Although the industrial promotion policies have put a whopping fiscal burden of Rs 8,340 crore on the state and Central governments from 2007 to 2012, the policies have failed to achieve the desired results and the main objectives of such incentives have been defeated.
The industrial packages were announced in the state to generate employment but their results are discouraging.
The Comptroller and Auditor General (CAG) in its latest report pinpointed loopholes in the functioning of the Industries and Commerce Department, which is responsible for properly utilising such incentives.
“Low industrial output, low employment generation, low end and low value addition manufacturing have defeated the objectives of the Central and state governments’ industrial promotion policies,” the report observed.
It also pointed out the underutilisation of Central assistance, unplanned execution of industrial estates/growth centres, leading to unproductive investments, inadmissible and irregular payment of subsidies.
The audit assessment during the five-year period from 2007 to 2012 shows that the Central and state governments bore a fiscal burden of Rs 8,340.11 crore (Central government Rs 5,221.37 crore, state government Rs 3,118.74 crore) to provide incentives to the industrial units whose number as on March 2012 was 26,674 with total workforce of 1,33,173 workers.
“The total employment generated from the industrial units in the state was 1.03 lakh as on 2007. It rose to to 1.33 lakh at the close of the financial year 2011-2012 while the financial incentives provided to the industrial units from 2007-08 to 2011-12 ranged between Rs 1,289.89 crore and Rs 2,475.88 crore.
“Thus, the per capita fiscal burden for each worker employed by the industrial units (including those industrial units not covered by the state industrial policy 2004) was between Rs 1.09 lakh and Rs 2.40 lakh per annum during the same period”, the report stated.
The audit, however, noticed that the data of employment generation was recorded on the basis of certificates provided by the unit holders at the time of their registration and it was observed at the District Industry Centres (DICs) that the employment generation by the industrial units was neither monitored nor verified by the DIC general managers after commencement of production by the industrial units.
The CAG report observed that the sole yardstick to assess the impact of the industrial policy being pursued by the Central and state governments involving fiscal concession to industrial units was job creation.
Employment generation was the basic objective of industrial packages announced in the state. The average employment generated in each unit in the Kashmir province ranged between four and five and in Jammu province between 11 and 16.
CAG findings
The Comptroller and Auditor General (CAG) in its latest report pinpointed loopholes in the functioning of the Industries and Commerce Department, which is responsible for properly utilisation of incentives.
Low industrial output, low employment generation, low end and low value addition manufacturing have defeated the objectives of the Central and state governments’ industrial promotion policies
The underutilisation of Central assistance and unplanned execution of industrial estates/growth centres, have led to unproductive investments
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