossible all attempts at the revival of our economy, we feel that the Doctrine of Frustration and the Principle of Force Majeure come into play. We have suffered not one but multiple grounds of “Force Majeure” including floods, weather calamities, unexpected legislation, lockouts and slowdowns,” said KCCI.
“Events have prevented the competent operation of our business establishments making it impossible to meet legal and contractual obligations. The business community needs to be immediately relieved of all debts, contractual obligations and most importantly an environment conducive for business needs to be provided,” it said.
“G. C. Murmu, Lt Governor of Jammu and Kashmir, BVR Subramanyam, Chief Secretary and A. K. Mehta, Principal Secretary Finance have had several interactions with the local stakeholders and have received inputs regarding the interventions required. The business community of Kashmir is anxiously looking forward to the announcement of substantial enabling measures by the Government,” it added.
“In this time of crisis, the Government had also announced the appointment of Zubair Iqbal as the Managing Director of the J&K Bank. The business community of Kashmir views the appointment as a positive development to augment the good work done by the management of the Bank under the Chairmanship of RK Chibber,” said the spokesman in a statement.
“Now that the Government would be announcing important fiscal interventions aimed at reviving the economy, the role of J&K Bank would be critical in effective implementation of any measure,” said the KCCI spokesman.