Srinagar, Aug 30 (Inditop.com) Finding it hard to even pay wages to its over 1,700 employees, Jammu and Kashmir Industries, an umbrella organisation for state government-run firms, may sell assets and close down many of its ventures in the industrially backward state.
The group, which has been criticised for alleged mismanagement, has 16 manufacturing units under its wing and has accumulated losses of over Rs.375 crore (Rs.3.75 billion) since it was incorporated in 1963 with a share capital of Rs.20 crore.
“We have to sell our industrial land and other assets or the government should come to our rescue by reviving the enterprise with a huge financial support to sustain us,” an official, who did not want to be identified as he was not authorised to speak to the media, told Inditop.
The group has already shut down seven of its industrial units, including a spinning mill and a leather plant, and two other factories in Jammu, and a ply board and a pharma unit in Kashmir.
To cut expenses, the company has proposed to cut down staff of a joinery mill, a woollen apparel manufacturing unit and a silk factory in Srinagar, as well as a knitting factory, a joinery mill in Jammu and its liaison office in Delhi.
In addition, the firm has already sold 25 hectares of land to government departments for around Rs.80 crore to square off its liabilities, which also run in crores.
According to a source, the group has short-listed nearly 1,000 employees for a voluntary retirement scheme under which they will be given one-time settlement packages.
Getting a budgetary support of over Rs.3 crore by the state government , the current annual turnover of the company is around Rs.4 crore, which is negligible given the average monthly expenses of around Rs.1.5 crore.
Company managing director Shanawaz Ahmad Tak said the government had agreed to pay the firm for a Rs.7.6-crore revival package for five units, while it would divest stake in two; these will be managed on the public-private partnership model.
Tak sounded optimistic about the future and hoped that the government’s financial support would help revive the five units. “The company will be a good source of economy for the state,” he told Inditop.
Experts in the state attribute the decline of the group to gross mismanagement and lack of concern by successive state governments.
“The governments never took this unit seriously, which otherwise had a great potential of being a viable venture for the state,” said Mussaddiq Ahmed, a business management professor in Kashmir University.
“The company suffers from gross mismanagement and lack of seriousness. I have heard employees are not even getting regular salaries. What is the point of running these sick units?” Ahmed said.
Perhaps Ahmed’s remarks about “gross mismanagement” are not misplaced. Run an eye through the company’s website – http://jkil.gov.in/board.htm – which was perhaps last updated in 2007.
It still names former chief minister Ghulam Nabi Azad as chairman of its director board. As a rule, however, the chief minister of the state is chairman of its board of directors and the minister of state industries and commerce is its vice chairman.