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During the hearing in the Supreme Court over abrogation of Article 370, the Centre repeatedly argued it was a hindrance to “development and progress” and after the August 5, 2019 decisions, “investments have started coming” into Jammu and Kashmir.
In almost three years since the Jammu and Kashmir government announced a new industrial policy in January 2021, the Union Territory has received proposals worth Rs 84,544 crore in as many as 42 industrial sectors. However, actualization of these proposals have been a tad sluggish.
Till date, 414 units (266 in Jammu and 148 in Kashmir) have been registered with actual investment received on ground standing at just over Rs 2,518 crore. The administration has, however, received Rs 13,777 crore in land premium against proposed units.
It is in the hospitality sector, however, that the UT’s potential has remained grossly underutilized. Investment proposals for setting up hotels in J&K amount to just Rs 87 crore till date. Sources said things have moved slowly due to paucity of “appropriate” land.
“In this sector, provision of land at appropriate location is a requirement of the industry. A hotel needs a view. Things have not moved at desired pace on this front. There is a perennial paucity of rooms in the valley,” an official in Delhi said.
Notably, the government had taken foreign delegates to Kashmir for the tourism meet of the G20 event and underlined how tourism was booming in Kashmir. Solicitor General Tushar Mehta, while arguing in Supreme Court about how abrogation of Article 370 had been beneficial to Kashmir, recently said, “Now people have realised what they had lost. Now…investments are coming. Now, because policing is with the Centre, tourism has started…16 lakh tourists have come.”
Almost 60 per cent of the investment proposals in terms of value (Rs 50,538 crore) are for Jammu, the balance Kashmir. However, in terms of the number of proposals, only 1,551 or 25 per cent of the total 6,117 are for Jammu. The balance 4,566 proposals are for Kashmir and entail an investment of Rs 34,006 crore.
The government hopes this will generate over 1 lakh jobs.
With J&K continuing to attract businesses, the UT administration is fast running out of landbank; even the Rs 28,400 crore Central incentive scheme for investment has reached its quota of commitment. A proposal to increase the incentive commitment to Rs 75,000 crore is pending with the Centre for over a year, government sources said.
The Central scheme had allocated included incentives such as 300% GST refund on investment, interest subvention on loans, 30% capital incentive and working capital incentives.
A total of 1,767 units have so been allotted 11,861 kanals of land completely exhausting government’s existing land bank. Of these, 530 units in Jammu have been allotted 7,295 kanals in Jammu and the rest have gone to Kashmir for 1,237 units. It is now in the process of acquiring another 20,000 kanals, but that sources said could take time.
“The actual investments might look small compared to the quantum of proposed investments, but one must understand any industry has a gestation period of two-three years from acquisition of land, setting up of machinery to beginning production. Then there was the pandemic. Things have now been set in motion and the momentum will begin showing expected results in a year’s time. We are trying to maximise the region’s inherent strengths in sectors of horticulture, tourism, education and healthcare,” a senior J&K administration official said.
“Kashmir is not a natural destination for big industrial investments. The results of the 2021 scheme have been good. But it is already reaching its full capacity and if more incentives are not committed, it may not move forward with the same pace,” a senior government official privy to developments on this front said.
“Before 2019, the average annual investment in J&K was just around Rs 300 crore,” he claimed.
While some big companies such as JSW and HFCL have made some investments in Jammu and Kashmir, others such as Apollo Hospitals have not moved forward after initially showing interest. JSW has established a profile-sheets making unit in Pulwama which is already into production. Apollo, which had shown interest in opening a big hospital in Jammu, could not finalise its lease deed with the government for acquisition of land. Sources said Apollo is pushing for a 99-year lease of land while the changed land laws of the UT allow only 40 years at one go.
In an interview with The Indian Express, LG Manoj Sinha had earlier said the UT administration was still in talks with the healthcare group and was hopeful of things working out.
A perusal of proposals received by the UT administration shows 20 per cent of all investments are proposed in sectors of healthcare, cold storage/warehousing, food processing and packaging.
Healthcare is a major sector where the UT administration expects significant investments. It has already received over Rs 7,700 crore worth of proposals in the sector. Bihar’s Milli Trust, Areesha Royal Hospital, Universal Health Group and Apollo have alone deposited over Rs 1,200 crore in premiums against proposed investments.
Sources, however, said given the potential of the sector, it would need some extra incentives as the GST incentive is not available to it.
To boost the tourism sector, J&K administration officials said the Jammu and Kashmir Tourism Development Corporation (JKTDC) is outsourcing 11 of its properties on a PPP model for 30 years and tenders have already been floated. The administration is expecting an investment of Rs 150 crore through this.
A senior official said the administration is pushing for more and more homestays and has been able to create over 10,000 such spaces with close to 16,000 rooms.
According to officials, to tide over paucity of land in J&K, the government has already amended land laws to allow acquisition of land by industries which government will facilitate through land use change, provision of electricity and road connectivity.
“Land acquisition by the government is a cumbersome process. That is why we are encouraging industry to purchase land directly from land owners. There are patches in Jammu, Kathua and Samba where agricultural land does not produce much. These are well connected too. People are eager to sell. Then on many stretches on either side of Jammu-Srinagar highway there is land that can be acquired for industrial development. Government will facilitate on the legal and infrastructure side,” an official said.
The government recently also embarked on an eviction drive to free up what sources said was 12 lakh kanals of encroached government land. The drive, however, was stopped following a public outcry. The government had last year also changed Land Grant Rules asking those running businesses on government leased land to vacate after the expiry of their lease.
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