Industrial incentives withdrawal forces closure of units in J-K

"The sudden incentive withdrawal by the Union Government has shocked many investors who have their industrial units or have processed their cases for setting up new units in the state," Ram Sahai, president, Chamber of Commerce and Industry, Jammu said.

The withdrawl has halted the growth of industry in Jammu and Kashmir. Moreover, fate of many upcoming industrial units have also been jeopardised. Sahai maintained that after these incentives were announced in J&K, Himachal and Uttarakhand in 2002, investments in J&K has been nearly of Rs 3,580 crore so far and 1,287 industrial units were set up.

Some of the major industrial houses like Cipla, Cadila, Sun Pharmaceuticals, Jindal Industries, Berger Paints, Samsug, Hitachi, Philips, United Phosphorus Ltd and Jindal Drugs Ltd etc also made huge investments at Samba, Bari Brahmana (Jammu) and Kathua.

Referring to the fate of menthol manufacturing units, Sahai said, "with the closure of 56 Menthol units in just one month, nearly 2,800 workers have lost their jobs. It is feared that within next one month about fifty percent of the industrial units will be closed in the state. About half a dozen metal units have also stopped production."

Chamber president said that the package of incentives, which was for ten years has been changed after five and half year, which raises a question mark at the credibility of the Central Government.

He pointed out that the total estimated benefit of the Central Excise refund in the country was Rs 87,000 crore out of which area based benefit was Rs 8,500 crore. Total benefit for J&K from Excise refund is Rs 820 crore only.

With many units under zero per cent category like menthol and other items of the mass consumption and also some other items on which duty has been reduced from 16 to 8 per cent, the total liability in future would come down to a maximum of Rs 500 crore.

The Chamber urged Prime Minister Manmohan Singh to review this decision and save the J&K industry, which has seen some growth for the first time after five decades.