By Dr Fayyaz Ganaie
Jammu and Kashmir faces unique political, social and economic challenges. Decades of devastating political conflict have severely affected major sectors of our economy. The conflict has led to closure of several all weather historical trade links, which has made Kashmir geographically almost landlocked with far reaching consequences for our economy. Labor and capital intensive sectors have taken a major hit, this coupled with a rapid decline in exports, has altered the basic structure of our economy.
The share of manufacturing in GSDP has been on a constant decline, exploitation of some natural resources has hugely increased (e.g. mining and forestry), and agricultural growth has been either negative or stagnant for quite some time now. Due to the ongoing conflict and political instability, flow of investment has greatly declined, which has further limited the growth of sectors which highly depend on external financing.
This conflict has also taken a toll on tourism which has been a significant source of revenue generation and employment for Kashmir. As the conflict has now transformed from a severely violent one to a simmering and relatively less violent phase, time has come for all the stakeholders to work together for economic transformation of Kashmir.
One of the biggest challenges thrown at us by the conflict is economic stagnation coupled with huge levels of unemployment. Our economists and policymakers should consider the possibility of remodeling the existing economic system of the state, keeping in view the fact that several sectors of our economy have been and are exposed to the ongoing conflict. Robust efforts have to be made on several fronts in order to achieve a broad-based economic diversification in sectors which are least affected by political volatility and the overall conflict. The future course of action must involve a strategic shift towards an innovation-driven and knowledge-based high growth economic system which is relatively less prone to the conflict. Such a knowledge-based economy can be ensured by creating an enabling environment which encourages our enterprising youth to launch innovative ventures in knowledge-based areas like Information Technology, Pharmaceuticals, Biotechnology and Robotics with a high focus on exports.
It is only through a knowledge-based high technological startup revolution that we can stimulate economic growth on the one hand and create much needed job growth on the other. Innovative entrepreneurship will alone ensure our economy sustains growth through uninterrupted access to resources, knowledge, markets and low-carbon industrialisation. Entrepreneurship that can provide knowledge-based goods and services has the potential to become the lifeblood of our economic system. It is only through such innovation-driven tech startups that we can build a prosperous society, one which creates opportunity for the broadest base. That can also in the longer run contribute to peace-building efforts and a less vulnerable society.
Though in the last few years a number of innovative entrepreneurial ventures have been launched, but they face many obstacles on their path to establishing a business and scaling up. The challenges faced by startups in conflict areas like Kashmir are many. However political volatility, deficient financing, unavailability of local competitive human resource and an overall absence of an enabling environment are the biggest stumbling blocks.
In the leading Indian startup hubs like Bengalaru, startup founders raise money from angel investors, venture capitalists and through crowd funding. Such is not the case in our state. Our startups have only a few limited and usually expensive funding options (mostly banks), and banks here are generally reluctant to fund startups. This results in early death of many a promising startup.
Experienced and skilled human resource is not available sufficiently locally, which is also a major concern. Jammu and Kashmir is a poor performer when it comes to overall ease of doing business. We lack a business-friendly, more particularly a startup-friendly, regulatory regime. Inertia in the bureaucratic setup is again an inhibiting factor for businesses here.
The first step towards building and nurturing an ecosystem for a conflict-insulated entrepreneurship might be to immediately set up an independent organisation dedicated to promotion of innovative businesses in the state. Such an organisation should be tasked with creation of a self-sustaining ecosystem for startups and businesses in the state. It’s aims should be to efficiently link up existing networks, capital and talent by creating a strong grid of stakeholders from the local corporate and academic sectors and by actually transforming systems that inhibit startups and businesses in a conflict area like ours.
Such an organisation should act as a bridge between startups and policy makers, creating possibilities to quickly identify and remove obstacles faced by startup founders. Such an organisation should provide training and mentorship to entrepreneurs in order to help them in successfully running their businesses running the conflict zone of Kashmir.
Startups don’t need public money. The State should use tax payer money for welfare measures alone. However, to resolve the burning issue of financing startups JK Bank and public sector banks can play a pivotal role by providing a security-free fixed loan to a certain number of genuine tech startups each year. In case of failures of any ventures, JK Bank and the state government should together bear the losses.
In order to improve the quality of human resource the government should make apprenticeship mandatory for all students and incentivise it for local companies.
Once the government lends a helping hand to our innovative and ambitious startups so as to ensure their success they can then accelerate their growth and create the employment and income generating opportunities that will ultimately help the social and economic transformation needed to sustain Jammu and Kashmir state’s path to prosperity and social well-being.
—Dr Fayyaz Ganaie is founder and CEO of Truevet BioPharma (P) Ltd.
He can be contacted at [email protected]