KEEMA expresses concern over closure of 700 MSMEs in 4 years in J&K

Srinagar, Dec 7: Kashmir Electrical Equipment Manufacturers Association (KEEMA) has raised alarm over the deteriorating state of Micro, Small, and Medium Enterprises (MSMEs) in Jammu and Kashmir, warning of an industrial crisis of unprecedented scale.

As per the statement, official figures presented in the Lok Sabha by Union Minister Piyush Goyal reported the closure of 701 MSMEs in the past four years. However, KEEMA asserts that the actual numbers are far higher, with many local units silently shutting down due to unsustainable conditions.

“The official data only scratches the surface,” said KEEMA Secretary General Waseem Ahmed Khateeb. “A much larger number of MSMEs have collapsed under the weight of adverse policies and poor enforcement of critical industry.

The steady decline of MSMEs is attributed to significant policy changes since the region’s status was altered, dismantling decades-old measures designed to uplift local industries. Kashmir’s unique challenges as a landlocked region with restricted market access meant that government procurement policies and local market support were lifelines for its industries.

The MSME Act, which mandates 25% procurement of reserved items from small enterprises, has been blatantly ignored. Critical policies such as local procurement through state-based central stores have been abandoned, replaced by large-scale turnkey contracts that exclude local MSMEs.

A glaring example of this disregard is the Rs 5,800-crore Revamped Distribution Sector Scheme (RDSS) current being implemented in Jammu and Kashmir. Despite 90% of required materials—such as steel tubular poles, aluminum conductor wires, and electrical hardware—being part of the 358 items reserved for MSMEs, these are now being sourced through turnkey contracts awarded to external firms. This has stripped local manufacturers of vital opportunities, forcing widespread closures and job losses.

“Local industries are being systematically sidelined,” said Raja Nayeem Ahmed Khan, President of KEEMA. “We have repeatedly highlighted these violations to the authorities at both Union and UT levels. We urge the government to honor the MSME Act and Make in India initiatives by reinstating local procurement mechanisms and halting turnkey contracts that exclude local MSMEs.”

KEEMA demands immediate intervention and enforcement of MSME Act and strict adherence to the procurement policy of reserved items exclusively from local MSMEs.

Reinstate Supportive Policies and Return to state-based procurement systems to help local manufacturers compete.

The authorities should forthwith stop awarding turnkey contracts that marginalize local enterprises in key projects like RDSS.

The survival of MSMEs is critical for the economic stability of Jammu and Kashmir,” said Khan. “Ignoring their plight will result in unemployment, and economic stagnation.