Kashmir Industry Body Seeks Rs 600 Cr For Sick Industries

20 January 2009
The Indian Express

Srinagar: Claiming that more than 87 per cent of industrial units in the Kashmir valley are sick, the local industry has sought from the state government Rs 600 crore for the revival of these units. Quoting a survey by the Entrepreneurship Development Institute, Ahmadabad, the Kashmir Chamber of Commerce and Industry President Mubeen Shah said 87.13 per cent of units in the valley have turned sick due to the situation in the state, while the remaining are on the verge of sickness. 'Certain steps are necessary at the moment for revival and rehabilitation of the sick micro, small and medium enterprises (MSME) in the valley... The total estimate of this one time debt relief is not more than Rs 500-600 crore,' KICC said in a report submitted to Jammu and Kashmir Chief Minister Omar Abdullah in Srinagar. The rehabilitation should include hotels, houseboats, transport, handicraft, small scale industries, retailers and wholesalers, KICC said. Further, Shah said he has already suggested to the Ministry of MSME to create a fund having a corpus of Rs 50 crore for revival and rehabilitation of the sick industrial units. 'The funding pattern may be on the basis of 60:30:10 60 per cent interest free loan from government with five years moratorium, 30 per cent capital investment subsidy and 10 per cent beneficiary contribution,' he said. Shah also raised the issue of security forces occupying the industrial units at many places and sought intervention of the Chief Minister in getting these vacated. 'Lot of our units have been occupied by security forces, resulting in sickness of these units. Some of the unit holders had to sell the properties to liquidate the bank loans.' The KCCI president said the rehabilitation of sick units could not be taken up due to non-availability of promoters' contribution and soft loans as envisaged in the state police for rehabilitation. The state government should issue guidelines to mention that coercive action would not be taken if rehabilitation is initiated by the banks. It should 'introduce a single-window clearance concept for providing relief and concessions to the sick units in the state,' he added. Shah also sought formation of a district-level body for revival of sick units, where all agencies confirm their participation in rehabilitation to expedite the process and ensure better coordination between different agencies. 'At present, Empowered Committee under the chairmanship of Regional Director of RBI and SLIIC are the two bodies that review the status of sickness in the MSME sector. There is a need to establish a district level body for the purpose,' he said. 'One of the models made by the KCCI which has been formally agreed by the Jammu and Kashmir Bank is taking over the previous loan and infusing fresh funds for revival. This needs a modification as the case presently done has entailed additional mortgage which may not be possible by other sick units,' Shah said. He also demanded freezing of loan accounts of sick industrial unit holders and conversion of the working capital loan into a term loan to be paid in easy instalments over a period of five years. The KCCI president said the Central Government should announce same investment subsidy for industrial units in Jammu and Kashmir as has been done in the case of North East States. 'We request the State Government to approach the Central Government so that similar incentives are provided for industries in Jammu and Kashmir,' he added.