SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) has urged Chief Minister Omar Abdullah to intervene with the Central government to ensure that local micro, small and medium enterprises (MSMEs) are not excluded from participating in Centrally Sponsored Schemes and projects executed through Central Public Sector Enterprises (CPSEs) in Jammu and Kashmir.
The demand was raised at the conclusion of a two-day CPSE Level Vendor Development Programme organised by the Ministry of MSME at the Sher-i-Kashmir International Conference Centre (SKICC) in Srinagar, where industry representatives flagged concerns that large public investments were failing to translate into local economic gains.
In a statement, FCIK said it had asked the Chief Minister to engage with the concerned Central Ministries to seek relaxation of procurement and qualification norms that currently govern these projects. Without such measures, the body cautioned, most contracts and supplies would continue to go to firms from outside the Union Territory.
“Without such intervention, public investment will continue to bypass local industry,” the federation said, adding that development projects must result in local employment, capacity building and economic empowerment rather than benefitting outside entities alone.
Representatives from several CPSEs, including Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), NHPC, National Small Industries Corporation (NSIC), Government e-Marketplace (GeM), Food Corporation of India (FCI), Hindustan Petroleum Corporation Limited (HPCL), Power Grid Corporation, Central Public Works Department (CPWD) and National Highways Authority of India (NHAI), attended the programme and presented their procurement and execution procedures.
During the discussions, most CPSEs reiterated their adherence to the Central Public Procurement Policy, which mandates that at least 25 per cent of procurement be sourced from Micro and Small Enterprises. However, they clarified that the policy does not distinguish between local and non-local MSEs. As a result, enterprises from Jammu and Kashmir do not receive any preference over suppliers from other states.
Officials from these enterprises said they were unable to extend any purchase or work preference to local firms unless specific relaxations or provisions were approved by their respective ministries in consultation with the UT administration.
FCIK expressed concern that thousands of crores of rupees worth of Centrally Sponsored and Central Sector projects are being implemented in the Union Territory through CPSEs and, in some cases, through UT-level public sector undertakings that strictly follow central procurement rules. According to the federation, conditions such as high turnover thresholds, bundled works, large-volume supply requirements and stringent experience criteria have effectively excluded many local manufacturers and contractors from the bidding process.
Describing the situation as “astonishing and deeply concerning”, the federation said projects intended to drive the development of Jammu and Kashmir were largely being executed by outside agencies and suppliers, leaving local enterprises underutilised. It argued that this approach was depriving the local economy of employment generation, skill development and industrial growth.
The industry body maintained that even partial routing of these projects through local enterprises could significantly strengthen the region’s industrial base and create sustainable employment.
FCIK also cited what it described as a successful precedent from the past, when engagement by the then state government with the Ministry of Railways resulted in directions to IRCON to extend purchase preference to local enterprises. According to the federation, that intervention benefited hundreds of local units, improved their capacities and generated employment.
The concluding session of the vendor development programme was presided over by Director Industries and Commerce, Kashmir, Khalid Majid, who assured participants that the issue would be taken up with higher authorities. He said the administration would explore measures to ensure that local enterprises benefit from ongoing projects and added that the Union Territory’s revised procurement policy, currently under review, aims to strengthen the role of local firms in public procurement.
Earlier, Director Handicrafts and Handlooms Masarat-ul-Islam and Managing Director of Kashmir Power Distribution Corporation Limited (KPDCL) Mehmood Ahmad Shah addressed participants and shared sectoral insights. Joint Director, MSME, Amit Kumar Tamaria delivered the keynote address and assured full support from the Ministry of MSME to local enterprises, while Assistant Director MSME Suhail Allaqaband said similar programmes would be organised regularly.
A large number of industry leaders from across the Valley participated in the two-day event under the banner of FCIK, led by its representatives including Shahid Kamili. Participants raised queries and concerns during interactions with CPSE officials. Members also engaged in discussions with Government e-Marketplace representatives and pointed out what they described as operational loopholes in the system.
