Concerns mounted as militants stormed the EDI’s Pampore complex initiating a 48-hour long gun-battle that consumed five security men, a civilian and three militants. Damage to the landmark complex brought state’s entrepreneurial incubator into sharp public focus. Masood Hussain profiles the rise of J&K government’s youngest organization manned by Gen Next which is being seen as the new engine for change given the successes it has created in short span of its existence
The raging gun battle was still on and telecast live into the living rooms from Pampore for the past 48 hours. Army was unable to figure out if any of militant trio holed-up in the 5-story J&K Entrepreneurship Development Institute (EDI) was neutralized.
A tense Dr M I Parray, Director EDI, who had flown from Jammu on Sunday morning and was with his son in Ganderbal, gets a telephone call: “Sir, we may have to get in (in EDI) because we cannot leave everything unguarded.” For Parray, it was shocking, impossible and impractical, a literal indecent proposal.
But Maqbool, the person on the line insisted. One of EDI’s ‘restless’ workers, Maqbool was perhaps the last person rescued by cops with 117 others Saturday evening. After spending a night with his family in Tral, he rushed to Srinagar. “We have one building involved in the encounter but we have two others,” Maqbool explained, “cops and soldiers have their duty but we have ours.”
For the next two hours, Dr Parray, father of an IPS officer, had to convince the cops that they will have to help him get two of his employees into the premises. By 3 PM, on Monday, Maqbool and Aadil reported to Pantha Chowk police station and a BP jeep drove them in, amid blasts and blaze. “Half an hour after, we checked into our hostel the encounter was formally over as the three corpses were dropped down by the soldiers,” Maqbool said.
In a huge army of soldiers and cops ubiquitous in the EDI premises, next morning, Maqbool and Aadil were part of a cheering emotional crowd. They first brought a few gallons of water and cleaned the blood-drenched spot where Abdul Gani Mir, EDI gardener, fell to the bullets. His daughter is being appointed in EDI as his colleagues are contributing a day’s salary for the family. Deafening bangs were still on as littered explosives were being detected and blasted. But Team EDI was surrounding Parray in the rare side of the hotel busy in a new brainstorming. Without high-end projectors and LCD screens, electricity and even chairs, the item on table was: how soon can we resume routine?
Once the soldiers’ handover the premises, insurer completes the survey, every item from chairs to computers, that is worth the use should be shifted and the EDI must resume its routine by Saturday morning. Three days, the Team EDI decided, are enough to resume the show. Within next 24 hours, 20-hostel rooms were ready and by Friday evening, more than 160 potential entrepreneurs, currently under training, were communicated that their training resumes on Monday.
“This smoldering building, these mangled air-conditioners, computers and the concrete walls that rockets barely pierced through is not the EDI,” Parray, EDI’s only old man, told his team in a bid to bolster their morale. “You are the institution and that was just the building you operated from.”
That is how the youngest organization manned by the youngest lot of J&K government “employees” work. This distinction makes EDI a game-changer in an area J&K rarely attempted before – helping youngsters to choose their own destiny far away from the government in areas of manufacturing, and enterprise. That partly explains why the phones started ringing in concern minutes after the gun-battle started in EDI.
(J&K EDI employees washing off blood stains a day after encounter ended.)
Established in March 1997 as a society, J&K government mandated it to develop entrepreneurship and entrepreneurial culture in the state. It started its activities only in February 2004 when the government appointed a historian Dr Parray as its Director. As a faculty in the IMPARD (Institute of Management, Public Administration and Rural Development), the 13-member governing body led by Chief Secretary allotted him a few rooms in IMPARD’s M A Road premises to start with.
With the commercial banks operating in J&K contributing from their earnings to offer EDI to start with, it initiated with Entrepreneurship Awareness Programmes (EAPs). It first intervened in commercial floriculture and established 46 floriculture green houses for growing Lillium and carnations besides encouraging nearly 39 growers in aromatic plants like clarysage, lavender and matricaria on 1140 kanals of land.
During its amorphous years, EDI’s real success was to create institutional linkage with bigger players in the mainland. While Entrepreneurship Development Institute of India (EDII) Ahmedabad helped it to understand how entrepreneurship works, its linkage with Central Leather Institute (CLRI) Chennai, National Institute of Agricultural Marketing (NIAM) Jaipur, Export Promotion Council for Handicrafts (EPCH) Delhi, Indian Institute of Packaging (IIP) Mumbai, TMI Academy of Travel, Tourism and Aviation Studies Delhi, Imperial Agritech Delhi, National Institute of Agricultural Extension Management (MANAGE), Hyderabad and other trade bodies helped it understand the market, the grey areas, potential and the policy framework in vogue.
After the government allotted it a piece of land, it created its own address, now spread 60-kanals. This premises witnessed the worst gun-battle of 2016, last week. Three militants after attacking a CRPF bus killed two of them and left many injured. Later, they took position in the EDI and killed army’s three elite commands before they were neutralized after around 48-hours.
The landmark five-level concrete monster that proved a real headache during last week’s operation actually introduced the EDI across Kashmir. With nearly 55000 sq ft area, it witnessed housewarming in 2009. Constructed by J&K’s Police Housing Corporation at a cost of Rs 17 crore, it is one of the low-cost state properties built at least per sq ft investment. It must be Kashmir’s only official building that lacked any cost or time overruns.
(Former Union Minister, Jai Ram Ramesh, with J&K EDI trained youth.)
On Wednesday when Team EDI was permitted for the first time into the premises, it was still smoldering. Almost carpeted with broken glass, not a single item housed in top two levels had survived. The real destruction was in its attic housing the cafeteria and the top floor. “We may have to opt for certain tests to understand the strength of the slabs,” a senior engineer from state’s PWD, mandated to report the government said. “There was blasting and a lot of blaze and it might have impacted the structure.”
To neutralize the holed-up militant trio, army had to get a wheeled canon to bore a hole from the rare. With drones flying overhead to locate them in nearly 20,000 sq ft space, army commandos had to create passage for projectiles to land.
But EDI is not the building but its output. The boost to the EDI was when the NC-Congress government conceived SKEWPY (Sher-e-Kashmir Employment, and Welfare Programme for Youth) with Seed Capital Fund Scheme (SCFS) as its major component. Policy makers believed that youth were unable to get attracted towards entrepreneurship because they are not bankable. SCFS offered them seed money up to Rs 7.50 lakh to enable them access bank loans at slightly concessional rates for setting up enterprises. This is a sort of one-time grant in lieu of an undertaking by individuals that they will not seek a job. If they manage a job in government, they return this amount with 18 percent compound interest. A few cases availed this option.
But the money does not drip in their accounts instantly. Post registration, EDI trains them in areas of their interest, and once their mentors are convinced the candidate has the conviction to deliver, the DPR is framed, his case is negotiated with the bank – J&K Bank is the only financial institution that is banking the scheme, and eventually the unit sets up. The exercise follows once the high power Steering Committee approves the idea.
The scheme was an instant hit. Against 6314 cases approved by the Steering Committee between 2010-11 and January 2016, 4768 enterprises involving 4943 youth were set up. These enterprises have resulted in an investment of Rs 465 crore of which Rs 162.75 crore (35%) is the free money. As per the EDI’s in-house survey carried out in 2015 summer when 3227 units were physically visited, 76.41% were functional. Districts of Kargil and Samba had 100% success and the lowest was seen in Budgam (63%).
Two years later, EDI came up with Youth Startup Loan Scheme (YSLS) in 2012-13. This off-bank credit facility works slightly different from the Venture Capital Fund (VCF). With most of the processes same, it differs with SCFS only on the resource front. Instead of free money, YSLS offers a loan to a maximum of Rs 8 lakh for startups at only six percent of simple interest and that can cover up to 90% of the project cost.
“We believe this is a better one,” insiders in EDI said. “It has better acceptability than the SCFS.”
Performance has been impressive. Against a target of 850 enterprises in four years ending 2015-16, EDI has set up 672 units involving credit off take of Rs 39.45 crore. All these units have led to around 2000 job creations. The 2015 survey found 289 units functional making a success of 76.86%. Unlike SCFS, Kishtwar, Ganderbal, Leh and Poonch reported 100% success and the lowest success rate was seen in Srinagar (39%).
In fiscal 2012, EDI inked an agreement with National Minorities Development and Finance Corporation (NMDFC) to implement its twin loan schemes. Under one scheme, it provides term loans from Rs 3 to 10 lakhs to marginalized sections at 6% simple interest for setting up micro enterprises. Besides, educational loans at 3% simple interest are given.
(Bracing up: EDI team holding a meeting in open post encounter)
EDI’s this basket has grown phenomenally in last four years. It has lent Rs 43.71 crore to 1654 individuals under the term loan scheme. Besides, 76 candidates got a loan of Rs 2 crore to pursue higher education.
The survey found 62.3% units operational in 2015 summer. Kathua, Kargil and Ramban districts have the highest success rate (100%) and the lowest-success districts included Jammu (31%) and Kupwara (45.45%). EDI insiders said since the scheme lacks capacity building component, beneficiaries use the loan for other purposes out of ignorance. But this has not impacted the recoveries which stand at 92%, second highest after Kerala.
It was purely its engagement with the NMDFC that EDI was so keen to get a license as a non-banking financial organization. It is running a huge recovery network to ensure the indebtedness of the individuals does not impact the scheme or the institute. Given its track record, the state government recently authorized it to lend Rs 100 crore more from NMDFC.
After it was associated with Union Rural Development Ministry’s Skills Empowerment and Employability (SEE), usually called Himayat, EDI dovetailed it with the products it already has. “We see the potential individuals having capacity to deliver and help them get the funds from term loan scheme and it is a good experience,” one officer said. So far 401 units were set up under this set up and all are operational.
The initiative envisages creation of 15,000 microenterprises involving 30,000 youth across the state in next four years with access to finance and support services to at least half of them.
But EDI’s activity does not end with the start of the unit. Trainers and managers at the institute and at districts stay in touch with the entrepreneurs and continue handhold whenever required. All its successful entrepreneurs become its role models to attract the new talent and later become visiting faculty.
All these schemes implemented across all districts have introduced a new generation of enterprises, some of whom are a huge rags to riches stories now. Covering a huge diversity of the activity – from manufacturing to restaurants, these entrepreneurs have started changing the ground zero.
Leh’s Kaniz Fatima was doing fairly well in Indian fashion industry. She left her job and availed EDI scheme to create her new identity. Her boutique is one fashion destination in the desert town frequented by foreigners.
In old Srinagar, Shaheena was struggling to lend support to her parents but lacked a cushion. After EDI came into scene, she is a millionaire already.
(Fleeing for life: Civilian on run as militants rushed inside EDI building after they attacked CRPF convey.)
Post migration when Jitender Kumar failed to settle even after being adequately educated, EDI helped him to create Muthi’s most modern diagnostic centre and earn honourably.
Jammu’s Rachna Dubey was facing an existential threat and her kids were about to lose their admission for want of tuition fees. EDI guided her to improve her husband’s bakery business and create a brand people now cherish.
Seemingly, EDI has one of the highest success rates in India and perhaps beyond. Usually start-ups across sectors have the least success rate. But J&K’s massive over-dependence on imports is an advantage that developed and fast developing markets lack.
It was perhaps for this very reason that Telangana government flew its officials to Srinagar for a week to understand the basics of how an EDI should run. EDI faculty had refused to fly out for the lack of time paving way for Telengana officials to come here. “They were impressed by the way we work,” Parray said. “But they were more concerned about the quantity (numbers) than the quality of the enterprises they intended to create.”
For the same reason South Block suggested Kabul to fly its faculty to Srinagar and get a crash course in how the youth can be encouraged to the path of growth, dignity and self-sufficiency. “We had one meeting with them but we have not signed a formal MoU which we are supposed to,” Parray said.
While the word of mouth has been a key factor responsible for attracting the youth towards the EDI, its success in triggering a change has a set of reasons that planners identified, analyzed and put to use. It worked successfully only after the policymakers made individuals bankable.
Firstly, this institution started thinking in terms of having high rate of educated unemployment as a resource and not a problem.
Secondly, it saw opportunities in massive dependence and not the gloom. Gradually, it identified areas which can turnaround using the locally available raw material for local consumption. It triggered the import substitution change that fundamentally altered demand-supply chain in poultry.
Thirdly, unlike traditional negativity that greets visitors in offices, EDI managers not only respond positively but trusted the suggestions with which the individuals came. They trusted an engineer keen to intervene mechanically in the stone mining. Once it was set up, the unit did not prove a success story only but resulted in perhaps the first historic intervention in the stone-chiseling.
Fourthly, this is perhaps the only organization where possibility of corruption is zero. A series of systems are in place in such a way that room for corruption is elbowed out.
Finally, the entrepreneurs are always being monitored and bailed out if they land in bad patches. This creates a sort of partnership.
Watching this sort of systems around, one of its employees quit the job and became an entrepreneur.
But the 200-odd men and women who are behind this biggest success story in J&K are a different breed. They work six days a week from 10 to 5 PM. Unlike 51 holidays that state government employee avail in a year, EDI has only 16 holidays and two restricted holidays. Recently 12 more, mostly restricted to Jammu, were added. They have only 10 days of casual leave in a year, five sick leaves and one earned leave a month as a literal corporate sector policy on leaves is in vogue. EDI has been the first address in the state for biometric attendance where late-comers take less-salary home. In all these years, eight employees were fired for non-performance, which is rare in itself.
For staying as a model, EDI has to work more to prove it is different. It is working towards self sufficiency to reduce its dependence on government.
It has a huge infrastructure. Vitasta, its 13-room guest house was set up in 2001 for Rs 3 crore. In the smoldering building, EDI had south Kashmir’s best conference hall. Far from the city crowd on the banks of Jhelum, this hall was the main battle ground. It was also housing a cafeteria in its attic.
Over the years when it would not require the facility, it will permit others to use this facility. This has helped EDI earn Rs 7.40 crore so far.
(Post Encounter: An inside view of top floor where encounter concluded.)
At one point of time, the EDI would outsource DPR drafting. Now its five-member in-house team earns five times more than their take-home package.
“The revenue we generate goes back to the creation of new infrastructure,” Parray said. “We are not tasked to earn, but to stay as a model we must survive by example and reduce the burden on the government that owns us.” Waiting for the insurance claim, EDI has not sought any funds for rebuilding the infrastructure that was lost in the attack. It has only sought permission to go ahead!
All these factors have created a profile of the organization making EDI a major address on entrepreneurial front. Over the years it has created a constantly-upgraded faculty which is the key reason why central government prefers it for most of the trainings. To utilize its academic capacity properly, the institution is in the process of setting up a school for Entrepreneurship Studies. Already, a Technology, Design, Innovation Incubation Program (TDIIP) has been initiated on pilot basis. In collaboration with the National Science and Technology Entrepreneurship Development Board (NSTEDB), the Centre for Incubation and Business Acceleration (CIBA) is being set up by EDI from its own earnings.
But the organization that has been expanding quite fast in last 10 years may have to first consolidate its gains. Many think, the management should start grooming new leaders. EDI will have to make extra effort to retain the talent that it grooms within the organization and emerge as the one-stop think tank on entrepreneurship in J&K. It must also skip the areas in which it is yet to evolve experise as was the case witht its handicraft related interventions.
Though EDI is one of the earliest government organizations that embraced the modern tools of surveillance and accountability, it still failed in offering any help when three militants barged in. While the army is investigating the killing of its three commandos in the operation, the EDI may eventually have to take its security angle as seriously as its credibility.
For institutions which are at the core of public life, sometimes divine interventions are strangely impressive. After the encounter was over Syed Salahuddin, the Hizb-ul-Mujahideen’s Muzaffarabad based chief announced a reward for the slain Lashkar trio. Perhaps not knowing that Mueed, his son, part of EDI’s IT section, singularly managed saving the crucial hard disk containing vital records. He suffered a fracture during the process.