J&K’s MSME Sector Faces Its Toughest Test Yet—All Eyes on Govt Decision

The industrial belt of Jammu has been holding its breath—waiting for nearly ₹50 crore in pending GST reimbursements and turnover incentives that the Finance Department has yet to release. What began as routine delays has now escalated into an urgent public appeal, as industries warn of a mounting cash-flow crisis that threatens their operational stability.

In a strongly worded communication, Lalit Mahajan, President of the Bari Brahmana Industries Association (BBIA)and Co-Chairman of the Federation of Industries Jammu, has called upon Chief Minister Omar Abdullah, who also holds charge of the Finance portfolio, and Deputy Chief Minister Surinder Kumar Choudhary to intervene immediately and break what he describes as a bureaucratic deadlock. According to Mahajan, the prolonged delay in releasing sanctioned funds is hurting MSMEs at a time when they need liquidity the most.

A Region’s Growth Story Meets a Financial Logjam

Jammu’s MSMEs—considered the backbone of the region’s manufacturing ecosystem—depend heavily on timely reimbursements of GST claims and turnover incentives to maintain cash flow and sustain day-to-day operations. These incentives are designed to help units pay salaries, clear bank obligations, meet statutory dues, and keep production lines running smoothly. But the system appears to have hit a wall.

BBIA highlights that two major reimbursement streams have stalled simultaneously. The first involves ₹25 crore in approved GST reimbursement claims for the period ending June 2025, which the State Tax Department has already forwarded to the Additional Treasury, Gandhi Nagar. The second blockage concerns another ₹25 crore tied to turnover incentive reimbursements for FY 2022–23, a sum sanctioned and submitted by the Director of Industries & Commerce to Sadar Treasury, Jammu. Despite being fully processed and approved, both sets of claims remain unpaid solely because the Finance Department has not released the requisite funds.

For industrial units operating on narrow margins, this is not merely a delay—it is, as Mahajan puts it, a “chokehold.”

Industry Units Struggle as Funds Remain Blocked

When reimbursement pipelines freeze, liquidity evaporates. Mahajan warns that industrial units across Bari Brahmana are now struggling to pay salaries, clear bank interest and EMIs, meet government dues, and sustain production cycles without interruption. Many units are already feeling the strain of restricted cash flow, and for some, the next step may involve scaling down production or even temporary shutdowns.

He emphasized that the sanctioned claims lie “pending with Government Treasuries due to non-release of funds,” adding that this signals a worrying trend where the Finance Department appears to give “least priority” to clearing industrial liabilities. Such inaction, BBIA argues, threatens the region’s competitiveness and undermines the government’s own industrial policy commitments.

BBIA Pushes for Immediate Intervention—and a Way Forward

Mahajan’s plea is both clear and urgent. BBIA has requested Chief Minister Omar Abdullah, Deputy CM Surinder Kumar Choudhary, and Finance Principal Secretary Santosh Dattatreya Vaidya (IAS) to personally intervene and ensure immediate release of funds to the concerned treasuries. According to the association, doing so will provide instant relief to struggling units, restore confidence in government incentive mechanisms, and prevent a deeper economic slowdown in one of Jammu’s most critical industrial hubs.

As the industrial sector waits, all eyes are now on the Finance Department. The release of these funds could determine whether Jammu’s MSMEs regain momentum—or continue battling a financial crisis that threatens their very survival.