From Grievance to Growth
As Jammu and Kashmir prepares its Budget for 2026–27, a new data-driven policy paper has brought the lived realities of Kashmir’s startup founders into sharp focus. Titled “Grievance to Growth”, the report submitted by Kashmir Angel Network (KAN) argues that the region’s startup ecosystem has matured beyond ideation and now requires precise, execution-focused interventions to unlock its next phase of growth. The recommendations are formally placed before the Government of Jammu and Kashmir for consideration in the upcoming budget.
Startups beyond the idea stage
Contrary to the popular perception that Kashmir’s startups are largely experimental or idea-driven, the report presents evidence that most ventures are already operational and revenue-generating. Based on a structured survey of 19 active founders across the Valley, the study finds that a majority of startups have reached early or mid-commercialisation stages. These are businesses that have achieved product-market fit and are selling to real customers, but are struggling to scale due to systemic bottlenecks.
Sectorally, the ecosystem shows notable diversity. Digital services and education together account for nearly half of the surveyed ventures, while tourism, agriculture, and emerging technologies such as drones and 3D printing also feature prominently. This mix reflects a shift from traditional sectors to knowledge- and service-led enterprises, signalling a gradual modernisation of the regional economy.
The ‘Capital and Compliance Trap’
At the heart of the report is a diagnosis of what founders describe as a “Capital and Compliance Trap”. Access to capital emerges as the single biggest challenge, ranked unanimously as the number one barrier to growth. Nearly half of the surveyed startups remain bootstrapped, relying on personal or family savings. While this demonstrates resilience, it also severely constrains risk-taking and expansion.
The most acute pain point is the shortage of working capital at the growth stage, often referred to as the “Valley of Death”. These firms have proven business models but lack the liquidity to scale operations, hire talent, or meet rising demand. Founders make it clear that conventional bank loans, tied to collateral and rigid repayment structures, are ill-suited to innovation-driven businesses. What they seek instead is risk-tolerant, founder-friendly seed and growth capital.
Regulatory friction and time delays
If capital is the primary bottleneck, regulatory friction is the silent killer. An overwhelming 75 per cent of respondents cite the absence of a functional single-window clearance system as their biggest administrative challenge. Entrepreneurs report navigating a fragmented maze of departments for registrations, approvals, and compliance filings, often with little clarity or coordination.
Compounding this is a striking awareness gap. Only 37 per cent of founders say they are fully aware of existing government schemes and policies meant to support them. According to the report, this is not due to apathy but to complexity policies exist, but are difficult to access, interpret, and operationalise.
Perhaps most damaging are delays. Approval timelines of six to twelve months for grants and regulatory clearances are common. In fast-moving digital and service sectors, such delays can render support meaningless by the time it arrives, threatening the very survival of young firms.
Talent and mentorship gaps
Beyond capital and compliance, the report highlights a growing human capital dilemma. Startups struggle to attract and retain skilled technical talent, largely because early-stage firms cannot match market salaries. This fuels a steady brain drain from the region.
Founders also express dissatisfaction with the quality of mentorship and evaluation. Many technology-driven startups are assessed by non-technical panels, leading to misaligned decisions. There is a strong call for domain experts and entrepreneurs with real scaling experience to be embedded in evaluation and mentoring processes.
Five budgetary levers for transformation
To address these challenges, KAN proposes five concrete, budget-linked interventions:
- A single digital compliance portal integrating all registrations, filings, and scheme applications, aimed at reducing complexity and improving policy awareness.
- A mandatory 30-day Service Level Agreement (SLA) for all startup-related approvals and disbursements, replacing the current months-long delays with predictable timelines.
- Subsidies for compliance and operational costs, including a 50 per cent reimbursement of statutory compliance expenses and support for essentials such as co-working space, electricity, and high-speed internet.
- A 2–3 per cent government procurement quota for local startups, providing predictable revenue streams and market validation beyond one-time grants.
- A Rs. 50 crore dedicated technology fund, ring-fenced for digital and tech startups, evaluated by seasoned domain experts and recognising modern digital expenses such as cloud services and SaaS tools.
Investment, not expenditure
The report stresses that these proposals should be viewed as structural investments rather than fiscal burdens. By helping viable startups survive the cash-flow negative phase, the government can prevent business failures, retain skilled talent, create high-value jobs, and expand the formal tax base. Over time, this shift towards digital and service sectors could diversify Jammu and Kashmir’s economy and reduce over-dependence on traditional industries.
A call to bridge policy and practice
As budget deliberations gather pace, “Grievance to Growth” positions itself as a bridge between the voice of founders and the pen of policymakers. It calls for fewer but deeper interventions, focused on execution quality and measurable outcomes. For Kashmir’s startups no longer asking for symbolism but for systems, the message is clear: with timely capital, simpler rules, and credible support, the region’s entrepreneurs are ready to convert resilience into sustainable growth.
By: Shabir A. Handoo
Faisal Kawoosa
