Calls for Safeguarding MSMEs, Industrial Revival, and Youth Entrepreneurship
Srinagar: The Federation of Chambers of Industries Kashmir (FCIK) has expressed grave concern over reports of coercive recovery actions being initiated or contemplated by banks, including J&K Bank, under the stringent provisions of the SARFAESI Act against Micro, Small and Medium Enterprises (MSMEs) in Jammu and Kashmir.
The Federation has called for an immediate, time-bound moratorium on all such actions, particularly those resulting in the attachment and dispossession of entrepreneurs’ residential and productive assets, warning that indiscriminate enforcement at this juncture could severely damage the region’s already fragile industrial ecosystem.
FCIK has urged the Chief Minister of Jammu and Kashmir, the Deputy Chief Minister, the Advisor to the Chief Minister, and the top administrative leadership of the Union Territory to intervene urgently. It cautioned that aggressive recovery measures risk derailing ongoing efforts aimed at industrial revival and economic stabilization.
“Banks undoubtedly have a legitimate responsibility to protect public funds, but a purely mechanical and coercive recovery approach risks wiping out enterprises that have survived decades of instability, prolonged shutdowns, natural calamities, and repeated economic shocks,” said Shahid Kamili, Head of the FCIK Advisory Committee comprising presidents of industrial associations across the Kashmir Valley.
“Forcing families out of their homes in the name of recovery not only erodes human dignity but also extinguishes entrepreneurial confidence and social stability,” he added.
The Federation noted that the Government of Jammu and Kashmir is currently reviewing the Industrial Policy 2021–30, with a stated focus on revival, restructuring, and rehabilitation of stressed enterprises. FCIK stressed that the revised policy must explicitly provide institutional mechanisms for offloading distressed units, reviving viable enterprises, and restoring them to productive industrial activity to support employment generation and sustainable economic development.
FCIK said it has formally taken up the matter with both the Government and J&K Bank authorities, asserting that premature and aggressive SARFAESI actions undermine the intent of ongoing policy reforms, potentially rendering proposed revival and rehabilitation frameworks ineffective even before their implementation.
The Federation further pointed out that the Government has constituted a high-level committee under the chairmanship of the Finance Secretary, with the Secretary Industries and Commerce and the Executive Director of J&K Bank as members, to recommend, among other issues, a credible mechanism for One-Time Settlement (OTS) of NPAs and stressed accounts. The committee is yet to submit its recommendations.
As a constructive solution, FCIK proposed the creation or effective utilization of an Asset Reconstruction Company (ARC) to park Non-Performing Assets (NPAs). Such a mechanism, it said, would help avoid prolonged litigation and coercive proceedings while enabling professional, time-bound, and value-oriented resolution of stressed accounts.
“An ARC-led framework can unlock trapped value, ease balance-sheet stress for banks, and offer entrepreneurs either a credible revival pathway or a dignified exit—rather than trapping them in a perpetual cycle of distress and uncertainty,” the Federation observed.
FCIK also voiced serious concern over the discouraging signal being sent to educated youth in the region. It said the spectacle of existing entrepreneurs facing relentless coercive actions, without humane exit or revival mechanisms, is deterring young people from entering entrepreneurship.
“At a time when public policy promotes startups, self-employment, and industrial growth, such actions are pushing youth away from enterprise creation—ironically when industry remains the only sustainable avenue for large-scale employment and economic stability in Jammu and Kashmir,” the Federation stated.
Reiterating that it does not support willful default or avoidance of legitimate bank dues, FCIK appealed for a humane, empathetic, and calibrated approach, including a temporary moratorium on SARFAESI actions until the industrial policy review is concluded, a transparent and non-discretionary OTS framework is rolled out, and a structured distress-resolution mechanism is operationalized.
“The moment calls for coordination—not confrontation—between the Government, banks, and industry,” FCIK emphasized, adding that a compassionate and pragmatic response could restore confidence, protect livelihoods, and pave the way for renewed industrial resurgence in Jammu and Kashmir.
