Entrepreneurship eco-system in Kashmir remains undeveloped with the government failing to acknowledge the potential of startups in generating economic growth in the state. Lack of access to finance, market, skill development, and an investment culture that remains dismissive of business startups and potential entrepreneurs, are the main road blocks. Conventional financing is beyond the reach of small-scale entrepreneurs due to collateral requirements, making it difficult for investors to commit entrepreneurs from a range of sectors, including microfinance, skill development and technology. There is no appreciation for social entrepreneurship at the policy level in Kashmir, nor a mechanism to determine the social impact of business ventures. “Investments are only considered feasible if they have commercial returns. This makes it difficult to secure financing for social entrepreneurship and business models, which do not indicate immediate returns. A large number of women in both urban and rural areas are also associated with home-based ventures. However, in the absence of additional financing, the scope of their business remains limited. Microfinance institutions can help plug this gap, by making their products attuned with the financing needs of home-based business ventures. Given the risks involved in pursuing a business venture, even high-potential projects fail to expand beyond a certain limit.
Promoting entrepreneurship has its own importance. Kashmir lags behind in creation of startups, with less than half the rate of early-stage entrepreneurial activity found in other factor-driven economies. Part of the problem is that most young people coming out of universities prefer searching for a job instead of exploring entrepreneurial career opportunities.
The factors for such low levels of entrepreneurial drive lie within our culture, bureaucracy, financial hurdles and academic perceptions of entrepreneurship. Entrepreneurship is associated with small and cottage industries; there is a stigma with failure and a general resistance to new ideas; businesses are rooted in traditional and low value-added sectors. Also, younger business communities, often educated abroad, do not have the requisite experience or financing to establish businesses, family-owned businesses are slow to adopt professional modes of management.
The other major constraints in entrepreneurial growth are with regards to tax administration and tax rates, electricity, capacity building and infrastructure. The issues related to financing costs, economic policy uncertainty, macroeconomic stability, customs and trade regulations, anti-competitive practices, business licensing and operating permits, skills and education of the labour force, are cross cutting in nature and affect all sizes of enterprises.
In such scenarios the government should eliminate the barriers to entrepreneurship by providing infrastructure, such setup should be provided which encourage startups and support existing small and medium size enterprise by enabling them to adapt innovative strategies and technologies and thus compete more effectively at the global level. The educated, young, and emerging entrepreneurs need to take the lead and be encouraged to become the vanguard of Kashmir’s economic growth.
Bilal Ahmad Dar, a PhD from Jaipur University, is presently working on a project on youth entrepreneurship and education in conflict areas at Kashmir University