RURAL

ENTREPRENEURSHIP
 Heart of India
• Mahatma Gandhi once said, heart of India lies in
villages, if heart will be strong and healthy naturally
whole body will be strong.
 Rural Entrepreneurship

• Rural entrepreneurship is defined as

entrepreneurship whose roots lie in the rural
areas but has a lot of potential to drive various
endeavors in business, industry, agriculture,
etc. and contribute to the economic
development of the country. India is a country
of villages.

• Rural entrepreneurship is synonymous of rural

industrialization.

• Rural entrepreneurship is now a days a

major opportunity for the people who
migrate from rural areas or semi - urban
areas to Urban areas.
 Why Rural Entrepreneurship?
• It provide employment to millions of unemployed rural youth.
• Migration of rural youth to urban areas in desperate search of jobs, if
rural entrepreneurship will be their it will help to stop migration.
• Large number of products and services available in rural areas.
• Can be leveraged by entrepreneurs to set-up new and small micro
enterprises.
• Rural entrepreneurship creates an avenue for rural educated youth to
promote it as a career.
• Rural industries/entrepreneurship help to improve the per capital
income of rural people thereby reduces the gaps and disparities in
income of rural and urban people.
 What is the role of Rural
Entrepreneurship in
India?
• Employment generation
• Fosters economic
development
• Earnings of foreign exchange
• Producers goods of
consumers’ choice
• Entrepreneurial development
• Reduces disparities in
income between rural and
urban areas.
 Opportunities and
challenges in the Indian
Rural Market
 Challenges in Indian Rural Market
Lack of Infrastructural Facilities

 The growth of rural entrepreneurs is not very healthy in spite of

efforts made by government due to lack of proper and adequate
infrastructural facilities.

Risk Element

 Rural entrepreneurs have less risk bearing capacity due to lack of

financial resources and external support.

Marketing Problems

 Rural entrepreneurs face severe competition of large sized

organizations and urban entrepreneurs.
 They incur the high cost of production due to high input cost.
 New ventures have limited financial resources and hence cannot
afford to spend more on sales promotion.
 Cont..
• These units are not having any standard brand name under
which they can sell their products.

• The literacy rate among the Problems Faced by Rural

Entrepreneurs and Remedies to Solve it rural consumer is very
low.

• Printed media have limited scope in the rural context. The

traditionally bounded nature, cultural backwardness and cultural
barriers add to the difficulty of communication.
 Cont.….
• People in rural areas mostly
communicate in their local
dialects and English and Hindi
are not understood by many
people.
• The producers are not collective
in their approach for marketing
their products because they are
too widely scattered and
uneducated.
• Poor quality raw material and
other inputs.
• Lack of storage and warehousing
facilities.
 Opportunities in Indian Rural Market

• Low establishment cost : When compared to the urban areas, rural

entrepreneurs’ business establishment cost is very low. There is no need to
construct or facilities huge infrastructure and buildings.

• Competitive advantages / Availability of labor : In India seventy percent of

the people are living in the village. Majority of the rural people are depending
on the agriculture. The agriculture work is not available throughout the year.
That is the reason why rural entrepreneurs have the competitive advantage in
easily acquiring unskilled and semiskilled labor.

• Government policies and subsidies: The government of India is continuously

monitoring and introducing the new policies for encouraging the rural
entrepreneurship. These policies are very flexible, innovative, liberalized
and giving continues support to rural entrepreneurs. At the same time
government has also announced huge subsidies for promoting the rural
entrepreneurship.
 Cont.….
• Availability of raw materials: Most of the times the rural entrepreneurs
are depending upon the farm based products as raw materials, which are
available through-out the year. These raw materials are available in the
rural area that is the reason there is no transportation cost and flotation cost.

• Cost of production: Rural entrepreneurs cost of production is very low

when compared to the urban industries. The factors of production are
available with low cost, automatically the cost of production is also low.
Because of this rural entrepreneurs can sell their goods and services with
cheaper cost.

• Employment generation for rural youth: Rural entrepreneurs are

providing hundred percent jobs for rural youth. If the rural entrepreneurs
are succeeding in this activity the migration of the people to urban from
rural will be immediately stopped to a maximum extent.
 Cont.….
• Promotion cost: There is no promotion cost for rural entrepreneurs; in fact
the competition is very less. Particularly there is no need for advertising
and other promotional activities for their products.

• Potential customer: In this century rural villagers are economically strong

and also heavily populated. This heavy population can be converted as
potential customers. That is the reason all the MNC’s are concentrated in
rural villages for their potentiality.
 Types of Rural Industries:

• Agro Based Industries: like sugar industries, ,oil

processing from oil seeds, pickles, fruit juice, spices,
diary products etc.
• Forest Based Industries: like wood products, bamboo
products, honey, coir industry, making eating plates from
leaves.
• Mineral based industry: like stone crushing, cement
industries, wall coating powders etc.
• Textile Industry: like spinning, weaving, colouring,
bleaching.
• Engineering and Services: like agriculture equipments,
tractors and pump sets repairs etc.
How to develop Rural Entrepreneurship

• Strengthen the raw material base in rural areas.

• Funds should be available on time at soft terms
and less conditions.
• Develop entrepreneurial competencies through
trainings.
• Dissimilate information about the available
facilities.
• Imparting entrepreneurial education at the schools,
colleges and Universities may be one of the effective
ways to inculcate the entrepreneurial attitude among
the prospective entrepreneurs in rural areas of the
country.

• Modern infrastructural facilities.

• Disseminating information about various facilities

available for prospective entrepreneurs to set up
industries in rural areas.

• The NGOs should be encouraged to contribute to

development of rural industries in the country.
 Best Rural Entrepreneurs
• PC Mustafa- From selling 100 packets a day to catering across various
cities in India and now expanding in Dubai, ID Fresh is now a 100 Cr
company producing 50,000 packets a day with 1,100 employees.

• Jyothi Reddy-Determined to succeed, she decided to study further and

obtained a BA from a renowned university and started working as a teacher
making decent money. But her passion to reach to the top took her to
United States, where she after switching tons of job, started her own
consulting company Keys Software Solutions Inc. (KEYYS).
 Conti…
• Mansukhbhai Jagani developed a motorcycle-based tractor for India’s poor farmers, which is
both cost effective.

• Mansukhbhai Patel- A farmer, invented a cotton stripping machine that has significantly cut
the cost of cotton farming and revolutionized India’s cotton industry. Patel who studied up to
Class X, invented a cotton-stripping machine in 1991. His machine helps in removing cotton
from semi opened and unopened shells of various cotton varieties. The machine has won a U.S.
patent.

• Mansukhbhai Prajapati, a potter, invented a clay non-stick pan that costs 100 and a clay
refrigerator that runs without electricity for those who cannot afford a fridge or their electricity
and maintenance costs.

• Dadaji Ramaji Khobragade, who invented the HMT rice, a highly successful rice variety which
yielded 80 percent more rice than the conventional variety.

• Madanlal Kumawat, a grassroots innovator with no more than a fourth-grade education,

developed a fuel-efficient, multi-crop thresher that yields cleaner grains, which can be bagged
directly and eliminates the cost of cleaning.
 5 Rural Indian Women Entrepreneurs Changing the
Picture of India

• Ela Bhatt-Self Employed Women Association (SEWA) founded by Ela

along with late Arvind Buch, the then president of Textile Labor
Association, is a major role player in empowering employment among
rural women in Bihar.

• Thinlas Chorol-Born and brought up in the beautiful valleys of Ladakh,

Thinlas is the only Ladakhi woman to be professionally trained in the field
of Mountaineering. Thinlas studied in SEMCOL, The Students'
Educational and Cultural Movement of Ladakh.

• Shri Mahila Griha Udyog Lijjat Papad- The association founded by

seven Gujrati housewives is well known for its products launched with the
brand name Lijjat. It employs more than 40,000 women and encourages
self employment through a number of branches across the country.
 Cont.…
• Annie George- Her organization helps build disaster-resilient,
sustainable coastal communities. Disaster management,
Participatory Water Resource Management, and Coastal
Vulnerability Mapping are some of the key areas of operations
of BEDROC.
• Chetna Gala Sinha- Founder of Mann Deshi Mahila Sahakari
Bank.
• Chetna’s foundation established in 1994 governs a regulated
co-operative bank that is completely operated by women and
serves women customers.
 Government Schemes
• M-SIPS – The Modified Special Incentive Package Scheme provides capital
subsidies to manufacturing and electronic units in sectors of technology
hardware, IoT, automotive, renewable and non-renewable energy sources,
nanotechnology, green technology, and aerospace and defense industries.
Under this scheme, there’s a provision for 20% capital subsidy in SEZ, and
25% in non-SEZ, for business units in manufacturing and electronics.

• AIC – Headed by the Atal Innovation Mission, the Atal Incubation Centers
provide grant-in-aid of Rs.10 Cr to every AIC. The duration of the grant is a
maximum of 5 years. Set up under the NITI Aayog, the purpose of AICs will
be to provide financial aid and infrastructure assistance to different startups
in sectors like chemicals, technology hardware, healthcare & life sciences,
aeronautics/aerospace & defense, agriculture
 Cont.….
• MUDRA – The Micro Units Development and Refinance Agency or
MUDRA, is a flagship program by the government of India to provide funds
to micro and small enterprises.

• NABARD – The National Bank for Agriculture And Rural Development, or

NABARD, for short, is primarily aimed towards providing credit benefits to
agriculture as well as other cottage and village industries.

• Credit Guarantee Scheme – The CGTMSE (Credit Guarantee Fund Trust for
Micro and Small Enterprises) was set up by the Government of India to
provide business loans to micro and small industries, with zero collateral.

• NewGen IEDC – Introduced last year, the NewGen Innovation and

Entrepreneurship Development Centre is applicable to industries like
healthcare services, chemicals, hardware, aeronautical/defense, IT, AR/VR,
construction, design, food and beverages, textiles, nanotechnology, and
renewable and non-renewable energy sources etc.
 Cont.…
• SMILE – The SIDBI Make in India Soft Loan Fund for
Micro, Small, and Medium Enterprises provides soft loans to
MSME units at reasonable terms, to meet the debt-equity ratio
of a unit or to help in its growth and expansion.

• Loan for Rooftop Solar PV Power Projects – Headed by the

Indian Renewable Energy Development Agency (IREDA), this
scheme promotes renewable energy development by providing
support for solar PV projects on rooftops.
 Rural Entrepreneurship in 2019
Budget

• Scheme of Fund for Upgradation and Regeneration of

Traditional Industries -A majority of mills and factories
pertaining to agro products are established in rural part of
India. To help them renovate and expand their business,
Sitharaman announced the ‘Scheme of Fund for Upgradation
and Regeneration of Traditional Industries’ (SFURTI) which
aims to set up more Common Facility Centers (CFCs) to
facilitate cluster-based development to make the traditional
industries more productive, profitable and capable for
generating sustained employment opportunities.
 Cont.….
• Under SFURTI, the focus will be on bamboo, honey and khadi
clusters. According to Budget 2019, the SFURTI envisions setting
up 100 new clusters during 2019-20 which should enable 50,000
artisans to join the economic value chain.

• To improve the technology, the Scheme for Promotion of

Innovation, Rural Industry and Entrepreneurship’ (ASPIRE) has
been consolidated for setting up of Livelihood Business Incubators
(LBIs) and Technology Business Incubators (TBIs). The Scheme
contemplates to set up 80 Livelihood Business Incubators (LBIs)
and 20 Technology Business Incubators (TBIs) in 2019-20 to
develop 75K skilled entrepreneurs in agro-rural industry sectors.

• Wants to build a startup ecosystem in every district and every

village in order to enable 50K new startups by 2024.