Even when Kashmir offers boundless opportunities in agriculture, horticulture, food, clothing, tourism, handicrafts, and other untapped resources, fostering entrepreneurship in Kashmir has been a challenge for decades. Most avenues have not been leveraged to their full potential due to socioeconomic factors and conflict in the region. This has resulted in the state’s struggle to gain economic strength in the face of prevailing unemployment and dwindling tourism. The valley needs a sustainable solution to strengthen its economic base, which can only come from growth at grass roots level. At a time when industrial development of Kashmir is being touted as means to provide a much-needed boost to the local economy, young entrepreneurs in Kashmir are dealing with a lack of support and unfavourable circumstances.

The youth in Kashmir, amidst all the challenges, have been displaying entrepreneurial zeal and taking strides towards progress. Fostering innovative mindset, increasing interest in entrepreneurship is often a catalyst that drives development objectives including growth, employment, and equity. For entrepreneurs to successfully contribute towards the society, however, they need vital resources such as funding, mentoring, human capital of a growth mindset, suitable infrastructure, and supportive government policies.


In J&K, only 8-9 percent of the labour force is employed by public sector. Promoting business at micro, small, and medium levels could nudge economic activity and enhance the skills and potential of the youth in the Valley whose employment options today are limited. Owing to the tough situation in the area, the government should take steps towards furthering upskilling and training of the workforce and preparing them ahead of time.

Entrepreneurs and small businesses facing multi-fold challenges

Entrepreneurs and small businesses, despite having the potential to provide solutions to various socioeconomic problems in the Valley, are struggling to succeed. The problem is multi-fold. The educated youth from universities in the area prefer a job over exploring entrepreneurial opportunities. Due to the absence of an ambitious entrepreneurial class with an outward looking approach, the youth has only a few examples to motivate themselves to outgrow the dogma of ‘job-security’ and take entrepreneurship as a serious career option. 

The lack of expertise and innovation of technology that is vital for the formation of any product or service a business can capitalise on also contributes to the situation. Challenges such as lack of adequate infrastructure in terms of power, transportation, regular interruptions in internet and communication channels further impact existing businesses massively, resulting in a direct blow to their revenue. The geography of the state makes it difficult for major industrial development to happen, and frequent policy changes due to unstable governments also adds to the overall difficulties faced by entrepreneurs and small businesses.

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When asked to submit recommendations for the forthcoming startup policy with the Directorate of Industrial Policy and Promotions, entrepreneurs in the Valley demanded support to meet functional needs such as power supply, safe place to work, and non-interrupted internet connectivity. The recommendations also included pleas to address issues related to GST and rehabilitation for banks in areas that have suffered due to unrest and floods. A strong industrial policy framework and ease of doing business were also requested.

Creating the administrative and regulatory framework to foster entrepreneurship

Focused and consistent support from the government alongside an instituted structure to foster entrepreneurship can help address challenges and provide J&K’s economy the boost it needs. Realising this, the administrative and regulatory authorities in the state have started to take action. The State Administrative Council (SAC) of Jammu and Kashmir recently approved the J&K Startup Policy 2018. Under this initiative, startups will receive office space at subsidised prices and monthly allowance of Rs 10,000 to Rs 12,000. Startups recognised by the government will also receive a one-time assistance of Rs 10 lakh to Rs 12 lakh.

In addition,Seed Capital Fund Scheme (SCFC) and Youth Startup Loan Scheme (YSLS) have been instituted. The loan amount available to entrepreneurs has been enhanced and the age limit to apply for government support has been reduced, both steps aimed at driving more young talent towards entrepreneurship. Steps have also been taken towards empowering the disabled to take on entrepreneurship.

Innovators seeking aid under the Startup Policy are not required to disclose their annual turnover, and the criteria of experience has been removed for startups applying for government tenders. The government is also considering formulation of a policy to help startups get listed on the stock exchange. Plans to hire global consultancies to help startups overcome hurdles in operations has also been explored. The government has also acknowledged the need for an IT Park for start-ups and is planning to provide free space office space to address some of the logistical challenges.

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Measures for skill development also essential

While creating a support framework for entrepreneurs is vital to cultivate a startup ecosystem in J&K, it is equally important to pay close attention to the development of skills of the youth in the state. The government has designated Jammu Kashmir Entrepreneurship Development Institute (JKEDI) as the nodal agency for the implementation of the Startup Policy and to help the youth up the curve of skill development. JKEDI helps train aspiring entrepreneurs in 3-week Entrepreneurship Development Programs (EDP) and has already helped hundreds in Pampore, Kargil, Pulwama, Jammu, Kupwara, and Bari Brahmana.

EDP includes lessons on skill development self-development, and performance improvement, in addition to business-cum-sector-specific training. Candidates with varied educational qualifications like MBA, BTech, postgraduates in different streams of education, and commerce graduates have been a part of these trainings. As per provisions made under SCFS, JKEDI also provides trainees with financial support, in the form of 35 percent non-refundable seed cost (subject to the educational qualification of the individual) and loan on concessional interest rates via J&K Bank (which has decided to set up a separate vertical for startups). JKEDI has also been holding special training for women in the area. Other institutions such as National Bank for Agriculture and Rural Development (NABARD) have also taken step in the same direction, with an example being a skill development project on mobile repairs held at Baramulla.

To further boost the ecosystem, the government is considering the revival of J&K State Overseas’ Employment Corporation Limited (JKSOECL) to facilitate placement of skilled manpower within and outside the country. They are also exploring the creation of an angel and venture capital network to make funding more accessible to the startups in the state.

Grassroot growth the need of the hour

The idea behind initiatives of this kind is to take entrepreneurship beyond urban areas and incubate startups and small businesses in the rural areas as well. In the past, similar approaches have been effective in giving a boost to the local economy. On a similar tangent, Karnataka initiated an incubation network, aimed at nurturing an ecosystem of growth amidst educational institutions in Tier 2 and 3 cities. Youth in the area was encouraged to identify local problems and address them by using the concepts of frugal innovation, ultimately developing appropriate technology-based solutions and working prototypes. They were also encouraged to intern with startup incubators recognized by the state. Recognised incubators in the state were also given matching seed funds to further increase the funds available to startups by 200 percent.

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In Maharashtra, the Maharashtra State Innovative Startup Policy 2018 has been implemented to target the development of 15 incubators, attract Rs 5000 crores investment, facilitate 10,000 startups and create 500,000 direct and indirect jobs. Benefits such as rebate in SGST and relaxation of norms in government tenders for startups are also being offered. Maharashtra Virtual Incubation Centre is also being considered to provide online financial, legal, cloud, IP, and mentorship assistance to startups in the state.

J&K is rich in culture and has valuable resources. It has massive potential to benefit from various industries, including agriculture, tourism, apparel, and handicraft. However, the growth will only hasten when backed by governmental policies to foster entrepreneurship in the state and a strong support mechanism including mentorship, financial, and technological assistance. The immense potential currently reflects in the success of ventures such as the Kashmir Box – a Kashmir based online marketplace which sells a variety of Kashmiri products including Pashminas, Woolen clothes, Ponchos, Phirans, Kaftans, Saffron, Dry fruits, Wazwaan, Shilajit, Kehwaas, Beauty, and Décor to national and international consumers.

The company raised an undisclosed amount of funding in early 2018 and claims to have brought together a huge number of local artisans and farmers, 200 producers, and over 50 local brands on its platforms. It claims to serve over 50,000 clients in 40 countries and aims to have a base of 36,000 suppliers on its platform soon. The company also claims that its efforts have resulted in a 40 percent increase in the wages of its artisans and farmers. Dealing with the same challenges as any other startup in the Valley, companies like Kashmir Box can pave a way for growth at grassroots level. They are an example of how strategic steps taken by the government could create an investor-friendly environment, infrastructure for logistical issues, and developmental framework to foster entrepreneurship and uplift the economy in the region in a sustainable manner.

The author is a corporate lawyer based in New Delhi

 



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