Avinash Azad
The Jammu and Kashmir government has finally admitted in the ongoing Budget Session that a significant number of small-scale industrial units in the Union Territory are struggling, running in losses due to years of administrative failure and lack of timely interventions. The startling admission came in response to a question raised by MLA Chenani, Balwant Singh Mankotia, regarding the financial distress faced by these industries.
Govt Admits MSMEs in J&K Are in Trouble, But Has No Mechanism to Monitor Losses
When asked whether it was a fact that small-scale industrial units in J&K were suffering financially, the government shockingly replied that the Industries and Commerce Department does not directly monitor the financial performance of these units. Instead, it vaguely cited various policy provisions, including the J&K Industrial Policy (2021-30), the RBI’s framework for MSME revival, and the Raising and Accelerating MSME Performance (RAMP) program, as supposed safeguards.
The government also highlighted the establishment of a J&K MSME Health Clinic with financial support of Rs. 30.64 crore under the RAMP program. However, industrialists argue that these schemes remain largely on paper, with bureaucratic hurdles making it difficult for struggling businesses to access any real relief.
Big-Ticket Industrial Investment Confined to Kathua, Leaving Other Districts in Limbo
MLA Mankotia also raised concerns about the establishment of large-scale industrial units in Kathua, Udhampur, and Samba districts. The government’s response confirmed that only the Bhagthali Industrial Estate in Kathua has been designated for large investment projects requiring over 200 kanals of land. While industrial estates in other districts accommodate industries of all scales, there appears to be no concrete plan to develop them into major industrial hubs. Industrialists in Udhampur and Samba have repeatedly demanded improved facilities and infrastructure to attract investment, but the government’s response suggests a lack of commitment beyond Kathua.
GST Reimbursement: Bureaucratic Red Tape Delays Payments to Industries
The MLA further pressed the government on the issue of pending GST bill reimbursements for J&K industries. The government claimed that between 2017-18 and January 31, 2025, a total of Rs. 2355 crore had been reimbursed, including Rs. 295 crore in the current financial year. However, industrialists allege that many businesses are still waiting for their dues, as reimbursements are being cleared only on the “availability of resources.” This bureaucratic approach has left many struggling industrial units in financial distress, unable to sustain operations due to liquidity issues.
Udhampur Industrial Estate Faces Infrastructure Collapse
Perhaps the most damning admission by the government came in response to concerns over the acute shortage of water, erratic power supply, and crumbling road infrastructure in Udhampur Industrial Estate, Battal Ballian. The government acknowledged these deficiencies but only outlined ongoing and proposed.
