Entrepreneurship eco-system in Kashmir remains undevelopedwith the government failing to acknowledge the potential of startups ingenerating economic growth in the state. Lack of access to finance, market,skill development, and an investment culture that remains dismissive ofbusiness startups and potential entrepreneurs, are the main road blocks.Conventional financing is beyond the reach of small-scale entrepreneurs due tocollateral requirements, making it difficult for investors to commit entrepreneursfrom a range of sectors, including microfinance, skill development andtechnology. There is no appreciation for social entrepreneurship at the policylevel in Kashmir, nor a mechanism to determine the social impact of businessventures. “Investments are only considered feasible if they have commercialreturns. This makes it difficult to secure financing for socialentrepreneurship and business models, which do not indicate immediate returns.A large number of women in both urban and rural areas are also associated withhome-based ventures. However, in the absence of additional financing, the scopeof their business remains limited. Microfinance institutions can help plug thisgap, by making their products attuned with the financing needs of home-based businessventures. Given the risks involved in pursuing a business venture, evenhigh-potential projects fail to expand beyond a certain limit.
Promoting entrepreneurship has its own importance. Kashmirlags behind in creation of startups, with less than half the rate ofearly-stage entrepreneurial activity found in other factor-driven economies.Part of the problem is that most young people coming out of universities prefersearching for a job instead of exploring entrepreneurial career opportunities.
The factors for such low levels of entrepreneurial drive liewithin our culture, bureaucracy, financial hurdles and academic perceptions ofentrepreneurship. Entrepreneurship is associated with small and cottageindustries; there is a stigma with failure and a general resistance to newideas; businesses are rooted in traditional and low value-added sectors. Also,younger business communities, often educated abroad, do not have the requisiteexperience or financing to establish businesses, family-owned businesses areslow to adopt professional modes of management.
The other major constraints in entrepreneurial growth arewith regards to tax administration and tax rates, electricity, capacitybuilding and infrastructure. The issues related to financing costs, economicpolicy uncertainty, macroeconomic stability, customs and trade regulations,anti-competitive practices, business licensing and operating permits, skillsand education of the labour force, are cross cutting in nature and affect allsizes of enterprises.
In such scenarios the government should eliminate thebarriers to entrepreneurship by providing infrastructure, such setup should beprovided which encourage startups and support existing small and medium sizeenterprise by enabling them to adapt innovative strategies and technologies andthus compete more effectively at the global level. The educated, young, andemerging entrepreneurs need to take the lead and be encouraged to become thevanguard of Kashmir’s economic growth.
Bilal Ahmad Dar, a PhD from Jaipur University, is presentlyworking on a project on youth entrepreneurship and education in conflict areasat Kashmir University