Challenges of Debt Relief in Kashmir’s Industrial Sector
Debt relief is a crucial step in helping struggling Micro, Small, and Medium Enterprises (MSMEs) in Kashmir, but it is not enough on its own. The Kashmir Chamber of Commerce and Industry has suggested a structured approach to revive these businesses, emphasizing the need for a dedicated fund of at least Rs 50 crore. The proposed plan includes a combination of interest-free loans, capital investment subsidies, and beneficiary contributions to ensure sustainable rehabilitation.
Past efforts to rehabilitate sick MSMEs have faced setbacks due to the inability of promoters to secure funding or access soft loans. The root cause of their financial distress is not lack of viability but prolonged disruption. Establishing a separate rehabilitation cell within the Industry Department, along with district-level committees for coordination, could significantly improve the success rate of such initiatives.
However, the larger issue lies in the overall investment climate in Kashmir. Despite policy announcements, there is a lack of confidence among local enterprises. The aftermath of the Sheikh–Indira Accord saw significant investments in tourism and small industries, which were wiped out during the turmoil of the 1990s. The lasting impact of this economic and psychological damage has yet to be adequately addressed.
In order to promote industrialization in Kashmir effectively, there is a need for investment insurance, risk-sharing mechanisms, and realistic credit margins. Without these essential components, incentives provided by the government may only serve to subsidize failure rather than foster sustainable growth. It is imperative for the budget to reflect the reality of the situation on the ground.
The Chamber of Commerce has long advocated for Kashmir to receive benefits similar to those granted to structurally disadvantaged regions like the North-East, including investment insurance, incentives for existing units, and location-neutral tax benefits. Without such support, Kashmir will continue to be marginalized in the industrial landscape.
Cluster-based development has been identified as a viable path for industrial growth in Kashmir, with proposed clusters in various sectors such as gems and jewellery, information technology, marble and granite, food processing, and handicrafts. However, these initiatives have faltered due to challenges in land acquisition, funding, and implementation.
In conclusion, Kashmir’s private sector is not seeking charity but fair opportunities for growth. The key to successful industrialization lies in listening to the needs and experiences of those who have invested in the region. Without proactive measures and tailored policies, industrial development in Kashmir will remain a distant goal.
