Optimistic about policy shift to support local enterprises and economic growth: FCIK

9 November 2024

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Srinagar: The Federation of Chambers of Industries of Kashmir (FCIK) has expressed optimism that the newly formed government in Jammu and Kashmir will take decisive steps to create a more inclusive and equitable economic landscape. The Federation is hopeful that the government will reverse the trend of awarding the majority of development contracts to non-local entities, a practice which has marginalized local businesses and limited economic growth within the region.

In a series of high-level meetings with top government officials, FCIK’s leadership brought these issues directly to the attention of Chief Minister Omar Abdullah, Deputy Chief Minister Surinder Kumar Choudhary, Advisor Nasir Aslam Sogami, and Chief Secretary Atal Duloo. During these discussions, FCIK received firm assurances that the government is committed to urgently reviewing and revising the current policies that have sidelined local enterprises for far too long.

FCIK conveyed that the government contracts for large-scale infrastructure projects in Jammu and Kashmir have largely been awarded to non-local enterprises and contractors, primarily due to qualification requirements and manipulated scaling-up of the volume of projects.

While arguing that these criteria have unfairly disadvantaged local businesses, FCIK assured that local MSMEs are otherwise well-equipped and capable of managing projects of varying complexity at the regional level.

“Over the years, the exclusionary policies have stifled the potential of our local businesses and harmed the region’s economic fabric. Increasing project volumes and raising qualification thresholds have pushed local enterprises out of the competitive process, resulting in lost opportunities for our youth and undermining our local economy,” conveyed Shahid Kamili, President of FCIK.

Building on the government’s acknowledgment of the challenges faced by local enterprises and the assurances received, Kamili expressed strong confidence that the new administration represents a real opportunity for a much-needed policy shift. He believes this shift could empower local businesses, ensuring that the benefits of development projects stay within the region, generate new jobs, and promote long-term economic self-sufficiency for Jammu and Kashmir.

“We are hopeful that this government will prioritize policies that enable local enterprises to thrive, which will not only contribute to the region’s economic growth but also support the livelihoods of local workers,” Kamili added.

To illustrate their concerns, FCIK highlighted issues with the Revamped Distribution Sector Scheme (RDSS), a key initiative launched by the Government of India to overhaul the power sector. Under the RDSS, 13 project packages for the installation of 7,000 distribution transformers and 1.5 lakh steel tubular poles in the Kashmir Valley have been, or are in the process of being, awarded to non-local contractors by KPDCL.

FCIK has formally raised this matter with Chief Minister Omar Abdullah, Deputy Chief Minister Surinder Kumar Choudhary, and other senior officials, urging that these specific contract components be reserved for local manufacturers in Kashmir, with a similar provision for Jammu’s manufacturers under the portion of scheme meant for Jammu province.

FCIK’s call for a policy revision is aimed at ensuring that local businesses have a fair opportunity to participate in developmental projects, keeping the economic benefits within the region and empowering the local workforce. The Federation believes that the new government has the opportunity to create a more sustainable and inclusive economic ecosystem for Jammu and Kashmir, one that prioritizes local entrepreneurship, employment, and long-term growth.

The Federation is awaiting a response from the government and remains hopeful that the new leadership will take swift action to bring about the necessary policy changes.