The Jammu and Kashmir finance department circular endangers the SSI

SRINAGAR: The J&K government order of September 17, 2019, which orders all its departments to make purchases of goods such as furniture, etc. Through the e-Governance Marketing (GeM) portal, it has endangered 2,000 small-scale industries (SSI) and jobs of 15,000 workers.

On September 17 of last year, the financial commissioner of the J&K AK Mehta Union Territory issued a circular ordering all government departments, as well as autonomous agencies, to acquire goods or items required in their offices through from the GeM portal.

To begin, on November 22, the secretary of the department of rural development and delivered Rs 38.5 crore to two directors of rural development in the regions of Jammu and Kashmir for the purchase of office furniture for the councils of development of blocks and panchayats.

The secretary explicitly mentioned in the order that purchases should be made through the GeM portal according to the circular of the finance department. It was also mentioned in the order in which furniture items should be purchased from branded companies.

The order of the finance department, which appears to be biased against the industrial units based in Jammu and Kashmir, is the first of its kind since the annulment and revocation of the special status of the previous state on August 5 of last year.

The SSI unit owners groups in the Jammu and Kashmir regions have expressed fears about the future of the industrial sector in the newly created UT.

If the finance department continues to issue September 17 type orders, it is likely that most small-scale units in the Jammu and Kashmir regions will face a close in the coming months, said Lalit Mahajan, president of the association of holders of SSI units.

In particular, the previous state administration under the president's government in 1995 issued a circular on November 1 of that year, instructing all government departments and autonomous agencies to make purchases from local SSI unit holders through Small Scale Industries Development Corporation, a government nodal agency, to ensure that items destined for supply are delivered at reasonable prices after an appropriate tender.

The order of the finance department on September 17 could result in the reduction of 15,000 workers, said Masood Ahmad, president of the head of the SSI unit in Srinagar .

The president of the association of holders of the SSI unit of Jammu, Lalit Mahajan, said: “The department of MSMEs (micro, small and medium enterprises) under the ministry of industries of the Union has made it mandatory for state governments or UT to do purchases of 20% of the local SSI unit holders under number 11 of the Public Procurement Policy Act of 2006.

J&K's new dispensation under the lieutenant governor needed to devise a policy that would not allow UT industries to die, Mahajan added.

A senior industry department official said the government was marking a policy that would accommodate the owners of local industrial units.