Avinash Azad
The Jammu and Kashmir Cements Limited (JKCL), a once-profit-making public sector enterprise, has been shuttered since 2019, with the government now pursuing its complete disinvestment. In response to a query from MLA Justice Hasnain Masoodi, who sought clarification on the reasons behind the closure of this industrial unit and its current status, the J&K government has outlined a litany of operational and financial challenges that led to its decline, culminating in a strategic decision to sell off the company and its assets.
A Cascade of Challenges
Justice Masoodi, a prominent legislator, raised concerns about the shuttering of JKCL, questioning why a profit-making entity had ceased operations. The government’s detailed response painted a picture of a company beleaguered by multiple factors over the years:
Low Productivity: A below-par productivity-per-employee ratio hampered efficiency, undermining the company’s output.
Power Woes: Frequent interruptions due to poor power supply caused significant production losses, disrupting plant operations.
Financial Strain: Insufficient working capital and lack of proper maintenance led to regular breakdowns of plant and machinery, further eroding production capacity.
External Shocks: Unforeseen events, including the devastating floods of September 2014, the unrest in 2016, and the COVID-19 lockdown in 2019, inflicted severe financial blows, halting operations for extended periods.
Mounting Liabilities: The company has been saddled with debts, including unpaid salaries, contractor bills, contributions to the Employees’ Provident Fund, GST liabilities, and dues to various departments.
“Many reasons have contributed to the decline of JKCL, and presently all the plants are closed since 2019,” the government stated, acknowledging that these cumulative setbacks rendered the company unsustainable.
Disinvestment: The Final Step
With revival deemed unviable, the Administrative Council of the Union Territory of J&K, chaired by the Lieutenant Governor, took a decisive step on October 19, 2021. Vide Administrative Council Decision No. 113/15/2021, it granted in-principle approval for the “complete sale of JKCL and its assets on an as-is-where-is basis” through strategic disinvestment. The government is now exploring options for an e-auction, inviting bids from qualified entities to offload the beleaguered company.
“Presently, the JKCL is under the process of disinvestment,” the government confirmed, signaling the end of an era for a public sector unit that once played a key role in the region’s industrial landscape.
Environmental Restrictions Compound Woes
Adding to JKCL’s challenges are environmental regulations imposed by the Jammu and Kashmir Pollution Control Board (J&KPCB). On January 22, 2021, vide Order No. 41-J&KPCB of 2021, a two-year moratorium was placed on the establishment and registration of new air-polluting industries, including cement plants, in Khrew (Pulwama district) and Khonmoh (Srinagar district)—areas where JKCL operates its facilities. This restriction stemmed from concerns over deteriorating air quality in these industrial hubs.
A review committee revisited the moratorium on December 20, 2023, and on January 1, 2024, resolved to extend it indefinitely for cement plants, stone crushers, brick kilns, mining, and hot mix plants. The ban will remain in place “till such time the annual average Air Quality Index (AQI) falls below 100 or the Comprehensive Environmental Pollution Index (CEPI) score falls below 60.” The government has committed to regular monitoring of ambient air quality in Khrew and Khonmoh, but for JKCL, this environmental clampdown has effectively sealed its fate, barring any possibility of resuming operations.
A Blow to Local Economy and Legacy
The closure and impending sale of JKCL mark a significant loss for Jammu and Kashmir’s public sector ecosystem. Established to bolster industrial growth and provide employment, the company’s downfall reflects broader challenges faced by state-run enterprises in the region—ranging from mismanagement and infrastructural deficits to external crises and regulatory hurdles. Local stakeholders have expressed dismay over the decision to divest rather than revive JKCL. “This was a profit-making unit at one point,” said a former employee who requested anonymity. “With proper investment and planning, it could have been saved. Selling it off feels like giving up on a piece of our economic heritage.”
