*Industries Deptt pins hope on Budget Session for Corpus Fund
Mohinder Verma
JAMMU, May 3: In a testimony of continuous dilly-dallying approach on the vital issues, the Finance Department has failed to constitute Asset Reconstruction Company (ARC) for the revival of the sick industrial units in Jammu and Kashmir despite the fact that announcement in this regard was made by none else than the Finance Minister over one year back. Due to this, the Industries Department has been left with no other option but to pin hope on the forthcoming Budget Session for release of funds for the purpose.
Minister for Finance, Dr Haseeb Drabu, while presenting Budget in the Legislative Assembly on March 22, 2015 had announced setting up of an Asset Reconstruction Company in partnership with the Jammu and Kashmir Bank. It was stated in the Budget speech that Asset Reconstruction Company will deal with stressed assets, do asset stripping where need be and formulate a revival package where it feels that the revival is possible.
However, there was no follow up on the announcement and Industries Department continued to wait for establishment of Asset Reconstruction Company for revival of sick industrial units, whose number is between 150 and 200 in Jammu and Kashmir.
On September 17, 2015, the Finance Minister, Dr Haseeb Drabu, while chairing 55th Annual General meeting of shareholders of Jammu and Kashmir State Financial Corporation, stressed that the Corporation should be turned into Asset Reconstruction Company. Again there was no exercise to give practical shape to the announcement with regard to creation of Asset Reconstruction Company.
Even in the Industrial Policy-2016, which was approved by the State Administrative Council headed by Governor N N Vohra early this year, enough thrust has been laid on Asset Reconstruction Company.
“As per the announcement in 2015-16 budget speech of the Finance Minister for sick units, an Asset Reconstruction Company in partnership with J&K Bank will be set up and till ARC is established, the State Government will provide a Corpus Fund with an initial contribution of Rs 15 crore to the Industries and Commerce Department to help the revival of sick industries in the State. The Corpus will be used to disburse recoverable soft loan as per the recommendations of State Level Revival Committee”, reads the Industrial Policy-2016, which has already become operational.
However, the Asset Reconstruction Company has not been constituted till date by the Finance Department, official sources told EXCELSIOR, adding “in this way the Finance Department has not honored the announcement made by none else than the Finance Minister in the Budget speech”.
“Due to inordinate delay in setting up of ARC not much headway has been made on the issue of rehabilitation of sick industrial units”, they said, adding “had the company been established soon after the Budget announcement, steps could have been initiated for revival of large number of sick units till date”.
It is pertinent to mention here that ARC with a corpus of Rs 15 crore is imperative as the component of interest subvention was not incorporated in the soft loan scheme.
Now, the Industries and Commerce Department is pinning hope on the forthcoming Budget Session for 2016-17 financial year beginning this month in Srinagar for provision of Rs 15 crore Corpus Fund, sources said, adding “the way the issue of creation of Asset Reconstruction Company has been handled during the past over one year, it seems that issues of vital importance are being handled with slackness otherwise one year is not a small period to float a company”.
“This issue should be an eye opener for the Government as success of new Industrial Policy would depend upon proper coordination between several departments”, sources said, adding “if the concerned departments fail to synchronize with each other there would not be any major impact of the policy in giving required fillip to the industrialization in Jammu and Kashmir”.
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