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.
