Rajan Gandhi
The Industrial Revolution, which began in 18th-century Britain, transformed societies worldwide, fundamentally altering the modes of production and economic structures. In India, this transformation occurred much later, and Jammu and Kashmir, owing to its unique geographical and political circumstances, experienced industrialisation differently from the rest of the country.
The Jammu region, historically known for its handicrafts, cottage industries, and agriculture, remained largely untouched by industrial advancements until India’s independence in 1947. The princely state of J&K, including the Jammu Division, primarily relied on traditional crafts like Pashmina shawl making, wood carving, and other handicrafts. These industries employed a significant portion of the population, catering mainly to the local market with some export of luxury items.
After independence, J&K experienced political turmoil, which hindered large-scale industrial growth. The state’s geographical isolation, limited connectivity, and socio-political issues also made it less conducive to heavy industries. However, the Central Government recognised J&K’s strategic importance and provided incentives for economic development. Starting in the 1960s and 1970s, several public sector initiatives began to improve infrastructure, leading to the initial phases of industrial development in the Jammu Division. With concerted efforts from the central and state Governments, Jammu Division witnessed industrial growth in the latter half of the 20th century. A key factor driving this growth was the establishment of industrial estates and zones. The Diagana and the Bari Brahmana Industrial Estate, inaugurated in the 60s and 70s near Jammu City, played a pivotal role in establishing Jammu as a hub for small to medium-scale industries.
The initial industries were mostly agro-based, as agriculture was the backbone of the economy in Jammu Division. Food processing units, flour mills, rice mills, and dairy processing plants were set up, which added value to local produce and generated employment. Subsequently, other manufacturing units, including textiles, cement, steel, and pharmaceuticals, were also established. Additionally, as industries expanded, ancillary services like transportation, warehousing, and retail saw growth, further increasing employment prospects. Jammu Division’s industrial growth has been spurred by Government incentives like tax exemptions and subsidies. In the last few years, the UT administration of Jammu and Kashmir, under the guidance of the Central Government, introduced a series of industrial policies that provided incentives for investors and entrepreneurs. These policies are focused on promoting small and medium enterprises to generate employment and improve local manufacturing capabilities. The industrialisation of the Jammu Division in Jammu & Kashmir has now entered a significant phase, bolstered by enhanced infrastructure, strategic connectivity, and transformative policy support. Certain districts within the Jammu Division, especially those in plains like Kathua, Jammu and Samba, enjoy the added logistical advantage of proximity to Punjab and well-developed links with the rest of the country.
Historically, several large-scale industries emerged in the Kashmir Division before the onset of terrorism, but the situation has since changed markedly. In a competitive market where even minor cost savings are crucial, logistics and transportation costs contribute immensely to industrial efficiency.
Following the abrogation of Article 370 and the reconstitution of J&K as two union territories, there has been renewed focus on transforming J&K into an industrial powerhouse. The Central Government, led by Prime Minister Modi of the BJP, has provided extensive industrial benefits under the New Industrial Policy 2021-30, including subsidies, tax reliefs, and a range of incentives designed to attract substantial investment. Implemented from 2021, the New Central Sector Scheme (NCSS) for Industrial Development in J&K targets investment growth and service-led economic development through a comprehensive package that includes a capital investment incentive (CII), a capital interest subsidy (CIS), a goods and services tax-linked incentive (GSTLI), and a working capital interest subsidy (WCIS). This policy has laid the foundation for unprecedented industrial growth, with the UT receiving around seven thousand investment proposals totalling over one lakh crore since the revocation of Article 370, projected to generate over 4.61 lakh job opportunities if established. The initial 28,400 crore allocation by the Central Government has already been aligned as incentives, mainly in Jammu Division and the UT Government of J&K has sought additional funding to sustain this momentum, citing the complete booking of the Rs 28,400 crore allocated under NCSS to stimulate industrial growth. The significant impact of these policies is that it has created a national level industrial buzz, as J&K’s incentivisation model is unique and unmatchable in the entire country.
However, a sudden spurt in investment proposals has its own set of problems. With robust investment offers in the pipeline, land availability has emerged as a pressing challenge, with no quick resolution immediately. This prolonged bottleneck has led to the consideration of privately owned land for industrial use. To address this, the Jammu & Kashmir Private Industrial Estate Development Policy (2021-30) is set to be released, aiming to establish new industrial estates on private land. The policy seeks to develop approximately 2,000 kanals of land annually through private estates, with guidelines being fine-tuned to meet the rising demand for industrial land. Currently, investors are seeking over 62,000 kanals across J&K, with more than 34,000 kanals requested in the Jammu Division alone. Of these, the Industries Department aims to secure between 6,000 and 8,000 kanals, primarily in Kathua, Ghagwal, Samba, and Jammu. There is a proposal by Directorate of Industries Jammu to acquire 5000 kanals of land pool near Panjgrain in Jammu subject to clearance from Forests department. Even Jammu’s revised Master Plan 2032 proposes to rejig the existing industrial estate and create Special Investment Zones or Special Economic Zones. It envisages new industrial areas in Badwal near Vijaypur in Planning Zone Vijaypur and Sarore in Planning Zone Bishnah. But even these proposed sites cannot fulfil land pool demand. The Government must work up with the Revenue and Forest departments to create more industrial land pools at the earliest.
The Directorate of Industries Jammu has made commendable efforts in facilitating new industrial establishments, enabling the production of world-class products within the region, some of which are even exported. The services and hospitality sectors, too, have gained significant amplification under the new industrial policy. Despite notable progress, sustaining this growth requires additional Central funding to support the establishment of critical megaprojects that are currently pending financial approval. Notable among the withheld projects is Muttiah Muralitharan’s Ceylon Beverages, which got allocated 206 kanals for a Rs 1,600 crore aluminium can manufacturing and beverage filling unit in Kathua. While industrialisation in Jammu is still in its early stages compared to established industrial states like Himachal Pradesh, Haryana, and Maharashtra, the groundwork laid so far is promising. It is critical to keep things moving with the same consistency and pace to achieve the set target of Jammu’s industrialisation in the true sense.
Additional persistent challenges, however, continue to hinder progress. For instance, local employment levels in set industries are a major contentious issue. Local employment is low due to a mismatch in technical skills; the region’s educational system does not adequately align with the needs of modern industries, where automation is on the rise and specialised machine operation skills are essential. Vocational skills in trades like plumbing and electrical fitting, once valuable, now lack the modern relevance needed to support industrial growth. Despite repeated appeals from the Industries Department, no concrete steps have been taken to bridge this skill gap. As Supreme Court rulings prevent mandating local employment quotas, skill development within J&K is even more crucial. Some upcoming industries have proposed to establish skill development centres alongside their industrial units, an offer that warrants serious consideration by the Government.
Land availability remains another critical issue, impacting even healthcare-focused projects like Medi-city, where legal complications have delayed the hospital project designated at the Dilli site. These large-scale hospital projects are vital for improving health services in the region, all disputes related to land must be resolved promptly to avoid further delays. As per plans in public domain only 100 kanals of land has been marked at Miran Sahib Jammu for Medi-city project against a 387 kanals allocated at Sempur for Kashmir Medi-city project. Government has to look into this shortfall keeping in view the population, terrain of Jammu division and additional healthcare rush with lots of pressure on health infra specifically in winters due to winter migrants from Kashmir and Leh.
Power availability is another pressing concern. New industrial estates like Ghatti currently receive roughly 30 MW out of a projected 350 MW requirement. Industrial land allotments are subject to the condition that plants must become operational within three years, making it imperative for the Power Development Department to expedite power infrastructure projects, which are themselves time-consuming in terms of design, sanctioning, financing, and implementation. The Power Department has to understand the gravity of the situation and the importance of their contribution to Jammu’s industrialisation. Simultaneously Government must develop residential colonies adjoining these industrial areas otherwise unauthorised slums and colonies will come up.
To safeguard environmental sustainability, the Industries Department has restricted the types of industries allowed in Jammu Division, limiting sectors like pesticides and chemicals to only those meeting stringent conditions. In addition, defunct industrial units in old industrial areas like Bari Brahamana can now transfer ownership, provided the new owners commit to significantly higher investment levels.
The contribution of upcoming industries to Jammu and Kashmir’s GDP is immensely significant. With the Delhi-Katra Express Highway nearing completion and Delhi-Kashmir railway connectivity soon to be operational, alongside Katra’s established status as a major pilgrim hub via the railway network, Jammu is swiftly losing its former prominence. In the near future, industries must play a pivotal role in sustaining Jammu’s economy. These circumstances underscore the necessity of extending the Central Industrial Scheme along with continued financial benefits to secure Jammu’s future.
The BJP-led Central Government has indeed transformed the industrial landscape of Jammu but continued Central support is vital to advance this progress. Cross-departmental collaboration is essential to foster a cohesive environment for industrial growth. The industrial sector’s development in Jammu is an ongoing process, requiring a consistent push for more incentives and enhanced facilities to create an ideal environment for further industrial growth. While significant achievements have been made, sustaining momentum will further require well-coordinated efforts across Government departments to truly realise Jammu’s potential as a thriving industrial region.
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