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Budget fails to cheer industry

JAMMU: The annual Budget presented by Finance Minister Haseeb Drabu has again created uncertainty in the industrial sector as there is no clarity as to how the government wanted to address the problem of unemployment and attracting investments.



Sumit Hakhoo

Tribune News Service

Jammu, May 30

The annual Budget presented by Finance Minister Haseeb Drabu has again created uncertainty in the industrial sector as there is no clarity as to how the government wanted to address the problem of unemployment and attracting investments.

The Budget speech read more as “platitudes” to the industry than anything substantive. The PDP-BJP government had kept on hold the new industrial policy adopted by the State Administrative Council on March 14. That policy envisaged more than Rs 20,000 crore investments by industrialists and jobs to 150,000 people apart from thrust on transparency, accountability and e-governance.

Separatists whose constituency lies in unrest, opposed the policy saying that non-locals would set up units, marginalising locals and take their land, whereas the policy said industrialists could take the land on lease for 40 years, extendable by 90 years depending on the agreement. There was no clause for forcible leasing out of the land.

The government has put the policy on hold without looking at the fact that industrialists from other parts of the country were wooed by successive state governments and they had been investing in the state since 1963.

It was expected that the Budget would spell out something on the industrial and employment-friendly measures, but to the disappointment of the local industrialists too, there is uncertainty over the new industrial policy as the government has failed to offer anything substantive for the promotion of industry in J&K.

The Budget presented by the PDP-BJP coalition has linked the implementation of any industrial policy with finalisation of Goods and Services and Tax (GST) by the Central government aiming at creating a uniform tax regime across the country, leaving industrialist surprised.

“Till such time as there is clarity on the implementation of the GST and its applicability to the state, it will be difficult to formulate a long-term industrial policy. However, prior to the formation of the new government, a policy for the state has been notified. This will require substantive changes once the GST regime is implemented,” says the Budget document presented by Drabu in the Legislative Assembly in Srinagar.

Though Drabu said the industrial associations of the state ‘will be encouraged to develop on their own or in partnership private industrial estates/parks on commercial lines’, those associated with the industrial sector see it as a futile exercise as there is no clarity on the policy to be followed by the state to attract investment.

Budget document claims that the government will go all out to attract investments in industrial estates or elsewhere in the states by providing an enabling environment and incentives, but it will be ensured that these are governed by states existing administrative practices, regulatory norms and the Constitution of J&K.

“It is a flat Budget and quite confusing about the status of the industrial policy. We have to wait for the implementation of the GST to have a dedicated policy. This is quite surprising for the entire sector and no one will be willing to invest in the state,” said Annil Suri, president, Federation of Industries, Jammu.

The state had introduced a State Industrial Policy in 2004, incidentally brought by late Mufti Mohammad Sayeed, when he was heading the PDP-Congress coalition between 2002 and 2005.

The 10-year-long policy expired on March 31, 2015, and during the presentation of the annual Budget on March 22, 2015, Drabu, who was the Finance Minister when the first PDP-BJP coalition was headed by Mufti, had extended it for three months with the promise that a new policy would be rolled out by July 1, 2015.

However, a draft policy was never rolled out because of the differences between the coalition partners. The initiative taken in March this year has been stalled and no new way has been promised for the industry and jobless youth in this sector.

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