The story of Sanatnagar Industrial Estate, Srinagar, Kashmir is not merely a local industrial history. It reflects decades of policy inconsistency, misplaced priorities, and the erosion of trust between the state and its entrepreneurs.

Established in the late 1960s under the vision of Bakshi Ghulam Mohammad, Sanatnagar was conceived as a structured industrial hub to bring scattered small-scale units into an organised ecosystem. However, the government failed to mobilise local industry, and the estate remained underutilised.

In the late 1970s, the state invited outside entrepreneurs with one of the most lucrative incentive packages, including subsidies, tax exemptions, cheap credit, and purchase preferences. Yet, within a decade, most of these units collapsed and exited without clearing dues, leaving behind abandoned infrastructure.

In the early 1980s, local educated unemployed youth revived the estate through personal investment and effort. The industrial ecosystem gradually stabilised, supported by incentives such as VAT exemption, which helped offset structural disadvantages like high costs, limited market, and logistical challenges.

The introduction of GST in 2017 marked a turning point. With the withdrawal of VAT-based incentives and no effective alternative, local manufacturing was exposed to direct competition with industries operating under far more favourable conditions.

The consequences are evident today. Production has sharply declined, several units have closed, and many more are on the brink. Entrepreneurs who once revived the estate now face an unviable future.

This is not a failure of enterprise but of policy discontinuity. If the government cannot restore GST- exemption or introduce a viable alternative, it must allow entrepreneurs the flexibility to transition out of manufacturing.

A practical way forward is to permit a shift from manufacturing to the service sector. This requires enabling reforms such as allowing change of activity, making industrial sheds financially rechargeable or freehold, and removing regulatory barriers.

Sanatnagar’s journey reflects a clear pattern. Vision failed in the 1960s, incentives failed in the 1970s, local resilience succeeded in the 1980s, and policy withdrawal has led to the current crisis.

The choice before the government is clear. It must either continue binding entrepreneurs to a failing model or allow them the freedom to survive.

About the Author:

The author is a mechanical engineer and a second-generation entrepreneur with firsthand experience of policy shifts affecting Kashmir’s industrial sector.

Srinagar, Apr 10: Ease of Doing Business in Jammu and Kashmir continues to remain more a policy assertion than a lived reality, as a deep-rooted disconnect between national-level initiatives and their on-ground execution deprives local industry of critical support.

At the core of the issue lies a structural failure in coordinated governance.

Ease of Doing Business is not achieved through isolated departmental functioning but through an integrated administrative approach where policies are actively translated into tangible benefits.

This responsibility, in J&K, rests primarily with the Industries and Commerce Department.

However, instead of functioning as a facilitator and coordinator, the department’s role has largely remained confined to routine administrative processing.

At the national level, the Government of India has developed an extensive ecosystem of schemes and reforms aimed at strengthening Micro, Small and Medium Enterprises (MSMEs), promoting exports, easing regulatory compliance, and enhancing competitiveness.

Multiple central ministries including the Ministry of MSME, Ministry of Environment, Forest and Climate Change, Ministry of Finance, the Reserve Bank of India, and the Ministry of Food Processing Industries have introduced targeted interventions designed to reduce operational costs, improve access to finance, simplify procedures, and stimulate industrial growth.

These initiatives form the backbone of the Ease of Doing Business framework. However, their success is contingent upon proactive adoption and execution at the state or Union Territory level.

In J&K, this crucial link appears to be missing.

The Industries and Commerce Department is not merely expected to remain informed about these schemes, it is duty-bound to actively secure their benefits for local industry.

This includes identifying eligible sectors, facilitating applications, coordinating with central ministries, ensuring co-funding wherever required, and maintaining follow-up until measurable outcomes are achieved. Yet, there is little evidence to suggest that such a systematic approach has been undertaken.

A key example is the cluster development programme under the Ministry of MSME, which offers substantial financial assistance for creating common infrastructure and facilities.

Designed specifically for regions with dispersed industrial units like Jammu and Kashmir, such schemes could have significantly strengthened local industry. However, their large-scale adoption remains absent.

Equally critical is the department’s responsibility to ensure inter-departmental coordination within the local administrative framework.

It is expected to actively engage with other departments and push for the adoption of central reforms and guidelines relevant to industrial growth.

This convergence is not optional, it is fundamental to industrial facilitation.

For instance, reforms introduced by the Ministry of Environment, Forest and Climate Change, particularly those related to pollution control and regulation of wood-based industries, require active implementation at the local level.

In the absence of coordinated effort, such reforms remain confined to official notifications without translating into practical relief for businesses.

Similarly, financial sector reforms and credit facilitation measures introduced by the Ministry of Finance and the Reserve Bank of India are aimed at easing access to capital for MSMEs.

However, these require continuous engagement with banks and financial institutions at the regional level.

Without intervention from the sponsoring department, enterprises continue to face credit constraints, delays, and in some cases, coercive recovery actions, despite the presence of supportive national frameworks.

Beyond facilitation and coordination, awareness-building remains another critical gap.

A significant portion of MSMEs in Jammu and Kashmir remain unaware of schemes and incentives available to them. Dissemination of information, handholding of entrepreneurs, and creation of institutional support systems are essential functions of a department entrusted with industrial promotion.

However, this aspect remains weak, further widening the disconnect between policy and practice.

The cumulative impact of these shortcomings is substantial.

Local industries have been deprived of financial assistance, infrastructure development has lagged, regulatory bottlenecks persist, and access to markets and technology remains limited.

Businesses are effectively operating in an environment where support mechanisms exist on paper but are inaccessible in reality.

The contrast with other states is stark. Regions that have actively engaged with central ministries, aggressively pursued available schemes, and ensured administrative convergence have recorded tangible industrial growth.

Jammu and Kashmir, despite its unique challenges and special considerations, has failed to position itself within this framework, not due to lack of opportunity, but due to lack of initiative.

The responsibility for this systemic failure rests squarely with the Industries and Commerce Department.

As the designated sponsoring authority, it was expected to act as a facilitator, coordinator, and enabler.

Instead, its engagement has remained largely passive, lacking the strategic direction required to leverage national support systems effectively.

Experts underline that Ease of Doing Business cannot be built on policy announcements alone.

It requires institutions that actively pursue implementation, coordinate across departments, and ensure delivery at the ground level.

In the absence of these functions, the concept itself loses credibility.

In J&K, the widening gap between what is available and what is actually accessed continues to highlight the shortcomings of a system that was intended to bridge precisely this divide.