0 discussionpaper16aug05

Enterprising Ladakh
Prosperity, Youth Enterprise and Cultural Values in Peripheral Regions

Discussion Paper No 1

Market Opportunities

July 2005

Ladakh Autonomous Hill Development Council, Leh
Druk Pema Karpo Educational Society
Drukpa Trust

in association with
SECMOL

Preface
This Discussion Paper marks the one-third stage in an 18-month project entitled
‘Enterprising Ladakh’. The Paper seeks to identify economic opportunities available
to Ladakhis – especially young Ladakhis - in local, national and international markets.
The Paper will be discussed at a Workshop in Leh in July 2005, with the objective of
identifying economic activities that Ladakhis themselves consider feasible,
acceptable and appropriate within Ladakhi society and values.

Subsequently, the project team will scope the skills and attributes required to access
the preferred market opportunities, while the final stage of the project will outline a
new school curriculum to impart enterprise-related skills and motivation to young
Ladakhis, alongside traditional teaching of cultural and ecological values.

‘Enterprising Ladakh’ is a project being conducted by the Ladakh Autonomous Hill
Development Council Leh, Druk Pema Karpo Educational Society and Drukpa Trust,
in association with SECMOL.

The findings set out in this Discussion Paper are largely the work of a team of faculty
and postgraduate students from the SP Jain Institute of Management & Research,
Mumbai, led by Professor Jiban Mukhopadyay, Professor M. S. Rao and Professor
Nirja Mattoo (Chair of the Centre for Development of Corporate Citizenship).

The findings will be refined in the light of the outcome of the abovementioned
Workshop, and further work by economists from the European Union.

You are kindly invited to communicate your views on this Discussion Paper to the
project team:

Project Coordinator
'Enterprising Ladakh'
Hemis Complex, Zangsti
Leh, Ladakh -194 101
Phone: +91 94191 77536; 252 133
enterprisingladakh@rediffmail.com

This document has been produced with the financial assistance of the European Union. The
contents of this document are the sole responsibility of Ladakh Autonomous Hill
Development Council Leh, Druk Pema Karpo Educational Society and Drukpa Trust, and can
under no circumstances be regarded as reflecting the position of the European Union.

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Executive Summary
Ladakh Autonomous Hill Development, Leh (the ‘Hill Council’) has formulated a
Vision Document entitled ‘Ladakh 2025’, aimed at transforming the Ladakh region to
an economic powerhouse, without adversely affecting its unique culture and ecology.
In order to help implement this Vision, the project ‘Enterprising Ladakh’ has identified
eleven economic areas to focus on:

1. Agriculture & Agribusiness
2. Travel & Tourism
3. Handloom & Handicraft
4. Information & Communication Technology
5. Media & Communication
6. Health & Biotechnology
7. Waste Management & Recycling
8. Micro-finance
9. Building Design & Construction
10. Non-conventional Energy Sources
11. Army Outsourcing

This Discussion Paper presents a roadmap to help achieve some of the Ladakh 2025
objectives. In order for such an initiative to succeed, the private sector will need to
play a vital role. Consequently, the focus of this Paper is to explore the various
market opportunities that exist in the above-mentioned sectors.

On the basis of feasibility studies detailed in associated Working Papers (available at
www.enterprisingladakh.org), these 11 sectors were divided into short-term, long-
term and support activities. Short-term implies immediately actionable sectors and
includes Agriculture & Agribusiness, Travel & Tourism, and Handloom & Handicrafts.
The long-term activities require certain basic infrastructure support before they can
be fulfilled and these include Information & Communication Technology, Media &
Communication, and Health & Biotechnology. Waste Management & Recycling,
Micro-Finance, Building Design & Construction, and Non-conventional Energy
Sources form the support that will supplement the above activities. Though the army
is one of the biggest markets for Ladakhis, related opportunities are not addressed
here in view of the limited information available.

Many diverse things are unique to Ladakh: from being the solar capital of India to the
production of fruits such as apples and apricots. The Paper lists Ladakh’s
comparative advantages - but certain gaps are identified that hold back Ladakh from
turning these from ‘comparative advantage’ to ‘competitive advantage’. The Paper
covers these gaps in detail. It is here where the private sector needs to step in and,
with the Hill Council, chart and implement a path towards the successful realisation of
‘Ladakh 2025’. The Paper also sets out measures to create a strong enabling
environment to facilitate the initiatives taken by private entrepreneurs.

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Agriculture & Agribusiness
From the analysis of this sector, proposals are made to facilitate entrepreneurship
and cooperative activities in the nascent food processing industry. Other
recommendations include: increasing the economic viability of small and marginal
farming activities by promoting organic agriculture, and increasing food security and
self-sufficiency in terms of fruit and vegetable production by developing its
commercial viability.

Travel & Tourism
The demographics of tourists were thoroughly analysed to identify target markets.
The cultural tourism plan presented in this Paper is a step towards making Ladakh a
place that is truly a tourist’s dream - but Ladakhis themselves will need to manage
the Ladakhi environment to ensure it can deliver that dream. The plan emphasises
the need to increase the spatial spread of tourism within Ladakh, which has until now
been concentrated in Leh. “Ladakh: the Himalayan gift to India” gives a taste of a
possible branding strategy.

Handloom & Handicraft
Two plans for Pashmina processing and one plan for a Thanka painting workshop
are recommended. The project also explored the woodcarving sector, which holds
considerable potential for entrepreneurs.

Information & Communication Technology (ICT)
ICT is in a nascent state in the region. Feasible areas of business were identified as
‘low-end’ ICT solutions, internet centres, computer institutes, hardware maintenance
contractors and telecom solutions. But this will take some time before most will
become commercially viable.

Media & Communication
Recommendations include: the start of a printing press; development of the
entertainment sector with emphasis on music cassettes, video albums and films;
stress on publishing new books, periodicals, guides and journals that match the
demands of Ladakhis and tourists; improvement in the opportunities for Ladakhis in
technical and non-technical areas in AIR and Doordarshan; and impetus on the
creation and maintenance of websites.

Health & Biotechnology
Commercialisation of the Amchi medical system and health tourism are the major
focus areas proposed. Until now, the Amchi medical system has not functioned
commercially and the Paper provides a framework should the Amchis themselves
decide to follow this path. In addition, Ladakh with its abundant hot water springs
provides a unique opportunity in the field of health tourism.

Solid Waste Management & Recycling
Improved solid waste management could act as an infrastructure service for other
business sectors. It would primarily support and give a fillip to the other economic
activities prevalent in the region. At present, solid waste management in Ladakh is
carried out by the public sector with little private participation. The associated

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Working Paper discusses various measures to foster private participation in this
sector.

Micro-Finance
The major focus of the analysis was to devise ways and means to mobilise funds
lying idle in banks towards productive purposes, and thus boost the local economy.
Also, microfinance should give an impetus to entrepreneurship activity in the region,
especially by womens groups.

Building Design & Construction
Possible businesses in this sector include architectural & design consultancy,
contracting businesses in carpentry, plumbing, electrical installation, maintenance
and repair, firms involved in procurement and supply of building materials, retrofitting
of existing buildings using solar principles etc. Recommendations include setting up
an ‘Institute of Building Design & Construction’, developing strict ‘Building Codes and
Regulations’ for all new buildings and providing financial incentives to solar retrofit
existing buildings.

Non-Conventional Energy Sources
The power sector is the basis for development of any region. The project addressed
micro-hydro and solar energy applications as the focus area. Opening of consultancy
firms based on build-operate-transfer in the field of micro-hydro and opening of
franchise outlets for solar energy application product could be considered.

Many opportunities exist, but their realisation will depend on four key factors:

1. Motivation: Traditionally, Ladakhi society was self-reliant and sustainable.
However, a generation has grown up that enjoys government subsidies and
looks to government (including the military) for lifelong employment. The thrust
of the Discussion Paper is to set out a roadmap for Ladakhis to become
economically self-reliant again, in a sustainable manner. Ladakhis themselves
need to generate the wealth needed to maintain the artifacts related to their
culture and traditions.

2. Environment: Ladakh’s once pristine environment has been, and continues
to be, polluted; and Leh, Ladakh’s main town, has become shabby. If Ladakhis
want to offer eco-tourism to Indian and international visitors, Ladakhis
themselves will need to clean up certain areas, manage the environment in a
sustainable manner and lead by example.

3. Energy: Substantial economic development in Ladakh is unlikely until at least
Leh district has a sufficient and reliable source of energy, at a reasonable
economic price. Until that time, Ladakh will be restricted to small-scale local
activities and selected niche markets.

4. Telecommunications: Abundant opportunities exist in the ICT sector, but
few will be accessible to Ladakhis until adequate telecommunications
infrastructure and reliable power become available.

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Table of Contents

Executive Summary

1. Introduction
2. Ladakh 2025: The Vision
3. Resource Analysis
4. Agriculture & Agribusiness
5. Travel & Tourism
6. Handloom & Handicrafts
7. Information & Communication Technology
8. Media & Communication
9. Health & Biotechnology
10. Non-conventional Energy Sources
11. Solid Waste Management & Recycling
12. Building Design & Construction
13. Microfinance
14. Role of the Public Sector
15. Concluding Remarks

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1 Introduction

According to the latest census, Leh district has a total population of 1,20,000, of
which nearly 32% are categorised as ‘working population’. Presently, most of the
population direct their education towards attainment of jobs with government or
military/para-military organisations and appear content with this prospect. But such
jobs are becoming increasingly rare and the Ladakh Autonomous Hill Development
Council Leh (the ‘Hill Council’) foresees a time in the near future when public sector
jobs will be scarce, unemployment will increase and discontent may arise in society.

1.1 Objective

This Discussion Paper seeks to identify market opportunities for Ladakhis - especially
young Ladakhis - to create their own employment, while remaining grounded in
Ladakhi society and culture, and maintaining the ecological balance and cultural
heritage of the region.

1.2 Methodology

The methodology followed the steps described and illustrated below:

Acquaintance: Through observation, interaction and literature survey. In order
to identify market opportunities in Ladakh, the team had to have sound
knowledge about the natural resources, the cultural, religious and social fibre
of Ladakhi society - before drawing any opinions and/or conclusions.
Identification of Markets: Through opinion, reports, statistics, judgment and
inference. Different statistics, reports etc. including the latest Census Report
were consulted. These provided concrete grounds for specific fieldwork.
Analysis and Validation: Through cross-verification, interaction and
application of management concepts and principles, supported by facts and
figures, government policies, other agency reports and brainstorming
sessions.
Recommendations: Recommendations evolved through presentations and
discussions with a panel of stakeholders including representatives from the Hill
Council, Drukpa Trust, DPKES, SECMOL, SPJIMR and the Project Co-
coordinators.

Methodology

1st Phase (Bangalore, Delhi, & Mumbai) 2nd Phase (Leh)

Websites Interviews Interviews Field Visits

Miscellaneous (Articles, Focus Group Meetings
Reports)

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2 Ladakh 2025: The Vision

(Excerpts from the Hill Council’s Vision Document)
“There are four broad sections being covered in the Ladakh 2025 Vision Document:
the Traditional Economy, the New Economy, Physical Infrastructure, and Social
Infrastructure. The individual sectors that fall under each category are:

1) Traditional Economy 2) New Economy
o Agriculture o Information Technology
o Livestock Husbandry o Tourism
o Small Scale & Cottage Industries

3) Physical Infrastructure 4) Social Infrastructure
o Urban Infrastructure o Health & Environment
o Rural Infrastructure o Education
o Water Resources o Conservation of Natural Resources
o Power & Energy o Social & Cultural Values
o Micro Planning & Governance

3 Resource Analysis

For any kind of economic activity to prosper, including the service industry, a good
network of roads, sufficient power, good transport facilities, skilled manpower and
sound financial resources are important. This section of the Paper gives an idea
about the resources available today.

3.1 Transport Infrastructure and Services

Most rural villages have been connected with the roads constructed by the state
Public Works Department, whereas major roads connecting block headquarters are
maintained by HIMANK ( Border Road Organization) and other central government
agencies.

Buses ply regularly between all the major villages and Leh. A local transport
association operates trucks, vans, etc. But the region is cut off from the plains for
almost 7 months during winter; the road linking Srinagar and Manali is closed. During
this period, Leh is connected to the rest of India through daily flights operated by Jet
Airways and Indian Airlines. Military Planes also fly their daily rations from
Chandigarh and Delhi to Leh.

3.2 Power

The per capita consumption of energy is about 9800 Kcal per day. The annual
electricity consumption is 175 kwh. Electricity generation is either diesel-based or
hydro-based. Of the total generation capacity of 13.19 MWs, 8.36 MWs is diesel-
based, while the remaining 4.8 MWs is hydro-based. The present unrestricted
demand is estimated at 58.53 MWs, with the current shortfall being 45.34 MWs (i.e.
less than a quarter of customer demand is satisfied). This power demand-supply gap

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is projected to diminish to 22.3 MWs by the year 2010. People of Leh town, for most
part of the year, receive electricity only for about 4 hours a day, typically 7:00pm to
11:00pm. Government envisages certain power projects and is earnestly working on
them, but they are not likely to be sufficient to satisfy future demands.

3.3 Qualified Human Resources

The literacy level of the district is around 62%. There are approximately 300 schools
in the district, 1 college and 1 industrial training institute (ITI). However, there is a
dearth of quality technical education in the region.

3.4 Telecommunications

Ladakh’s telecommunications infrastructure is rudimentary and is a major handicap
to economic development. Mobile telephony started in the Leh area in 2004 and is
expected to spread steadily to main population centres. Internet connections from
Leh are unreliable, slow and of limited capacity. Improved infrastructure is a
precondition for the realisation of many opportunities in the economy.

3.5 Finance

District Industries Commission, Leh, provides subsidies for entrepreneurs willing to
set up industrial units in Leh. The only requirement is a detailed project report. There
are two major banks: State Bank of India and Jammu Kashmir Bank offer loans to
entrepreneurs at a flat interest rate of 12% p.a. with six-month interest payment
cycle.

4 Agriculture & Agribusiness

4.1 Ladakh’s Comparative Advantages

Climate: The mild Ladakhi summer provides farmers with an opportunity to
sell off-season vegetables and fruits with virtually no competition except from
cold-storage/processed products. The climate is ideal for exotic vegetables
that are usually imported into India.
Organic-by-default Agriculture: Ladakh’s tradition of organic farming
techniques reduces the need for a time consuming and expensive transition to
organic agriculture, which other areas in India require for organic certification.
Disease/pest free environment: This translates into disease-free seeds and
planting material for export, low/no pesticide costs and high yields under
correct conditions.
Unique, high value products: Fruits like seabuckthorn and apricot which are
not as freely/abundantly available in the rest of India. Seabuckthorn grows
wild, in uncultivable areas and has high potential.

4.2 Business/Entrepreneurship Opportunities

Food Processing: Processing fruits (seabuckthorn, apricot) and vegetables
(especially peas, tomatoes and potatoes) into value-added forms with greater
revenue generation potential, longer shelf-lives that extend spatial and time-

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based availability in and out of Ladakh. Products include jams, juices, oils,
dehydrated/preserved/canned forms, purees etc.
Commercial Greenhouses: Commercial cultivation of Indian/exotic
vegetables/flowers in large greenhouses for sale to the rest of India, meeting
internal demand, and supplying the army on long-term contracts.
Aromatic Oil Extraction: From indigenous herbs and flowers and exotic
species like geranium: sale to tourists, for making scented bath oils, scented
candles etc.
Seed Production: High quality, disease-free seeds, bulbs, corms and other
planting material of Indian and exotic fruits, flowers and vegetables.
Natural Dye Production: There are a large number of naturally occurring
dyes that can be processed into natural dye powders, which can then be
exported to the rest of India and abroad, or used internally in the textiles and
handloom industry.

4.3 Gaps Identified

Finance: Significant financial investment and working capital is required for
setting up economically-viable food processing, compared with alternatives
like tour operations in Ladakh. Greenhouses, oil-extraction units are capital
intensive.
FPO certification: Most entrepreneurs are unaware of the rigorous
certification process and require technical guidance. Significant investment is
required prior to obtaining the certification, with no guarantee of success.
Packaging: Packaging constitutes 20-30% of the price of the product, tying up
a large proportion of the working capital. Small units lack economies of scale,
bargaining power and technology.
Marketing & Branding: Unprofessional packaging and marketing techniques
lead to low brand recognition and consumer awareness/willingness to buy.
Unique aspects of products are lost.

There tends to be a vicious circle: for setting up the food-processing infrastructure,
FPO certification is needed. FPO certification underpins the business plan and
project report that the entrepreneur must submit to a bank as part of a loan
application. As long there is no certainty of obtaining the certification, banks are
hesitant to lend, and it is virtually impossible for the entrepreneur to obtain the
certification without the loan to set up the infrastructure.

4.4 Recommended Areas of Focus

Food processing can fill the need gap of farmers, entrepreneurs and the local
economy in a profitable manner, and initiate the process of entrepreneurial
activities by demonstrating immediate and visible benefits to all involved. Two
areas of immediate focus are processing seabuckthorn and apricot.
Successful activities in these areas are feasible due to a greater awareness,
wider need-gap, a demonstrated local and tourist market both during the
tourist season and in the off-season, and the relatively short gestation period
for projects. The projects are also scalable, benefit farmers directly, and
provide opportunities for educated youth.

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Organic Certification is a longer-term objective, requiring three years and
greater levels of commitment and expense, and also a certain maturation in
the market for the produce in India.

4.5 Interventions & Policy Recommendations

The proposed approach has two main prongs of attack:

Setting up small-scale food parks based on the cluster concept of industries
at village, block and zone levels, and leasing out start-up units and facilities to
entrepreneurs and cooperatives. Shared infrastructure, technical guidance
and shared procurement and logistics will cut down on the major impediments
experienced by cooperatives and entrepreneurs.
Setting up a ‘Ladakh Agribusiness & Marketing Board’ (LAMB) to look
after marketing, external linkages, technical assistance, facilitation of
certification and mobilisation of finance.

4.6 Role of Government

The role of the government should be limited to that of ‘enabler and facilitator’. It is
required to make phased investments in the infrastructure for the small-scale food
parks/clusters (with grants in aid from the Ministry of Food Processing Industries) and
facilitate the formation of LAMB. It will be also required to provide the initial interface
between external technical and marketing agencies like KVIC, APEDA, HPMC,
CFTRI, and FRL.

The organic agriculture certification process and setting up of commercial
greenhouses will require a more proactive role in terms of technical assistance to
farmers.

4.7 Role of the Private Sector

The entrepreneur/cooperative has the major role to play here. While the government
will facilitate the setting up of the units, the functioning will be entirely in the hands of
the private sector. S/he will be free to co-operate with NGOs and government in
technical and marketing matters. The government should assist in building brands
and marketing linkages, and the entrepreneur will do the rest. Large-scale
investments by corporate bodies are not encouraged due to the fragility of the
region’s eco-system.

5 Travel & Tourism

Ladakh is one of the very few high-altitude cold deserts in the world. The
barren mountains provide a great place for adventure sports like rock climbing,
hiking etc., while the picturesque valleys provide great scenic beauty for the
trekkers.

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It is one of the last bastions of Tibetan Buddhism in the world and has a
unique culture that is appreciated by foreigners and Indians due to its
simplicity and non-westernised nature.


Adventure tourism: Involves trekking, rock climbing, and river rafting and is
quite famous with groups of foreign tourists and a very small population of
Indian tourists.
Cultural/Community-based tourism: Involves longer stays at a place and
getting a feel for the culture of the place through practical involvement in the
day-to-day chores of the host.
Edu-tourism: Involves mostly conferences, training, brain-storming sessions
and management development programmes.
Spiritual tourism: Involves visits to religious places or festivals, in the context
of Ladakh’s monasteries and sacred places, and offers a place where
Buddhists and others may find their roots.
Health tourism: Involves treatment through the use of local knowledge and
materials like natural herbs or hot springs. Both the resources are amply
available in Ladakh in the form of Amchis and natural high-altitude flora and
fauna, which has medicinal properties.
Winter tourism: This market could be developed with unique sub-zero dry
conditions with winter sports, ice theme parks etc. The infrastructure required
is huge, but if promoted, could be turned into a major tourist hot spot for
domestic tourists.

5.3 Gaps Identified

Seasonality and accessibility: The frequency of air services is very low, with
6 flights operating per day in and out of Leh. This becomes a real problem as
the Leh-Manali and Leh-Jammu highways are closed for about 7 months of
the year.
Poor promotion and marketing of brand ‘Ladakh’ is responsible for the
poor turnout of the domestic tourists. The major negative impacts of tourism
seem to be a result of indiscriminate budget tourists. The domestic tourists are
not that aware of Ladakh and some foreign tourists may be deterred by
terrorism and conflict in other parts of the state.
Limited impact of economic benefits: At present, there seems to be very
little retention of the benefits of tourism particularly in areas outside Leh. There
is also very little reinvestment in other productive sectors of the economy from
tourism earnings.
Ladakh-specific tourism strategy is missing today. Tourism policy is
determined by the State of Jammu & Kashmir and the formulation and
implementation of a Ladakh-specific tourism strategy has been impeded. The
Hill Council has little leeway in terms of formulating a tourism policy for
Ladakh.
Diversifying tourism. There has been (and continues to be) a great
emphasis on traditional trekking. Other areas associated with wilderness and
adventure such as rafting, and tourism based on thematic trekking, nature
tourism based on biodiversity etc., have been explored very little.

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Lack of professionals: This is a real problem as most professionals are hired
from outside Ladakh and the income generated within Ladakh filters out.
Lack of a good database on tourism - both on the supply and demand sides
of tourism, as well as the impacts and implications of tourism for the
environment, economy and culture of Ladakh.


Cultural Tourism: Balance between the preservation and promotion of
Ladakhi culture and the economic benefits of tourism
Adventure Tourism: This is the Core Competency for Ladakh and requires
relatively little investment in infrastructure.
Spiritual Tourism: Ladakh is one of the few remaining bastions of Tibetan
Buddhism in the world, with numerous ancient monasteries, palaces and other
holy places.


Branding: Promote the abovementioned three focus areas and package into
one brand identity.
Improve Connectivity: Both air and road connectivity to and within Ladakh
need to be improved. In view of the liberalisation of air transport, air
connections are likely to improve as market demands evolve.
Training: Set up professional training institutes such as a Tourism
Management School and/or a ‘Mountain School’, and adapt the school
curriculum to equip Ladakhi youth with appropriate skills and encourage them
to become more inclined towards this sector.
Basic Amenities: Improve basic facilities in Leh so that tourists’ stay
becomes more comfortable.
Incentivise Home-stays: Give villages more incentives so that home-stays
can be encouraged for domestic tourists as well.

6 Handloom & Handicrafts

Pashmina is a raw material available only in Ladakh in India and thus creates
a differentiator and gives a comparative edge for the local value addition.
The Pashmina produced by the Changra goat is one of the best wools in the
world.
Unique motifs and natural dyes.


Opportunities exist for entrepreneurs in the field of Pashmina de-hairing,
Pashmina spinning – centralized /decentralized and Pashmina processing.
Presently, shawls are the only widely known Pashmina product popular
worldwide. Possibility of product expansion, which could take place in
Pashmina products.

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Thangka painting and woodcarving.

6.3 Gaps Identified

Lack of value addition: Pashmina has been traditionally produced in Ladakh,
but it has been Kashmir which has the face of Indian Pashmina, popularly
known as “Cashmere” after Kashmir. Thus this region which produces the
‘gold’ does not receive the economic benefits.
Lack of skills: The skills already exist, but in a crude form. Ladakhis do not
have the expertise that the Kashmiris have in terms of the value addition of the
raw Pashmina.
Lack of Organisation: The entire sector is totally unorganised and each of
the organisations involved are moving in their own directions without any
formal structure to guide them or any concerted efforts towards a common
goal.
Lack of Branding: The tourists coming to Ladakh are sold 30% Pashmina
under the name of pure Pashmina - thus a branding strategy is the call for the
day.


Pashmina: The focus should be on developing internal processing and
weaving skills so that the value addition takes place in Ladakh and hence the
benefits accrue to Ladakhis. Hence the investments and training activities
should be directed towards de-hairing facilities, spinning and weaving
installations and equipment, and developing expertise in weaving of Pashmina
shawls and new Pashmina products.
Thangka Paintings: Ladakh has a long tradition of Thangka painting. These
skills should be passed to the next generation and this could be facilitated
through creation of a Thangka painting school, and commercialisation of
students’ work.
Marketing and branding of handloom products: The branding of Ladakhi
products is non-existent, while Kashmiri products have a high recognition in
the market due to intensive marketing and branding efforts. Ladakhi
handicrafts have to be proactively branded to be able to achieve price premia.
Quality Assurance: Due to the circulation of fake Pashmina products and the
sale of mixed Pashmina-low quality wool products, there is a chance of hurting
the nascent industry. This area should be a major area of concern.


Marketing and Distribution: In this high value market, there is a need to
aggressively market the products and create awareness of a separate brand.
Purity Brand: In order to curb the fakes business and create a differentiating
factor in the product, a Certifying Agency needs to be set-up, which shall be
the nodal agency for certifying the products. This could be the ‘unique selling
point’ of the Ladakhi Pashmina products with zero blending.
Certifying Agency: A formal trademark of purity has to be developed and this
process must be one of the clauses of the business plan that the government

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offers to the entrepreneurs. This would make the marketing of the product
much easier for the entrepreneur.

7 Information & Communication Technology (‘ICT’)


There is no discernible comparative advantage for Ladakh in this area. Internally,
however, there is huge potential for ICT applications.


Various options available to entrepreneurs are as follows:
Business process outsourcing and IT solutions;
Setting up internet centres;
Computer institutes and tutoring;
Hardware maintenance contracts.

7.3 Gaps Identified

Telecommunication Infrastructure is not proper. Unless steps are taken to
maintain reliable communication channels and lower internet charges, setting
up an ICT industry in the region will be difficult.
Power: Power has to be improved if ICT is to thrive in the region. In its
absence, all other policy decisions would not produce the desired effect.
Power shortage is the common running issue in all the areas investigated.
Currently power is supplied for only 4 hrs per day on average.


ICT Infrastructure: Especially satellite, fibre-optic/other links;
Power Supply: This is the main area that can act as an enabler for
development of this sector;
Education: IT awareness and education are essential for building up the
human resource and customer base essential for all aspects of ICT use and
service providing.


Polytechnic and Engineering College: Setting up a Polytechnic that provides
courses in computer software and hardware subjects, video editing, graphic
designing etc is essential.
Computer Education: Compulsory computer education for students in all
schools from 6th standard should be made a norm.
Private Participation in Education: Bring in private institutes to teach computer
skills in schools until the government develops proper infrastructure.
IT Curriculum: The present curriculum is very basic in nature. It should be
revised taking into consideration the present industry demands. Industry

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participation should be solicited. It should be revised every 2-3 years so as
ensure that it remains updated with the changes in the IT sector.
Encourage Entry of Private Institutes: Private participation in the sector is a
must to kick-start the process. Encourage private institutes like NIIT, Aptech to
set up their training centres in the region.
Course Certification: Another pressing issue is that of course certification.
Most of the courses in Leh are not certified and hence do not help students
get jobs. A DOEACC certification centre should be opened in Leh.
IGNOU as the Nodal Agency: IGNOU has a ready and tested framework for
computer courses. In fact, IGNOU can work in an advisory mode.
STPI unit in Leh should be set up as it can solve a lot of telecommunication
issues. Government should take lead in solving some of the financial issues
that have cropped up of late.
Optical fiber connectivity needs to be installed for telephone lines.
Once optical fiber cable are laid:
Separate dedicated lines for internet traffic;
Separate communication lines for Armed forces.
• The Hill Council should foster joint-ventures between outside contractors and
those from Ladakh so as to ensure that Ladakhis first gain experience.

8 Media and Communication


Unique culture and geography;
Scenic beauty.


Start of a Ladakhi newspaper;
Employment avenues in the fields of video and audio direction, editing and
production;
Reporting and journalism, for local and outside newspapers;
Marketing of the existing Ladakh magazines outside Ladakh;
Publication and marketing of new books, magazines and journals about
Ladakh culture and happenings;
Opportunities in local radio and television stations –technical & non-technical;
Website creation for the promotion of old and new ideas in all the
abovementioned areas.

8.3 Gaps Identified

Lack of requisite skill sets and technical expertise in areas of media
production, marketing;
Capital-intensive infrastructure;
Limited viewer-ship in Ladakh due to the small population;
Reducing interest in Ladakhi culture due to percolation of Indian and western
media thorough the region;
Power infrastructure non-reliable.

11


Publishing and marketing Ladakh culture-centric books, information material
like CDs;
Targeting the vast tourist and foreign market with Ladakhi culture-based
movies and documentaries;
Publishing a Ladakhi newspaper (daily or weekly);
Encouraging shooting of movies and documentaries by Indian and foreign film
makers in Ladakh;
Developing a comprehensive website on Ladakh and linking up Ladakhi
businesses, tour operators with Indian and foreign tourists and business
people.


Setting up a Polytechnic/Media Institute for imparting technical skills;
Encouraging and mediating for more Ladakhi airtime on state and national
television;
Linking up with foreign and Indian film-making agencies and studios for
shooting movies on location in Ladakh.

9 Health & Biotechnology


Ladakh is one of the few remaining Himalayan areas where the Tibetan
system of medicine remains undisturbed. It is available in its purest form there.
The cold deserts of Ladakh provide the perfect weather for the cultivation of
medicinal herbs and medicines, thereby making it a rich source for medicinal
products.


Medicinal Plants and Herbs: Selling of the medical plants and herbs in their
raw form or after processing to the firms like Dabur, Himalayas etc. outside
Ladakh. The same can go to the various Tibetan medical centres located
around the world.
Amchi Medical System: Promote the Amchi medical system outside Ladakh
and create the means for people to come to Ladakh and obtain treatment for
chronic illness.
Health Tourism: The Amchi techniques of Panchkarma therapy and the
presence of hot springs to provide hydrotherapy can be utilised to provide
health tourism.
Ladakh Health System in Biotechnology: Ladakh’s Amchis have a wide
knowledge about the plant species and the same can be used to develop new
medicines for curing chronic diseases.

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9.3 Gaps Identified

Conservation and Cultivation of Herbs: Preservation and cultivation of
herbs is essential for the conservation of the traditional Amchi system.
Increase in Awareness among Students: Students should be made aware
of the medicinal value of the plants as they are the ones who will become the
next decision makers
Commercialisation of Products: The raw materials for the medicines should
be sold commercially instead of just producing for the purpose of local
consumption by Amchis.
Recognition of the Amchi Practice: The importance of the Amchi system as
a cure of chronic diseases could be used by the Amchis as a platform to
appeal to the government to register the medicine under the Medicine Act.
Institutionalisation of the Amchi Medicine System: A proper College
should be established for the learning of Amchi medicine and a degree should
be provided. No one should be allowed to practice Amchi without holding that
degree.
Commercialisation of Medicinal Baths as Health Spas (Health Tourism):
A lot of potential lies in the medicinal baths offered by the practice so as to
promote it as health tourism (as is done by Kerala).


Commercialisation of the Amchi Medical System: The objective of this
approach is to make Amchi medical system known outside Ladakh so that
people come to Ladakh for treatment and hence help to generate income for
the Amchis.
Emphasis on Health Tourism: The objective would be to develop health
centres near regions like Panamic Valley or Chumathang region to provide oil
massages and hydrotherapy treatments.


Recognition: Amchi Sabha needs help from the Hill Council to help them
achieve recognition for the Amchi Medical System.
Control on Smuggling: Government regulations should be strictly
implemented to protect smuggling of medicinal herbs outside Ladakh.
Budget Allocation: At least 10% of the total health budget needs to be
provided to the Amchi system if it is to develop in Ladakh.

10 Non-Conventional Energy Sources


Climatic Conditions: Ladakh region has been blessed with 300 days of bright
sunshine per year. This is ideal for solar power generation.

13

Geography: Ladakh region has numerous streams that are waiting to be
tapped for huge hydro potential. The mountainous and steep lie of the land are
ideal for micro-hydel projects
Demographics: Ladakh region has a peculiar spread of villages and
population. Besides, the difficult terrain of the region has made it very difficult
to have any kind of grid in the region, at least in the next ten years. This itself
is a blessing in disguise for the region as it opens up the door for
decentralised generation and consumption of electricity, the very concept of
use of non-conventional energy sources.
Government Policy: The Ministry of Non-Conventional Energy Sources
(MNES) provides up to 50% subsidy for the capital investment in the non-
conventional energy sources sector.


Consultancy Services for Micro-Hydro projects.
o Site surveys, consultancy and design services;
o Environmental impact assessments;
o Project management systems.
Private Generation: Operating the micro-hydro on the Build-Operate-Transfer
model.
Distribution & Franchising: Opening up of franchise outlets that stock solar
products from reputed firms like TATA BP SOLAR, REIL, CEL, etc.
Consultancy Services for Solar Power projects: Opening up project
management and consultancy specialising in the design and use of solar
energy, especially for solar power plants and other solar applications like solar
pumps, solar water heater, etc.
Maintenance: Opening up maintenance service outlets for solar products like
solar home/street lighting system, solar cookers, etc.

10.3 Gaps Identified

Skill gap: Lack of skilled manpower and requisite techno-managerial skills
amongst Ladakhis.
Risk Management: High risks are associated with micro-hydro projects, as
there are big maintenance issues involved. Besides, from the little experience
in the region and elsewhere in the country, people do not like to pay money for
the power they use, rendering some projects uneconomical in nature.
Maintenance: There are no manufacturing and fabrication facilities in the
region and therefore maintenance becomes a big issue. To add to that, the
region is cut off from the rest of the world during 6-7 months per year.


Training & Technical Education: Providing courses in the field of non-
conventional energy sources at the Industrial Training Institute (ITI), Leh.
Removal/Reduction of Subsidies: Reducing the subsidy on diesel to enable the
growth in the field of non-conventional energy sources. It will also save money
for the government and help in reducing the pollution in the region.

14

11 Solid Waste Management & Recycling


Traditional Methods: The traditional method of composting organic waste is
still being widely followed. The method is not only environmentally-friendly but
also produces useful manure which is then used in the fields.
Small Population, Small Scale of Problem: The population of Ladakh is
small and widely dispersed. The amount of waste produced (22.5 tons/day) is
miniscule when compared to other cities of India. As the problem of managing
waste is still in its infancy, proper strategies should be framed to handle the
increased waste that is going to be generated in future.
Civil Intervention: Many NGO’s are involved in waste management.
Government has also banned polythene usage in Leh. A new Green tax has
also been introduced recently.


Recycling plants: Entrepreneurs could open recycling plants for recycling
paper, bottles and plastics. The bottles could be used by the self-help groups
for selling their home made jams and jellies, and would cost substantially less
than the bottles brought from the plains. Recycled plastic could be used as a
good insulating material.
Recycling Organic waste: The industry is highly fragmented. There is
enough scope for an entrepreneur to provide a single unified facility to collect
and process waste from various sites to convert it to manure. S/he may also
provide some value-added services like assisting toilet design etc.
Public toilets: At present there are very few public toilets in Leh. An
entrepreneur could construct a toilet on the lines of “Sulabh Sauchalaya” and
charge a small sum for using it.


Fragmented Efforts: There is no single organisation that is vertically
integrated through all the activities of waste management (collection, transport
and disposal). There are only sporadic efforts by a few organisations, but none
have been sustainable on a long-term basis.
Modernisation: Traditional systems of managing waste are giving way to
modern systems, which do not currently produce biodegradable waste.
Skewed Generation of Waste: The generation of waste is highly skewed
towards the tourist season. Four months of tourist season produces almost 3-4
times the waste that is produced in the non-tourist season.
Lack of Infrastructure: There is no proper drainage system in the city.


The main focus area of focus should be setting up of recycling plants. It is
highly cost-prohibitive to send the waste materials to the plains or to
Jammu for recycling and then bringing them back. So the government

15

should provide assistance to budding entrepreneurs to develop recycling
units in Leh and elsewhere. This would not only solve the problem of waste
in the region, but also provide enough drive to the other economies of the
region by providing them cheap raw materials. It would also employ a
substantial number of people.


Finance: Mobilise loans for setting up of a recycling plant for paper, bottles
and plastics. Develop a recycling park where all these recycling facilities
would be centrally located and share resources to bring down the
operating costs.
Litter-free Zones: Declare specific zones which are highly frequented by
tourists as litter-free zones
Policy Changes: Change the no-dustbins policy to providing dustbins at
strategic locations and clearing them frequently.
Competition: Ensure competition among the villages by declaring the
‘best-maintained village’ every quarter and ensuring mass publicity.

12 Building Design & Construction

12.1 Comparative Advantage of the Region

Technology: Availability of highly developed and efficient building design and
construction technologies that have percolated through the region.
Awareness: High levels of awareness in far flung areas of the need for
energy efficient construction.
Highly skilled labour: A strong tradition of skilled labour is available.
Material: Most of the material that is needed for construction is locally
available.


Architecture and Design of Buildings
Building Contracts including contracts for carpentry, plumbing, electrical
installations, maintenance and repair;
Procurement and Supply of building materials such as stone, mud bricks,
wood, sand, cement, steel, paint, insulation etc.
Retrofitting of existing buildings using solar principles – incorporation of
trombe walls, double-glazed glass windows and greenhouses.


Limited Activity: The construction market is booming in Ladakh, but it is
restricted to only Leh town. Leh town has reached its limits. Though other sites
for Model Township have been identified by the Hill Council, it is not being
pursued.
Lack of Regulation: Ladakh region has a unique climate that requires use of
solar passive design in its construction, but many of the government and new

16

buildings being constructed do not follow these principles as there is an
absence of any kind of enforcement.


Passive solar architecture;
Retrofitting of non-solar buildings;
Expansion of solar applications to all residential commercial/educational/
governmental buildings in Leh;
Developing a Building Code;
Encouraging usage of local materials and reducing usage of concrete.


Set up an ‘Institute of Building Design & Construction’ in Leh.
Develop strict ‘Building Codes and Regulations’ for all new buildings. This
should incorporate and enumerate building design code, material code,
passive solar design code, energy efficiency and conservation code etc..
Provision of up to 50% subsidy for retrofitting of existing buildings to
incorporate solar principles.

13 Microfinance


Relatively new to the concept of formal savings and hence open to new ideas
and opportunities.
Development in other areas such as agriculture, handlooms, handicrafts etc.
will encourage people to borrow money to finance their activities.


Setting up non-banking financial companies;
Commission agents.


Linkage of Banks and Self-help Groups (SHGs) is still a major issue in the
region. The banks still do not have any particular scheme for SHGs. The
financing activities of the banks in the region are mostly confined to
central/state sponsored schemes/programmes and limited to non-farm sector
activities.


Mobilising savings;
Encouraging formation of SHGs;
Encouraging banks to extend micro-credit to the people.

17


Identification of new businesses that mingle well with the present social and
cultural structure of Ladakh.
Introducing competition between the banks so as to compel them to devise
new ways to pump more money into the Ladakhi economy. The three existing
banks have made low targets for themselves and have over-achieved them.
Introduction of Credit Guaranteeing Commission Agents, which would
guarantee the repayment of loans to banks.
Encouraging private entrepreneurs to establish non-banking financial
companies.
Considering the high per capita income and savings of the region, other
private and public banks could be invited to start their mini-
branches/extension counters in Ladakh in the initial phases.

14 Role of the Public Sector
It is not the role of the public sector to participate in any of the businesses mentioned
above. Government should facilitate enterprise and economic activity while ensuring
that the law is respected, notably in relation to health, safety and environmental
standards. For the ‘Vision’ to be successful, the public sector needs to create an
environment in which private enterprise can thrive. The key actions mentioned below
are directed towards basic physical and social infrastructure.

14.1 Education

For any enterprise to succeed, the core requirement is an educated workforce.
While literacy levels in Ladakh are better than in most other parts of India, the
quality of education is poor. There is no Engineering or Management College
in the region. The only source of technical education is the Industrial Training
Institute, Leh.
The concentration of existing schools and colleges is in Leh - the distribution
needs to be balanced throughout the region.
The course contents of the schools and colleges need to be upgraded

14.2 Physical Infrastructure

Ladakh region needs connectivity with the rest of India for the whole of the
year. The Hill Council, in conjunction with State and Central Government,
needs to continue working on this.
The Hill Council should continue to push for getting the Power Grid to the
region. Meanwhile, the government needs to establish a grid within Ladakh
itself.

14.3 Law Enforcement

The region is heavily subsidised. This is a major reason why there is a lack of
competition in the region. So the subsidies need to be phased out.

18

There is no law recommending the use of solar energy in the building and
construction industry and so the Hill Council should formulate and enact a law
in this direction.
With the increasing number of tourists and the changing lifestyles of Ladakhis,
an increasing amount of waste is being generated in the region. The Hill
Council needs to devise strict laws for curbing pollution in the region.

14.5 Certification Agency

The Hill Council should work with Field Research Laboratory (FRL) to
establish a Certification Agency in the region, especially for organic farming.

15 Concluding Remarks
The role of the government should be that of ‘facilitator and enabler’. Government
should foster the process of wealth-creation by and for the people of Ladakh.
Government’s job is to create an enabling environment that is conducive to
enterprise and to people seizing the opportunities detailed in this Discussion Paper
and the associated Working Papers.

Keeping in view the eco-system, no major corporate investment is suggested, and
measures should be taken to encourage the use of solar energy and minimise diesel
usage.

The emphasis must be on the participation of civil society in the development of this
region. Public-Private Partnership promotion is a key to achieving sustainability, and
hence it is essential that all the above 11 sectors involve major partnerships with
government providing a conducive environment.

19

Annex 1

Abbreviations

AMC Annual Maintenance Contracts
APEDA Agricultural & Processed Food Products Export Development Authority
BPO Business Process Outsourcing
BSNL Bharat Sanchar Nigam Limited
CFTRI Central Food Technological Research Institute
CIC Community Information Center
CII Confederation of Indian Industry
DG Diesel Generators
DIC District Industries Center
DOEACC Department of Electronics Accreditation of Computer Courses
DRDO Defence Research and Development Organization
EU European Union
FICCI Federation of Indian Chambers of Commerce & Industry
FRL Field Research Laboratory
ICT Information and Communication Technology
INR Indian Rupee
IT Information Technology
LAHDC Ladakh Autonomous Hill Development Council
LAMB Ladakh Agribusiness & Marketing Board
LAN Local Area Network
MNC Multi-national Companies
NASSCOM National Association of Software Services and Companies
NGO Non Governmental Organisation
NIC National Information Center
OFC Optical Fibre Cables
PCM Pulse Code Modulation
SPJIMR SP Jain Instt. Of Management and Research, Mumbai
STPI Software Technology Park of India
TDM Telecom District Manager
TISS Tata Institute of Social Sciences, Mumbai
WAN Wide Area Network
WLL Wireless Local Loop

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