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| REVIVING ECONOMY POST AGITATION | | Govt admits ‘full blown depression’, offers relief | | EarlY Times Report
Jammu, Dec 26: As the present state administration prepares to handover the baton to newly elected government –expected to take charge in next ten days –the Governor NN Vohra has delivered on a key promise which may continue to have its positive effects for next two to three years.
In view of sagging economy –as fallout of global effect –and further serious loss to it due to prolonged agitation on Amarnath shrine land row, the Government has offered a five-point economic revival package. Though the package is aimed the making up losses to trade, industry and commerce during the agitation but it goes far beyond giving fillip to economy. The revival package has come in collaboration with the Jammu and Kashmir Bank.
Admitting that the state if facing a full blown economic depression, the Government says, “before the situation gets worse… there is need for pro-active management of the economy”. already a number of business units across the State have shut shop, some have moved out of the State and many others have laid off their employees, admitted an official spokesman while announcing the economic revival package.
The package covers the transport, tourism, industrial, horticulture, trade and commerce and other sectors and segments of the population, said an official Spokesman here this evening. The Spokesman said that the Government, in collaboration with the Jammu and Kashmir Bank, has formulated a package for economic and business revival in the State. The package envisages a better enabling environment for business to be conducted on a long-term basis, apart from the reversal of losses caused by the agitations.
Explaining the prevailing economic scenario, the package intro says that the overall macro-economic framework has been or is being structurally impaired and well established business networks have been disrupted and entrepreneurs, traders, horticulturists and transporters, indeed all segments of business, have been impacted by the agitations. Not only has the State investment climate been adversely affected, the business environment has also deteriorated rapidly. Briefly, there has been enormous loss of business and opportunity to generate incomes, even as committed liabilities like interest and salaries had to be met.
Describing the year 2008 as bad patch for economy, the government has listed a number of reasons for the slowdown: Changes in the policy regime, which have resulted in lowered protection for domestic industry, reduced their competitiveness, and squeezed their profit margins; Sharp increase in the power tariff by the Regulator, which affected the bottom line for all types of enterprises, squeezed the profit margin for some and impaired the balance sheet for some other types of small enterprises; Global recession, national slowdown and currency depreciation has had an adverse impact on the export business in the State; The virtual halt of the extensive public works programs and public investment in the past months has meant the drying up of a major source for demand, thereby causing demand, squeeze in the local economy.
While policy initiatives that lay the foundation of the Package can only evolve over time, and have to be necessarily phased, the basic contours of the policy initiatives and some initial measures are being announced today through this Package titled "Jammu & Kashmir Post Agitations: A Five Point Economic Revival Package."
The spokesman said that the package was finalized and approved by the State Administrative Council (SAC) at their meeting held on October 24, 2008. However, since the elections to the State Legislative Assembly had been announced and the Model Code of Conduct of the Election Commission of India (ECI) had come into operation, the Package could be not be announced earlier, and is being presented today.
In sum, the Package seeks to offer systemic solutions for the revival of the business environment in general. The measures suggested here-under aim at providing a better enabling environment for conduct of further business. The Package addresses the more fundamental and vital aspect of long-term viability of business operations in J&K. Unlike a one-time short-term initiative, the Package is expected to serve to revive the overall business sentiment and environment in the State on a medium to long-term basis. Necessary financial provisions, both on the Plan and Non-Plan side are being made in the current year's Budget (Revised Estimates) and similar provisions will be made for the next year.
The Package
corpus Rs one crore to the Chambers of Commerce of Kashmir and Jammu regions proportionately for creation of employment opportunities for one number of such families who lost their members or have been permanently disabled in the agitation.
Grant-in-aid to Small and Medium Enterprises with maximum ceiling of Rs 6 Crores. The Central incentives would "effectively" get restored with the State Government bearing the financial cost till the end of the current financial year
Electricity Duty incentive equivalent to 66.66% of ED (22% to 14%) to be reimbursed to consuming industrial units on a non-cash basis. The incentive schemes will be phased out gradually over a period of three years.
Government will form an Asset Reconstruction Company to take over the sick SME units which have been impaired because of the adverse macro-economic conditions.
SFC shall put in place a scheme for one time settlement of all such cases which are NPAs. The scheme will cover costs of those units that remained in operation but the capacity utilization was only of/ or up to 25 per cent of the rated capacity as certified by the Department of Industries and Commerce
Finance Department shall create a budget provision of Rs. 50 crore during the current financial year to address the requirement of payment of tax on behalf of the defaulting dealers of inter-state trade. There are 400 such dealers.
Government to take up with the Center for extending the Weather Based Crop Insurance Scheme (WBCIS) to J&K. Subsequently, it shall notify apple crop for insurance on an optional basis, which will enable all the farmers to avail of the subsidy under the Weather Based Crop Insurance Scheme.
As a succor to the passenger transport sector, the Government has decided to exempt the transport sector from payment of passenger tax for the period June 2008- August 2008.
Amnesty to the transport sector to clear their arrears by 31st of March, 2009. The transporters doing so will be provided relief on account of penalty and interest.
From J&K Bank
Period of 5 years for repayment of transport loans will be increased to 7 years to provide comfort to transport operators. EMI amounts shall be reduced accordingly in respect of all existing loan accounts in this sector. The transport operators will also be entitled to postponement of three monthly or one quarterly installment(s) for repayment of principal. The postponed installments shall be recovered by adjusting the EMI for the reminder of the tenure as extended.
Any adhoc facilities /over drawings granted under approved arrangement in respect of working capital limits concerning activities of trade, industry (including charge/ corporate industrial units), transport, fruit, services etc during the months of June, July, August, September 2008, will be extended till 31st March 2008.
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