Central Procurement Rules Devastating Jammu & Kashmir's Small Industry Sector, State Government Admits in Assembly

Srinagar: The Jammu and Kashmir government has acknowledged in the Legislative Assembly that the implementation of new central public procurement rules has dealt a severe blow to the region's Micro, Small and Medium Enterprises (MSME) sector. The disclosure came in response to a question raised by CPI(M) leader and Kulgam MLA Mohammed Yousuf Tarigami. The drastic reduction in procurement routed through the Jammu and Kashmir Small Industries Corporation (SICOP) has pushed the livelihoods of hundreds of thousands of people into deep crisis.

The change in procurement policy has directly affected 5,000 small industrial units that were dependent on SICOP, leaving over three lakh people who relied on these units without a viable means of sustenance. The root cause of the crisis is the mandatory routing of all government procurement through the Government e-Marketplace (GeM) portal, administered by the central government under the General Financial Rules (GFR) of 2017. This shift has effectively wiped out the marketing support that SICOP had been providing to local manufacturers, simultaneously cutting off the corporation's primary source of revenue.

The J&K government further admitted to the Assembly that no socio-economic impact assessment was conducted before the new rules were enforced — a significant lapse that has now compounded the fallout. With no government grants being extended to SICOP, the corporation is struggling severely to meet even its basic obligations, including the payment of staff salaries and employee benefits. The institution is currently navigating acute financial constraints with no clear relief in sight.

While a revival plan for SICOP has reportedly been drawn up, the government was unable to provide any definitive timeline for its implementation. Authorities told the Assembly that alternative mechanisms to safeguard the employment security and livelihoods of the corporation's workforce are also under consideration. The government's own admission serves as a stark illustration of how the abrupt shift to centralised digital procurement systems can devastate local industries and ordinary working people who have built their lives around them.