700 MSMEs shut shop in J&K in 4 years

Srinagar, Dec 4: In a significant blow to Jammu and Kashmir’s industrial landscape, over 700 Micro, Small, and Medium Enterprises (MSMEs) have shut down operations in the past four years.

According to a written reply by Union Minister of Commerce and Industry Piyush Goyal in the Lok Sabha, 701 industrial units, including 697 micro and four small-scale enterprises, ceased operations in the region between July 1, 2020, and November 15, 2024.

The closures in J&K are part of a larger nationwide trend, with 61,469 industrial units, including 60,909 micro, 507 small, and 53 medium-scale enterprises, closing during the same period.

The industrial sector in Kashmir is urging the government to revamp the existing industrial setup in the Valley, emphasising the need for a balanced approach to development.

While the push to attract new investors is a welcome move, industrialists argue that equal attention be paid to supporting and sustaining existing units.

According to industrialists, the closure of over 700 MSMEs highlights the mounting pressure on the local business community, with many struggling to repay debts, leading to the auctioning of industrial estates.

The government in its reply emphasised that industrial development remains primarily under the jurisdiction of State governments.

However, several central and state-level initiatives aim to address challenges and foster growth in the sector.

Key programmes include the ‘Make in India’ initiative, Production-Linked Incentive (PLI) schemes, and the National Industrial Corridor Programme, complemented by measures to enhance Ease of Doing Business (EoDB) and reduce compliance burdens.

To support MSMEs, the government has introduced various financial assistance programmes.

These include collateral-free loans of up to Rs 5 crore with up to 85 percent guarantee coverage, margin money subsidies under the Prime Minister’s Employment Generation Programme (PMEGP), and special benefits for women and other vulnerable groups.

The Emergency Credit Line Guarantee Scheme (ECLGS), launched during the COVID-19 pandemic under the Aatmanirbhar Bharat Abhiyaan, provided much-needed financial relief to MSMEs, enabling them to manage operational liabilities.

Though the scheme ended on March 31, 2023, it played a crucial role in preventing further closures during the pandemic-induced economic slowdown.