in December 2009, Sher-e-Kashmir Employment and Welfare Programme for Youth (SKEWPY) has been NC government’s major policy initiative. Apart from reorganizing employment exchanges into counseling and employment centres, offering stipend to the educated unemployed for three years, the major component of the policy is creating entrepreneurs through Entrepreneurship Development Institute, Women’s’ Development Corporation and ITIs.The most critical part of the Seed Capital Fund (SCF) is offering selected and trained entrepreneurs 35 per cent of the project cost (from of three lakh rupees to a million) free. The money is not to be returned as long as the individual does not opt for a government job. Since the scheme devours the best of the venture capital fund (VCF) schemes, some people call it blatant corruption.
Candidates having 10+2 to graduate level qualification can avail free money to the tune of three lakh rupees, post graduates can get half a million, technically qualified (doctors, engineers, MBAs etc) can get Rs 7.50 lakh and in projects requiring costly technologies the policy gives a million bucks. Basically an EDI brainchild, the policy envisages seeking applicants and short-listing the best in a transparent manner, training them and helping them prepare detailed project reports (DPR). In stage-II, they are being linked to J&K Bank that sponsors the project. Bank loans are covered under Credit Guarantee Scheme of Credit Guarantee Trust of India and without collateral mortgaging requirement.
EDI deserves credit for taking the scheme to a super-fast mode by matching the speed at which desperation dominates the unemployed population. Though the first enterprise by debit to the scheme is yet to start functioning, the EDI has already created a record. The Institute is tasked to create 1000 entrepreneurs a year for five years ending March 2015. “Initially all initiatives suffer from teething problems but we have passed that stage,” says Dr M I Parray, Director EDI. “We have already trained 995 entrepreneurs by the end of December and one quarter is still there.”But training is just the first baby step. Under the scheme it has to be followed by preparation of DPR which goes to bank that has a right to reject a proposal if they don’t find it feasible and viable. Once approved, the DPR needs mandatory steering committee approval after which the seed money goes to the bank account of the entrepreneur. And finally, it is the bank that has to release the balance funds for implementation.
By now, EDI sources tell Kashmir Life 344 DPRs involving 368 entrepreneurs stand submitted to the J&K Bank, debt syndicator under the scheme. So far the bank has cleared 255 enterprises involving 273 entrepreneurs and an investment of Rs 28.04 crore. Steering Committee that takes the final decision has so far approved 192 enterprises involving 196 entrepreneurs. “These cases envisage a total investment of Rs 23.01 crore of which Rs 9.43 crore is term loan, Rs 5.52 crore is working capital and Rs 1.45 crore is the contribution of the entrepreneur.
This requires a seed capital of Rs 6.62 crore of which we have already released Rs 3.89 crore in 118 cases,” says Dr Parray. “We are in the process of clearing the rest.”What makes things impressive is that this process was completed in a record time in a year that had almost five months devoured by strikes and curfews. “There were certain problems while negotiating the deal with the bank and finally the agreement was signed on September 17 which left barely seven fortnights till date and we did all this in this much of time,” added Parray.
Those trained, fall in different categories. There are general traders, fair price shops, mobile clinics, handicraft shops, commercial floriculture, fashion outlets, manufacturing units besides poultry, sheep breeding and dairy farms. But experts suggest the EDI should devise its prioritizing list. Let the first priority go to import substitution. It also may require reviving offering its entrepreneurs both forward and backward linking network so that marketing does not contribute to their non-performance later, at least in dairy and poultry sector. Earlier it successfully evolved one such system in commercial floriculture.
