J&K Budget 2021-22: KCCI submits detailed memorandum to Finance Minister

Srinagar, Feb 13: The Kashmir Chamber of Commerce and Industry (Inc) President Sheikh Ashiq Ahmad has written to Nirmala Sitharaman, Union Finance Minister, Government of India and BVR Subrahmanyan, Chief Secretary, Government of Jammu & Kashmir for their consideration for the Budget of Jammu & Kashmir for the year 2021-2022.

In a statement to Ziraat Times, KCCI General Secretary Sheikh Gulzar said that the body has requested the Chief Secretary to take up these issues and suggestion with Union Ministry.

While appreciating the efforts put in by Manoj Sinha, Lt. Governor, J&K for the financial package of Rs. 1350 Cr for the Revival of Business Sector in J&K KCCI said that s package announced by the Government need effective implementation. The KCC&I has urged the government ‘to ensure effective follow-up for the implementation of the package.’

Following are the detailed recommendations submitted by KCCI. Ziraat Times reproduces the same here without any modifications or editing:

BANKING & FINANCE:

The overall losses incurred over the years have resulted in an unprecedented level of stress on the working capital and finances of the local business establishments. Though there have been several interventions by the J&K Government for extending support but major demands has to met by Union Ministry only.

Suggestion:

1. a) For accounts under stress but standard, a 30 % Capital infusion coupled with re- structuring of the accounts needs to be done with repayment schedule of 07-10
2. b) For accounts which are NPA post 2008 and need revival package, it is suggested that deep re-structuring which converts their principle liabilityinto a term loan with similar capital infusion upto 30%. A fairly extendedrepayment schedule of about 10-15 years be made applicable to
3. c) In the case of One Time Settlements (OTS), a standardized OTS Policy needs to be framed in view of the present situation on the ground. It is suggested that a relief of 30% in principal amount (NPA Amount) be extended with 100% waiver in the unapplied The amount so arrivedbe made payable over a period of three years.
4. d) GST reimbursement for the amount paid by the MSME sector is delayed inordinately and needs to be released in the time bound manner as committed by the
5. e) In the case of self-financed business establishments having no bank exposure, It is suggested a suitable capital infusion for such establishments on softer interest rates be made

TOURISM SECTOR:- Travel Agents /Tour Operators:-

Ø Interest Free /Soft Loans for survival & revival of Tourism Industry and waiver off on CC accounts/ consumer loans.

Ø Tourism sector was declared as Industry in 1995 at par with MSME of J&K. concession in Power tariff was allowed to this sector for only one year i,e 2018-19 till 31-03-2019 whereafter this was withdrawn. It is requested to regularize this concession from 01-04-2019 onwards without any interruption. Also the demand charges on electricity may be withdrawn by the PDD in view of zero occupancy of Hotels since August, 2019 when Govt. advisory compelled tourists to leave the valley thereby the entire hotel sector suffered a grinding halt.

Ø Seasonal Kashmir Festival must be conducted to boost Tourism and there must be discount on accommodation, ticketing. Government should finance incentives.

Ø 5% GST on packages for Haj & Umrah are charged in addition to 18% on tickets.5% GST is burden related to activities out side the country and as such should be waived off.

Ø So far MDA provided for Foreign Trips should be allowed for domestic sector as well.

Ø Re-employment/Salary incentive package for Tour & Travel Operators.

Ø Tour operators to be considered as units as defined under the MSME Schemes.

Ø Three-year full GST Waiver.

Tourist Taxi Operators:-

Ø The transport sector has been amongst the worst hit during the current disruption and it requires major interventions like waiver of loans and taxes,

Ø Bank Loan upto Rs. 2.00 lacs be waived off to small time borrowers.

Ø Special Package(Cash / Financial grant/ Relief package) for revival of tourist taxi operators.

Ø Review of parking fee/ rent charges at the designated taxi stands.

Houseboat :-

Ø This sector is facing huge expenditure on account of taxes and rates being charged at higher Commercial tariffs as in Water Charges, Interest in loans, Electricity Charges, staff salary. In the absence of any business especially in the Tourism sector it is suggested that all the taxes and rates payable to the government may be waived off, reduced or deferred as the Committee may deem appropriate.

Ø Due to heavy financial losses the houseboat owners have not been able to repair their houseboats especially of its bottom portion which need repairing from time to time and involves huge amount to keep it floating and due to their inability to do it a number of houseboats have already sunk. Financial support in this regard may be extended in cases where required and also supply of Timber through a special quota from the Forest Department is needed.

Ø Waiver of electricity charges.

Ø Appropriate rehabilitation scheme for house boat owners willing to surrender their licences.

Ø This sector has suffered losses upwards of a hundred crores during these thirteen months of lockdown. The KCC&I urges the Government should come up with comprehensive bailout package for houseboat owners so that they are relieved of their liabilities.

INDUSTRIES SECTOR:-

Ø Local industries supplying to the Government have reportedly a substantial amount of their capital locked up due to inordinate delays in the release of their payments. The KCC&I requests that the mechanism be devised for automatic time bound release of payments by the Government.

Ø Electricity demand and surcharges waive off.

Ø Rental bills of industries employee salary share operational cost from post August.

Ø Price preference for local on Government purchases.

Ø Interest rate reduction on present loans Cold storage losses during lockdown period.

Ø Link Up of local industries with Defense supplies.

Ø Government equity in local business.

HANDICRAFT SECTOR:-

Ø The KCC&I urges for full waiver of the loans taken under the Artisan Credit Card scheme.

Ø Stakeholders of Handicraft sector which are capable of 100% investment without the banking support are in tremendous stress. Though theses manufacturers and exporters play a key role for the betterment of handicraft sector needs an honest attention because their capital are exhausted and diluted due to the post 5^th August 2019 and lockdown period. A special soft scheme with proper moratorium should be initiated so that the chain of handicraft sector should not be disturbed.

Ø Remittance of loans.

Ø There is a long pending demand of declared handicraft industry as MSME Industry.

Ø Virtual Exhibition should be 100% sponsored by J&K Government and in future physical fairs J&K Government should borne stall charges and freight charges also.

Ø Linkage directly to international markets through renowned online marketing platform like Amazon.

Ø All handmade items should be exempted from taxes.

Ø Financial assistance support from Government to upgrade the handicraft sector again.

Ø Revival interventions for Kashmir Handmade Carpets, Shawls, Paper Machie, wood carving and other cottage-based industry focusing on weavers, manufacturers and exporters. Special schemes aimed at revival of all the traditional crafts of Kashmir and starting clusters for Handicraft is a need of hour including a stable supply of raw materials through Raw Material Banks or any other mechanism the Committee may deem appropriate.

Ø It is well known fact that our Export performance over 05 years have deteriorated to worst level. To encourage exports from J&K we need to support at all levels in manufacturing, artisans and weavers.

Ø Revival measures :- Govt. of J&K should earmarked at least 2-3 hundred Crores for buying up excess pilled up inventories over the years due to slow exports so that the artisans and weavers in lakhs get rehabilitated by way of getting working orders,

Ø Due to slow down in the Global Market since 2014 J&K Government should take up this matter vigorously with the Reserve Bank of India so that our Exporters and Manufacturers are relieved as their exports collection are very slow. They should be allowed either to get back their goods so that lot of complains are taken care of.

AGRICULTURTE / HORTICULTURE SECTOR:-

In addition to the interventions sought in this sector elaborated in the Key Points above, the Government of Jammu and Kashmir has laid lot of emphasis on the development of Horticulture Sector. Accordingly lot of Agri-preneurs have shown interest to enter this emerging sector and have undertaken market research to establish the current demands of new root stocks at farm level. The farmers have shown tremendous interest in the new Apple varieties based on M9 Root Stock. The following problems have been identified which are acting as an impediment for the growth in the sector:-

Ø The interest rate charged on our advance by the financial institutions (J&K Bank Ltd) is exorbitantly high which at present almost 13%. It may not be out of place to mention here that the Reserve Bank of India has declared vide their notification No: RBI/2014-15/573 dated 23, 2015 that our industry falls in priority sector (Agriculture) lending which attracts rate of interest little more than the declared Marginal Concessional Lending Rate (MCLR) which at present is 9%. We have been repeatedly requested the J&K Bank to reduce the rate of interest retrospectively as this high rate of interest has become detrimental for the sustainability of this industry.

Ø To flourish and give boost to the Horticulture Sector we have been continuously requested that the government should set up Horticulture parks on the pattern of (at present) the industrial estates growth centres.

Ø The simple transportation of apples to markets had turned into a nightmare due to the frequent closure of the Srinagar Jammu Highway. Whereas our neighbouring state of Himachal Pradesh had procured thousands of crores from the World Bank and the Asian Development Bank for the development of the Horticulture Sector including Apples and Walnuts, we had not been able to properly develop this industry. The Hon’ble Advisor stated that proper linkage and marketing studies needed to be done for ensuring that the Kashmiri products are available at all major markets. In this regard, he suggested that the KCC&I being stakeholders should jointly work with the Horticulture Department so that effective policies and permanent solutions are developed.

Ø Many of our members have already started new enterprise for the development of pre and post Harvest Horticulture Sector. However few of the following suggestions if accepted by the government shall boost the private investment in this sector which are:-

Ø The infrastructure of Post Quarantine available with the government should be extended to the intending private Agripreneurs so that the biggest impediment of PQE is taken care of and then we can say with certainty that this sector shall be the largest contributor for doubling of farmers income by 2020.

Ø The toll tax and GST on import of all Agriculture based equipment like, Plant & Machinery of CA Store, Trellis System, gable wire and all accessories required to establish high density apple orchards based on M9 root stock, should be exempted as all these activities fall under the Agriculture Sector. The services provided by the Cold Storages are already exempted in GST regime as such the Plant & Machinery used for the establishment of new Cold Storages should also be exempted from any tax.

Ø Transportation of Horticulture produce to various Mandis across the Country has been considerable hit by frequent road blocks and one way traffic it is strongly suggested that the fruit laden tracks should not be stooped on any day.

FLORICULTURE:-

This is nascent industry in Kashmir which can be developed to International level provided infrastructure is provided and created.

The Kashmir Chamber of Commerce & Industry long back gave a proposal to APEDA which was supported by the then Government to create Flower Centre on the pattern of Dubai Flower Centre.

Ø Follow up :- The representative of the Kashmir Chamber of Commerce & Industry had a meeting with the Secretary Floriculture and suggested the following:-

Ø Extending 50% subsidy by Integrated various subsidies already available in this sector from Govt. of India and further proposed support to be created by the State Government for at least 10 projects of the size of 10 crore rupees each with maximum subsidy of 5 Crores.

GENERAL TRADE:-

Ø Non-levy of penalty where the assesses has made a bonafide mistake in return and has paid taxes correctly.

Ø Enhancement of scope / extension of timeline for payment of arrears of unresolved issues under Govt. Order No: 64-FD of 2020 Dated 26^th Feb. 2020 for one year.

Ø We are lacking in warehouse facility Government should facilitate providing of land at out skirts of the city as suggested by the KCC&I by-pass side.

Ø Reduction/Waiver of demand charges for electricity and water.

LOC TRADE:-

Ø Due to the suspension of LOC Trade the traders will be forced to leave the trade which will lead to unemployment of 30 to 35 thousands of people whether they are traders, labourers, Truck Drivers and other people connected with the LOC Trade.

Ø After suspension trade has suffered and the Traders owe to the Bank and to the market which still as on date are unsettled. We want way out to this problem.

Ø Accounts have turned NPA’s without default of any trader because he has been victim of circumstances. They are not in position to pay the school fee of their children’s. Comprehensive revival package is much need for the people who are associated with trade.

EDUCATION SECTOR:-

Ø One Time registration.

Ø There should be an Education cluster for Professional College and Degree College like industry so that the stake holders get land on subsidized rates.

Ø A Special Education Program for Elementary School Teaches has been demanded by the local stakeholders in view of Elementary School being the foundation of schooling.

YOUNG ENTREPRENEURS:-

Ø CGTMSME scheme is not on ground and the scheme is not followed by any Financial Institution

Ø There is a Scheme that up to Rs. 25 Lakh no mortgage is required but Bank has not followed that they are still asking for mortgage. Financial package announced by the government there is MSME scheme that upto Rs. 1Crore no mortgage is required but this scheme is also not followed by the financial institution.

Ø Rs. 300 Crore fund is with Development Financial Corporation (DFC) but the negative response of the department no one avail that funds.

Ø The schemes of Khadi Village Industrial Board (KVIB) is only for rural areas. It should be also for urban area. The slab of the schemes is 25 lakh it should be raised up to Rs1 crore.

Ø There are so many formalities so we request for single window clearance.

Ø Most of the young entrepreneurs want to do retail , service , online business for that we request Government that the shopping malls Like SDA Auqaf Markets or any other market places should be given to youth on priority on rental basis.

POWER SECTOR:-

Issues faced by Hydro Power Sector in J&K.

Ø Water Usage Charges. Water usage charges are being levied only in the state of J&K and in no other state in the rest of India.

This charge is only applicable on 2011 policy and not in the latest proposed policy of 2020 and not in the initial 2003 policy, making projects under 2011 policy unviable and at an disadvantage. It is requested to kindly quash the charges completely in the interest of the sector.

Ø Renewable Power Obligation:- No Independent Power Producer is selling their energy to KPDCL/JPDCL while the Govt. Power Deptt is always at shortage of electricity. While the Deptt. has an obligation to buy atleast 10% of their energy though Renewable sources. CERC/SERC as per their order in 2016 has directed the JK Power Deptt. to create a separate corpus fund for buying of Renewable power from IPP’s.

It is requested to kindly create a Corpus fund of 200 Crores by JK Power Department and execute strong Power Purchase Agreements with IPP’s with guarantee of payments.

Ø GST :- The GST rate for Solar panels and wind turbines has been fixed at 5% while as the GST levied upon small hydel projects civil works and plant and machinery is 18% or more, thereby rendering our projects unviable in comparison with other renewable sources.

It is requested that the GST rates may kindly be reduced to 5% with the concurrence of GST Council.

INFORMATION TECHNOLOGY AND SERVICE SECTOR :-

Ø Several start-ups have had to close their business and have had to relocate. The recurring expenses have been piling up and the cost overrun have become unbearable to sustain. The investments done in product development stands totally wasted.

Ø The unavailability of internet facilities have made things very difficult for the service sector. Professionals like CA’s, Architects, Lawyers and Engineers have had very little business to cater to. It is urged that financial support in the shape of soft loans and engagements be extended to this sector.

HEALTH AND PHARMA :-

Ø On the request of the KCC&I, the constitution of the Pharma Council was announced but so far no order in this regard has been issued. The sector also requests for a state level Nursing Council.

Ø Due to the lockdown, only particular essential medicines have been selling whereas a large number of products have been stuck on the shelves resulting in losses due to expiries.

Ø Consideration of the retailing sector as units in the MSME sector is also requested to be considered.