NCSS Rollout Under Scrutiny: FCIK Flags Skewed Growth, Seeks Policy Reset | Kashmir Life

SRINAGAR: The Federation of Chambers of Industries Kashmir (FCIK) has raised serious concerns over what it described as deep imbalances in the implementation of the New Central Sector Scheme (NCSS), 2021, calling for urgent corrective measures to ensure equitable industrial growth across Jammu and Kashmir.

The concerns were flagged during a stakeholders’ workshop organised by the Directorate of Industries and Commerce, attended by senior officials from the Department for Promotion of Industry and Internal Trade (DPIIT). The session was chaired by DPIIT Director Rajesh Pawar and moderated by Director Industries and Commerce Khalid Majid. The FCIK delegation presented what it termed a candid assessment of the challenges being faced by local enterprises.

The Federation said the benefits of the scheme appear to be concentrated in a few districts, largely mirroring the pattern observed under the 2002 industrial package. It warned that such concentration undermines the objective of balanced regional development, leaving several districts outside the ambit of industrial growth.

Highlighting disparities in allocation, FCIK stated that out of the total Rs 28,400 crore outlay, nearly Rs 20,000 crore is expected to be availed by just 18 large units. It said the concentration of incentives among a limited number of beneficiaries raises concerns about equity and inclusiveness in the scheme’s design and implementation.

The Federation also expressed concern over the exclusion of existing industrial units from meaningful support under the scheme. It said these units, which have operated under challenging conditions for decades, are now facing increased vulnerability due to lack of policy backing for revival and expansion.

FCIK urged DPIIT to incorporate corrective provisions in the next phase or extension of NCSS, including equitable distribution of incentives across all districts. It also called for the creation of a dedicated window for existing units focusing on revival, rehabilitation and capacity expansion.

As part of its recommendations, the Federation proposed a bridge funding mechanism ranging between Rs 5,000 crore and Rs 10,000 crore to support existing units. It said such an intervention could help unlock idle capacity and generate employment for up to five lakh people.

The Federation further pointed to administrative delays and procedural bottlenecks affecting even the limited number of units registered under the scheme. It noted that GST-linked incentives for the initial three years, which were to be disbursed automatically in the fourth year, remain pending despite compliance.

It also flagged issues in the scheme’s implementation framework, stating that units are being required to submit extensive hard copies of documents despite provisions for online processing. This, it said, defeats the purpose of digitisation and adds to the compliance burden.

FCIK raised concerns about entrepreneurs who applied within the stipulated timelines and made substantial investments but were excluded on procedural or technical grounds. It urged authorities to consider such cases under a separate category and accommodate them through savings within the scheme.

Sector-specific anomalies were also highlighted. In mini hydel projects, key components such as penstocks are reportedly excluded from the definition of plant and machinery, affecting eligibility for incentives. Similarly, civil works—constituting a significant portion of project costs, are not being considered, unlike in sectors such as hospitality.

The Federation also flagged issues related to imported machinery, where incentives are limited to ex-factory costs, excluding customs duty, freight and other associated expenses. It termed the approach impractical, noting that actual investment reflects the full landed cost.

FCIK said the widening gap between policy intent and ground-level execution is a matter of concern, adding that while the scheme is ambitious in design, its implementation has been constrained by procedural rigidity and restrictive interpretation.