Wednesday 30th Apr, 2025
The unfavourable conditions, which prevailed here made people to look for a risk free, secure employment and that was available only in the form of a government job.
To enable entrepreneurship development in Jammu and Kashmir, EDI has been provided the role of handholding of the state youth, who want to shed the tag of job seekers and turn into job providers by opening their own enterprises. In a detailed interview with Editor Endeavour Inam Ul Haq, Director EDI Dr M I Parray talks about the success, challenges and future plans of the institute.
Q. From last two decades Jammu and Kashmir is witnessing rise in unemployment, whereas there is saturation in only employment sector available here that is government jobs. In this scenario, what is the role of EDI in creation of self-employment opportunities and jobs for the youth of the state?
Unemployment here is more of a voluntary nature because everybody wants to be in government sector. Though there are reasons for that. The unfavourable conditions, which prevailed here made people to look for a risk free, secure employment and that was available only in the form of a government job. And then the private sector here, particularly in Kashmir is almost nonexistent, local industry is not developed. But if people are ready to strive for something on their own, they succeed and create niche for themselves. We have some good examples.
In order to address this unemployment problem and boost the entrepreneurship culture in the state through sustained efforts the Jammu and Kashmir Entrepreneurship Development Institute was launched. The purpose of the EDI is to train and guide youth in various sectors and provide them opportunities to create their own enterprises and become entrepreneurs.
Q. How far you have been successful in this mission?
When EDI started to work, it first provided training to the interested youth and then these aspirants would approach banks for loan to start their businesses. From 2004 to 2009 we trained almost 9,000 people but the level of success was not even 2 percent. Once these candidates went out to the banks and other departments, they would have to face lot of problems. Banks need guarantees, mortgages to secure their money, but most of these young people have nothing except for their degrees. Therefore, we revamped our programs and decided that we need not to just train people but create an environment which will provide all the requirements a startup needs, like, DPR preparation, mentoring, finance and some basic training in running a business. Meanwhile in 2009 as the government launched SKEWPY, a complete entrepreneurship development programme was provided under the name Seed Capital Fund Scheme and later on new schemes were added.
Q Can you provide us details of these schemes presently available?
Under Seed Capital Fund Scheme, it was decided that these unemployed youth who have nothing to mortgage or fund their project will be provided a capital share by the EDI on behalf of the government as a subsidy or margin money. In the scheme, 35 percent project cost upto a certain limit depending upon the educational qualification of the aspirant is provided as subsidy and 65 percent is financed by the J&K Bank with an interest rate of about 10 percent.
In 2012, we started another scheme in the name of Youth Start-up Loan Scheme. In this scheme, there is no bank involvement in financing, rather direct funding by the government through EDI is provided as a soft loan with 6 percent simple interest upto Rs 8 lakh. This scheme is completely hassle free, with no bank involvement and minimum formalities. The eligibility criteria for these two schemes is as per rules for seeking government employment.
Besides these schemes, few more schemes under Ministry of Minority Affairs, Government of India through National Minorities Development and Finance Corporation (NMDFC) like Micro Credit and Term Loan are also available through EDI. Under Term Loan Scheme, low-income candidates are provided soft loan on 6 percent simple interest rate. Candidates, who does not come under the income slab are also eligible in the scheme but with higher interest rate.
Now another scheme named as Term Loan Scheme for Micro and Small Enterpriseshas been approved recently. The scheme will cover non-minority aspirants and those who do not come under the NMDFC’s term loan and EDI’s other schemes. The eligibility and qualification for this is minimum so that it can cover maximum aspirants.
Q. What are the challenges of implementing theses schemes and what is the success rate?
When we started the Seed Capital Fund Scheme, the biggest challenge was to make people understand that it is not free money to be distrusted in the name of subsidy. Candidates would come to us and demand 35 percent subsidy component with the hope that once they get the subsidy they do not need to implement the project. It was very difficult for us to make people understand that subsidy is only for those people, who will implement their projects and the money will go to the bank account rather than handing over it to people in cash. In 2010, when the scheme was first started, we had a target of 700 cases but we disbursed only 30 cases because people does not wanted to do any business rather to get the margin money and run away. However, with time that mindset has changed to a large extent and in last four years upto 2014-15 we disbursed on average 1000 cases. In 2015-16 more than 2000 units were opened under different schemes of EDI and our target for current financial year is 5,000 units.
Q. Aspirants who come to EDI say the institute works like any other government department running self-employment schemes. They say entrepreneurship development institute means developing an entrepreneur and full fling all his needs but that is lacking?
No, that is not at all true. First, we don’t provide loan to anyone unless we don’t build their capacities, change the mindset. We build an enabling environment for an entrepreneur.
Getting finance for a business is not an issue. Even a bank can provide a loan directly but EDI gives a direction, looks at viability of a project one has to take, explores market, builds capacity and that is what EDI is doing. Then we make business profile (DPR) and an aspirant does not need to go to bank, we take his case to bank and make them sanction it. Particularly, lot of stress is done on viability of a project.
Q. Some candidates complain about the bank’s rigidity about purchases, which may vary as per DPR due to different reasons in the market?
We have also received few complaints about that and are working on how to sort it out so that candidates do not have to face any problem in this regard.
Q. Candidates also complain about lack of coordination between EDI and different departments?
We try to coordinate with all government departments and institutions to help the candidates complete their formalities quickly and easily but you know these government departments have their own way of working. We talk to different departments, write letters to them. Though, I consider these complaints genuine but as EDI does not have any authority over these departments, therefore, sometimes we are unable to help despite our will and efforts.
Q: As you said that EDI has the job to create maximum number of entrepreneurs or business persons instead of people looking for government jobs. When people come to EDI to look for guidance about different sectors and viability of different projects. But there is almost no research based guidance on the business sectors and economic opportunities so that EDI could guide them what to do and which sector to choose. This makes many a times random selection of a business or sector without looking for viability, availability of raw material etc putting that person at risk of a failure?
National Skill Development Corporation has conducted a detailed survey of our whole state, with guidelines for every district, which sector has potential in a particular place. Besides, we have a broader idea of our main economic sectors. My counsellor at any district center or EDI main offices can guide about that. Like we have agribusiness, tourism, handicrafts as main sectors here. We import huge quantity of poultry and mutton every year therefore these sectors have high potential.
Q But this is very generalized and even a common man can talk about classification of sectors like this. But when we talk of data backed guidance, like the availability of a particular raw material, consumption patterns or availability of a particular skill that is missing?
Yes that is true we don’t have such kind of research and data based counseling available so far but we will definitely work on it and provide a complete guide handy for the aspirants who do not have knowledge but want to do something. We have opened counseling centers at every district of the state, so that candidates need not to visit Srinagar or Jammu cities for counseling and other formalities.
Q Entrepreneurship development needs incubation centres where there is a complete package for a startup interms of mentoring, financing, office space and all other facilities, which are needed to flourish entrepreneurship. But so far we don’t have any thing like that in J&K?
We are equally concerned about the lack of incubation facilities and you should be happy to know that the governing body of the institute has already approved a proposal to establish a business incubation centre at EDI, Pampore campus. The Department of Science and Technology, Government of India will provide Rs 5 crore to establish Technology Business Incubator (TBI). I would also like to share that we are coming up with more infrastructure worth Rs 30 crorefor the increased training activities here.
Q There are number of candidates, who want to go for a joint venture so that they can establish bigger units in partnership but EDI has stopped to sponsor joint ventures?
We have not stopped partnership businesses, as we cannot do that. But presently we are not encouraging joint ventures as so for the results of these joint ventures are not good. Most of these ventures go into disputes as the two parties soon after the start get into disagreements.