Loans, Losses, Liabilities: Inside Lassipora’s Distressed Complex

Lassipora Industrial Estate

‘We’ve been crippled and virtually rendered as beggars, as even the most generous estimates put the Lassipora Industrial Estate’s losses at around fifty thousand crores since 2019.’

By Aaqid Andrabi

AMONG the 587 business-units in Lassipora Industrial Estate — one of the largest industrial complexes in North India — sits a spacious but mirthless manufacturing unit of Abid Shah.

Overlooking his now-defunct plant, Abid looks morose and lets out a heavy sigh. A visible air of desolate-resignation drapes his sunken, dejected shoulders.

After founding his plant in 2015, Abid would manufacture school supplies, and was doing a decent business. But then came the fateful year of 2016 when Hizb commander Burhan Wani’s killing brought everything to a screeching halt in Kashmir. The ruinous ripples hadn’t passed on yet, and along came 2019. And whatever remnants of a business were remaining, the Covid pandemic and the ensuing lockdown nailed the coffin shut for Abid’s business.

Akin to his nonoperational enterprise, there’re scores of tales of financial woes and annihilating lockdown that Kashmiri industrialists have dealt with for the past three years.

The post-abrogation narrative of Article 370 of the Indian constitution was that it would be a harbinger of development of colossal scales for the antiquated state of Jammu and Kashmir.

The ground situation, however, depicts a starkly contrary state of affairs.

Since 2019, the former state faced continuous curbs amassing a colossal financial debt on the doorsteps of the industrialists. To enable them to deal with the incurred losses and liabilities, the industrialists were given a moratorium on the payment of interest on their loans for eighteen months. That had its caveats, though. The postponement ended up being another burden on the businesses since they had to make extra payments for the deferred interest amounts.

“I had acquired a loan of some Rs 40 lakh from a bank on high-interest rates with the hope that I would be able to feed and fend my family, at the same time providing means of employment to a few other people,” says Abid.

“But now, it feels like I may have to sell off whatever property I own to pay back some part of my loan.”

Representational Photo for a distressed unit-holder.

Amid this anguish, the Minister of State for Communication, Devusinh Chauhan recently arrived in Pulwama to inaugurate multiple projects. He emphasized the need for redressal of grievances and issues of people on a priority basis, while describing Pulwama “as the growth engine of Jammu and Kashmir”.

However, unit-holders of Pulwama’s Lassipora Industrial Estate are sulking. They say their desperate pleas have been falling on deaf ears, with both Delhi and Srinagar office-bearers seemingly appearing “unsympathetic” towards the local industry.

This collective complaint doesn’t appear erroneous as estimates suggest that J&K suffers losses to the tune of Rs 297 crores daily.

“Even the most generous estimates put the industrial complex’s losses at around fifty thousand crores since 2019,” says Sarwar Malik, Financial Secretary to the Industries Association, Lassipora, and a plant owner.

“These are just estimates,” he adds, “but the losses incurred could be much higher than that. We’ve been crippled and virtually rendered as beggars.”

Apart from staff salaries, Sarwar says, the unit-holders have had to pay for tons of other liabilities since the 2019 crippling summer when the trade activities nosedived in the valley.

“While our businesses have badly suffered in last three years,” the financial secretary continues, “the dues towards the government and our suppliers have to be paid, no matter what.”

Dealing with the same stark financial abyss now, Sheikh Amjad, another distressed unit-holder in Lassipora says he had started his PVC tube manufacturing plant in 2017 with great hopes. With a family of eight to fend for, he had mortgaged his ancestral property and acquired a couple of loans for establishing his plant.

But now, he’s barely able to make ends meet.

Determined to provide his two kids with the best kind of education that he couldn’t have, he had enrolled them in one of the prestigious schools of the valley. But come 2019, and the entire situation in the former state took a turn, for the worse, and so did Amjad’s fortunes.

Amid reminiscent sobs, Amjad says, “The situation got so appalling for me and my family that I had to pull my kids out of their school and get them admitted to one in our locality.”

The whole point of the abrogation of Article 370 was to lead the valley towards unprecedented development, he says: “But we know what’s happening on the ground. Where’re we supposed to go now? Who’re we supposed to call on now to get us out of this misery and misfortune that has been forcefully brought upon us?”

After losing its semiautonomous status, J&K economy has come down to minus 8 per cent, Amjad says: “Lassipora industrial area also suffers from that loss. After 2019, as many as 90 per cent of the establishments here have been under stress, and as many as 30 per cent of those had to shut shop because of high liabilities and their inability to cope with them.”

The business unit in Lassipora

The rules and laws of declaring recession state that if an economy has had a negative growth rate for two consecutive years, it’s to be declared in a state of recession, Amjad argues.

“J&K has had negative growth for more than two years now, but nobody bats an eye,” he wonders. “It will take us more than five years to recover from the losses incurred during the consecutive lockdowns if the situation remains feasible enough to operate our plants and businesses.”

The Federation Chamber of Industries Kashmir (FCIK) has been trying to get a bailout package for the industries sector in J&K, but so far, Amjad says, “we are yet to see anything concrete happening on the part of the central and regional government. We have a higher rate of unemployment here in J&K as compared to other states and union territories of the country. The ease of doing business is even worse.”

As the rate of unemployment has surpassed the national average by several notches in the erstwhile state, Abid Shah, the unit-holder in Lassipora, fears for his and his family’s future.

“Our future is being undone and unravelled right in front of us,” he laments. “We’ve become the wretched and helpless bystanders — the onlookers to our destruction.”

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