To promote entrepreneurship and industry in the state, Jammu and Kashmir Finance Minister Haseed Drabu today proposed setting up of new industrial estates and announced a startup fund as well as joint-venture opportunities with the government for the IT companies.
“The industrial estates in the state will be reorganized to function as a corporate entity within the aegis of State Industrial Development Corporation (SIDCO)/SICOP.
“The idea is to make each one of them a profit centre. These estates shall become Special Purpose Vehicles of the corporations or operating companies be it SIDCO or SICOP,” Drabu said in his budget speech here.
“Industrial associations of the State will be encouraged to develop, on their own or in partnership, private industrial estates/parks on commercial lines,” he said.
He, however, said it would be difficult to formulate a long-term Industrial Policy in Jammu and Kashmir as of now as more clarity was needed on the implementation of GST and its applicability to the state.
“However, prior to the formation of the new government, an industrial policy for the State has been notified. This will require substantive changes once the GST regime is implemented. For the moment, few changes are required,” Drabu said.
Drabu said there was considerable uncertainty about the Industrial Policy in all states that offer tax exemptions and other fiscal incentives to industry, in view of the uncertainty about finalization of the GST.
“Jammu and Kashmir is a little more complicated case as we have to carve out our space within the national tax regime while protecting our unique privilege of the right to tax services,” he said.
The Finance Minister said the government will go all out to attract investments in industrial estates or elsewhere in the state by providing an enabling environment and incentives.
At the same time, it will also ensure that these are governed by and are in compliance of existing administrative practices, regulatory norms and the Constitution of Jammu and Kashmir, he added.
“In essence, the estates will effectively be corporatised and each estate will have an estates manager who will be the CEO of the industrial estate. All the unit holders within the estate will form its management committee.
“Each industrial estate will then have an income and expenditure statement and a balance sheet which will be audited annually,” he said.
Drabu said one-third of the earnings of the industrial estate by way of rents and other earnings shall be mandatorily deployed for the upkeep, maintenance and up gradation of the assets and infrastructure of the estates.
He said Information Technology is an important sunrise industry in the state.
To facilitate growth of this sector and to help the local IT companies reach certain economy of scale, the government will offer joint-venture opportunity to the states top-ten IT companies in terms of audited topline.
“The state government will invest through J&K E-Governance Agency (JAKEGA) or an SPV created for this purpose. The proposed initiative shall also help speed up e-governance projects in the State.
“For capitalization of the JV, I have earmarked Rs 10 crore,” he said.
He further said the states new breed of young entrepreneurs needs support to grow.
“Instead of giving them subsidies, I propose to set up business incubators for sunrise industries in the capital cities of Srinagar and Jammu
The business incubators will provide finances, branding, and marketing support to the entrepreneurs. To begin with, I propose a start-up fund of Rs 5 crore,” he added.
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