Srinagar, Apr 12: The New Central Sector Scheme for Industrial Development of Jammu and Kashmir (NCSS), 2021, notified on February 19, 2021, with an outlay of Rs 28,400 crore, was projected as a transformative intervention to accelerate industrial growth, attract investment, and generate employment in the J&K, envisioned as a landmark initiative under the leadership of Prime Minister Narendra Modi and Home Minister Amit Shah.
The scheme offered a comprehensive bouquet of incentives including Capital Investment Incentive, Capital Interest Subvention, GST-linked incentives, and Working Capital Interest Subvention, aimed at enhancing project viability in a region often perceived as high-risk due to geo-political conditions.
While the scheme extends till 2037, the registration window for availing benefits was capped at September 30, 2024, effectively creating a race for registration rather than a roadmap for sustainable industrialisation. More critically, the scheme excluded the existing industrial base, except in cases of substantial expansion, leaving thousands of operational units, already struggling under structural and geopolitical constraints, outside its ambit.
This exclusion raises a fundamental question.
It is inconceivable that such a scheme would have been designed without consultation with the J&K administration.
The Apex Committee, which recommended and oversees the scheme, would have relied significantly on inputs from the Industries and Commerce Department of Jammu and Kashmir.
If the existing industry, operating under prolonged adversity, was ignored, the responsibility for this omission squarely lies with the department, which failed to represent, defend, or even articulate the concerns of its own industrial base.
This is not without precedent.
The Central Industrial Package announced in 2002 under Prime Minister Atal Bihari Vajpayee, which continued till 2016, had already demonstrated how incentives can be disproportionately cornered.
Of Rs 1160 crores disbursed over 14 years, more than 80 percent went to outside investors, largely concentrated in just two districts of Jammu province.
Instead of learning from this imbalance, the NCSS appears to have replicated and arguably amplified the same pattern.
Data emerging from the scheme is deeply concerning.
A deputation of LaghuUdyogBharati (LUB), J&K, in its recent memorandum submitted to the Union Home Secretary in New Delhi, has brought out a stark imbalance in the scheme’s implementation.
Of the total outlay of Rs 28,400 crore, nearly Rs 20,098 crores is set to be cornered by just 18 large units, leaving the remaining 935 MSME units to share the balance.
The memorandum further notes that while 2036 units had registered before the September 2024 deadline, only 953 were granted eligibility, reportedly due to financial constraints, making the skewed distribution of incentives even more glaring.
Geographical imbalance further compounds the issue.
As with the earlier package, investments under NCSS have reportedly clustered in a few districts of Jammu province, leaving vast regions of Kashmir and other districts largely untouched.
Experts have repeatedly argued that a district-wise earmarking, allocating even a proportionate share of the Rs 28,400 crores across all 20 districts, could have ensured balanced industrial growth and employment generation.
Investors, given such incentives and assurance, would have naturally diversified their presence across the region.
Instead, what has unfolded is a scheme driven by registration deadlines, financial caps, and concentration of benefits, rather than equitable industrial development.
The structural flaw of the scheme lies in its design itself.
Incentive eligibility is tied to registration before a cut-off date, rather than actual commencement of production.
This creates a perverse incentive, projects that merely register within time, even if they materialise years later, remain eligible, while those that invest and commence operations after the deadline are excluded.
Such a framework encourages speculative registrations and undermines genuine industrial activity.
Even as representations are now being made for enhancement of the scheme to Rs 75,000 crores, the underlying approach appears unchanged.
The same framework, if expanded without correction, risks magnifying existing disparities.
Reports suggest that additional allocations are being sought to accommodate more units, but without addressing the core issues of distribution, eligibility, and regional balance.
It is here that the responsibility of the Industries and Commerce Department becomes inescapable.
As the sponsoring authority, it is duty-bound not only to facilitate implementation but to continuously engage with the Government of India, flag deficiencies, and seek necessary amendments. It must place before the Lieutenant Governor and the elected government a clear, evidence-based case for restructuring the scheme, ensuring district-wise allocation, inclusion of existing units for revival and expansion, and linking incentives to actual production rather than mere registration.
There is also an urgent need to ensure that incentives are released to units that have established operations on the ground, rather than being indefinitely earmarked for projects that may or may not materialise.
A first-come-first-served approach linked to commencement of production would align incentives with real economic activity and prevent speculative locking of funds.
A crucial meeting of the Apex Committee, chaired by the Union Home Minister Amit Shah, and comprising senior Union Ministers and J&K leadership, is reportedly imminent. He has been on record repeatedly emphasising balanced growth in J&K, which makes this moment particularly significant. This presents a critical opportunity, but only if the Industries and Commerce Department rises with clarity and conviction, and the elected government steps in decisively to correct the imbalance and firmly articulate the concerns of the region’s industrial stakeholders at the highest level.
Ease of Doing Business cannot be reduced to announcing large financial packages while ignoring their design, distribution, and implementation.
The NCSS, in its current form, reflects a gap between intent and outcome, one that has disadvantaged MSMEs, skewed regional growth, and left existing industry unattended.
If this is not corrected now, the scheme risks becoming yet another example of policy ambition undone by flawed representation and passive implementation.
And in that failure, the responsibility will not lie with the scheme alone, but with those who were entrusted to shape, defend, and deliver it.
