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| SERD rebuts Govt's vehement claims; says corruption, governance deficit root of J&K's industrial backwardness | | 'Entrepreneurs forced to 'pay' to get things done' | | Syed Junaid Hashmi
JAMMU, Nov 22: Owing to corruption and governance deficit, Jammu and Kashmir has failed to attract investors from across the country and even discourages local entrepreneurs to take bold initiatives for employment generation.
In the last 10 years since the Central government announced a special package for Jammu and Kashmir, not much has changed. Respective governments have remained complacent and hence, failed miserably in bringing about an industrial boom in a state ruined by violence, corruption and governance deficit. This scenario has seriously affected the government's initiative of employment generation.
Condition of ensuring at least minimum employment to the bonafide residents of the state is often violated by most of the industrial units in all these states. The owners of these units admit that they have to manipulate their records to comply with the conditions laid down by the state governments. This rebuttal to the Chief Minister Omar Abdullah's vehement claims about the industrial scenario of Jammu and Kashmir has come from Socio-Economic Research Division of Planning Commission of India.
In its report, SERD has painted a grim picture of the industrial scenario. It has stated that special package has led to limited and restricted industrialization in Jammu and Kashmir yet it is still far behind other neighbouring states namely Haryana, Punjab and Uttar Pradesh. SERD has reasoned governance deficit as major contributor to the disgusting industrial scenario.
It has said that good governance is the most important factor facilitating investment into a state while adding that entrepreneurs are forced to "pay" to get things done. The perception of high levels of corruption in a state discourages investment. This is a fundamental issue that needs to be addressed by the government. SERD has stressed that government needs to work on lowering the cost of doing business.
Division has advised the government to introduce strategic measures to weed out corruption and bribery where they exist. More transparency should be brought in sanctioning and disbursement of the package incentives. At the same time steps should be taken to improve working conditions and remuneration of public service officials. Greater use of IT interface should be ensured thereby minimizing chances of corruption and ensure time-bound settlement of claims and subsidies.
Further, it has said that a simpler application procedure would also reduce the costs of implementing the incentives. Moreover, in the specific case of tax-related incentives, they can work effectively if the underlying tax regime itself is also relatively well-designed, administered and enforced.
Further, referring to Jammu and Kashmir having prescribed the condition of ensuring at least minimum employment to the bonafide residents of the State, SERD has said that this condition is often violated by most of the industrial units in all these states, though on several occasions it was observed that these units often manipulate the employment data to show more employment of bonafide residents. They admit that they have to manipulate their records to comply with the conditions laid down by the state governments.
This fact has been highly reported in the local media and is widely accepted. Division has said that there is hardly any enforcement mechanism regarding implementation of this condition. However, the reasons for non-employment of bonafide residents range from the official version of non-availability to lack of skills and training in the residents to their reluctance and inability to do hard work.
The industrialists maintain that the local people are not able to do hard physical labour work and have high tendency of absenteeism, says the report of the SERD. Moreover, the local labour is also lacking in skills and training. They also have fears that the local labour may indulge in unionism which will harm the business interests. There is a clear preference towards employing migrant labour from Bihar, Uttar Pradesh and others states who do not resort to hartals and strikes.
It needs to be mentioned here that scheme of package for special category states is under implementation for providing concession/subsidy to boost industrial investment in Jammu and Kashmir, Himachal Pradesh and Uttarakhand in order to reduce regional imbalance. The scheme was under implementation for providing incentives to J&K w.e.f. June 2002 and was extended to HP and Uttarakhand w.e.f. January 2003.
Under the package Central Investment Subsidy, Central Interest Subsidy, Comprehensive Insurance Subsidy and exemption on income tax and excise duty are given to industrial units established in these states. |
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