Editorial: Revival plans sans direction
The government has come up with an idea to resurrect the ailing J&K Horticultural Produce Marketing and Processing Corporation (JKHPMC). For this the government has approved the conversion of government loans and financial assistance released from time to time to the Corporation into a share capital.
JKHPMC was incorporated in 1978 under Companies Act 1956 with an objective of to undertake commercial activities. The initiative was started as a World Bank aided project to assist J&K in pre and post-harvest management, processing and marketing of horticultural produce.
The Corporation, however, got entangled in some serious setbacks especially because of the erosion of capital assets with the eruption of turmoil in the Valley.
JKHPMC faced the erosion of capital and revenue generating assets and the corporation was left dependent on external financial sources. Besides, the officials failed to put in place a mechanism of internal cash generation which resulted in over-capitalization of the Corporation, accrual of liabilities, acute financial sickness and liquidity crisis coupled with working capital shortage.
As of now the outstanding financial assistance of Rs 77.39 crore as on 31.03.2017 against the Corporation has been converted into fully paid-up share capital and the interest amounting to Rs 28.75 crore, has been converted into equity share capital of the Corporation.
The decision has been taken to re-structure of the Corporation, improve its balance sheet, reduce dependence on the government loans and financial assistance, enable the Corporation to secure loan from financial institutions for funding its business plans and to turn around the Corporation.
It is a year business plan that has been formulated for the gradual revival of the Corporation to make it a profitable enterprise.
But, the government it seems has not bothered to move beyond a mere announcement. Though a revival plan has been announced but how will it be set in motion is a million dollar question.
The corporation as of now is faced with a working capital crisis that is going to impact all the future business plans. The Corporation is cash-starved and the liquid resources have dried up to the extent that the committed salaries and other staff related dues remain unpaid to the extent of Rs 37.08 crore including salaries for the past 6 months.
The Corporation was indebted to J&K Govt to the tune of Rs 106.15 crore as on 31-03-2017 on account of loans and other financial assistances released from time to time by the Finance Department.
As a result the Corporation was unable to pay its loans to the Government.
Now the corporation is pinning hopes of four new projects to be completed during the current fiscal. Besides, it also has plans to install more value-addition equipments in the existing Apple Juice Plant and establishment of APEDA funded integrated Apple House with CA Store at Chowdrigund.
But how far will these projects be carried forward in a professional way, is to be seen.