Ziraat Times News Desk
SRINAGAR — The Federation of Chambers of Industries Kashmir (FCIK) has issued a stark warning regarding the survival of local small businesses, calling on Chief Minister Omar Abdullah to address a mounting financial crisis. The apex industrial body is seeking a one-time budgetary provision in the upcoming state budget to liquidate massive payment backlogs that have left local Micro, Small, and Medium Enterprises (MSMEs) “suffocating” for years.
A financial stranglehold
According to a statement released by the FCIK, hundreds of local units in Jammu and Kashmir are on the verge of collapse. The chamber alleges that government departments, Public Sector Undertakings (PSUs), and intermediary agencies have withheld payments for work already completed and supplies delivered, often citing administrative excuses.
The delay has had a domino effect on the local economy:
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Asset Degradation: Healthy business units are being pushed into Non-Performing Asset (NPA) status.
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Legal Pressure: While the government defaults on payments, banks are reportedly initiating coercive recovery actions against these MSMEs under the SARFAESI Act.
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Loss of Credibility: Entrepreneurs face a breakdown in trust with their own suppliers and lenders due to the lack of liquidity.
Allegations of “unequal treatment”
The FCIK highlighted what it describes as “discriminatory contracting practices.” The chamber pointed out a sharp contrast between how local and outside agencies are treated:
Feature |
Outside Agencies (Composite Contracts) |
Local MSMEs |
Advance Payment |
Up to 25% upfront |
0% (Work entirely on credit) |
Delivery Payment |
50% upon delivery |
Frequently withheld |
Payment Terms |
Favorable and structured |
Systematic delays/backlogs |
“This unequal treatment has systematically weakened local industry and handed an unfair advantage to outside players at the expense of Jammu and Kashmir’s own enterprises,” the FCIK remarked.
Projects in limbo
The chamber further noted that payments are being blocked under the pretext of ongoing investigations or the winding up of certain PSUs. Specific mention was made of works executed under the SAUBHAGYA scheme, Jal Jeevan Mission, and projects for the J&K Projects Construction Corporation (JKPCC).
The FCIK questioned why “innocent MSMEs” should be penalized for internal administrative decisions or investigations in which they played no part.
The road ahead
The industrial body believes the forthcoming Budget presents a “unique opportunity” to reset the economic landscape. Beyond the immediate injection of funds to clear the backlog, the FCIK has proposed:
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A One-Time Budgetary Provision: To immediately settle all long-pending dues.
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Automatic Payment Mechanisms: Implementing a non-discretionary system to ensure future payments are made on time.
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Accountability: Shifting the burden of administrative shortcomings away from the contractors and onto the officials responsible for issuing orders without secured funding.
