PROJECT TITLE : RURAL ENTREPRENEURSHIP AND ITS IMPACT ON

ECONOMIC DEVELOPMENT

A project submitted in partial fulfilment of the requirements for the

Degree of
Bachelor of Commerce
By

Sourav Pal
University Roll No: 201605493118
College Roll No: BCFIN19635
Section: ‘B’
Registration No: KU1920634
Session: 2019-22

Under The Supervision of

Dr. G. Vijayalakshmi

Faculty of Commerce

Karim City College, Jamshedpur

Jamshedpur-831001
831001

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 Faculty Of Commerce
Karim City College, Jamshedpur
CERTIFICATE OF APPRO
APPROVAL
VAL OF PROJECT
The foregoing project report entitled “RURAL ENTREPRENEURSHIP AND
ITS IMPACT ON ECONOMIC DEVELOPMENT” is hereby approved as a
creditable study of the project topic and has been presented in a satisfactory manner
to warrant its acceptance as a prerequisite to the degree to which it has been
submitted.
It is understood that by this approval, the undersigned does not necessarily endorse
any conclusion drawn or opinion expressed therein but approved the project report
for the purpose for which it is submitted.

Signature of Supervisor Signature of External Examiner

Dr. G. Vijayalakshmi

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 ACKNOWLEDGEMENT

I express my deep sense of gratitude and indebtedness to my project supervisor

Dr.G.Vijayalaxmi for providing precious guidance, inspiring discussions, and constant
supervision throughout the course of this work. His timely help, constructive criticism and
conscientious efforts made it possible to present the work contained in this project. I am
also thankful to our HOD Dr.Md.Moazzam Nazri for his constant guidance, scholarly
supervision, stimulating discussion, suggestions and encouragement.

My sincere thanks to all faculty members of Commerce who helped directly or indirectly in
the completion of this project.

I am also thankful to our Honourable Principal Dr.Mohammad Reyaz for his inspiration and
providing support in the process of completion of this project.

Last but not least I feel pleasure and privileged to fulfil my parents’ ambition and I am
greatly indebted to them for bearing the inconvenience during my B. Com Course.

Name Of The Student: Sourav Pal

University Roll No: 201605493118
Registration No: KU1920634
College Roll No: BCFIN19635 Signature Of The Student
Section: ‘B’

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 CONTENTS
S.NO Particular Page no
1 List Of Abbreviation 5
2 Abstract 8-9
Objective Of The Study 10
Research Method 10
Finding 11-13
4 Chapter 1 : Introduction 14-16
1.1 Introduction about Rural Entrepreneurship 16-17
1.2 Definition of Rural Entrepreneurship 17-18
1 1.3 Background Of Rural Entrepreneurship 18-25
5 Chapter 2: Literature Review 26-27
2.1 Types Of Rural Entrepreneurship 27-28
2.2 Importance Of Rural Entrepreneurship 29-30
2.3 Problems Of Rural Entrepreneurship 30-31
6 Data Collection 32-33
7 Data Analysis and Data interpretation 34-36
8 Conclusion and Recommendation 37-40
9 Reference 41

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 List Of Abbreviations

MCED Maharashtra Centre For

Entrepreneurship Development
EDP Electronic Data Processing
OBC Other Backward Class
SC Scheduled Cast
ST Scheduled Tribes
DIC Disseminated Intravascular
Coagulation
MITCON Maharashtra Industrial And Technical
Consultancy Organisation Limited
OECD Organisation For Economic
Cooperation And Development
SFURTI Scheme Of Funds For Regeneration Of
Traditional Industries
MSME Ministry Of Micro, Small And Medium
Enterprises

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 List Of Tables

S.no. DESCRIPTION PAGE

NO.
1. FINDINGS 10-12
2. 3.1 PRODUCTIOH AND SALES OF VILLAGE 32-33
INDUSTIES PRODUCT
3 3.2 EMPLOYEMENT UNDER VILLAGE 34-36
INDUSTRIES

List Of Figures
S. no Descriptions Page no
1 Introduction 16-17
2 Literature Review 26-27
3 Data Analysis And Data 34-36
Interpretation

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 RURAL
ENTREPRENEURSHIP
AND ITS
IMPACT ON
ECONOMIC
DEVELOPMENT

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 Abstract
India lives in its villages, nearly 73 % of the total population live in rural areas where
agriculture and allied activities are the main stay of their lives. The economic development
of our country largely depends on the development of rural areas and the standard of living
of its rural mass. Rural entrepreneur is one of the most important inputs in the economic
development of a country and of regions within the country. Rural entrepreneur uses the
scarce resources in the most efficient manner thereby increasing profits and decreasing
costs. Due to lack of education, majority of rural people are unaware of technological
development, marketing etc. Shortage of finance and raw materials are main problems face
by rural entrepreneurs.
Most of the rural entrepreneurs face peculiar problems like illiteracy, fear of risk, lack of
training and experience, limited purchasing power and competition from urban
entrepreneurs. Promotion of rural entrepreneurship is a key to develop rural areas and
backward towns. This paper focuses on the identification of various problems associated
with rural entrepreneurship. Suitable cures have also been discussed to overcome these
problems.
Entrepreneurship is an important driver of economic growth, productivity, innovation, and
job creation, and as a key aspect of economic dynamism. Rural entrepreneurship is
generally defined as “entrepreneurship emerging at village level which can take place in a
variety of fields of endeavor such as business, industry, agriculture and acts as a potent
factor for economic development.
MCED helps development of entrepreneurship among rural population. Training in Jalgaon
district was studied. In the year 2015-16, out of total 171 participants in the six
programmes, 131 women) and 40 men benefitted from EDP. Maximum participants (74)
were 10th pass, followed by 12th pass (72). Majority participants were OBC (93), followed
by ST (42) and SC (39).11 participants were from general category. It empowers those
sections of society who were traditionally denied equal opportunities. Overall feedback is
very positive.
 PROBLEMS OF RURAL ENTREPRENEURSHIP
Rural Entrepreneurs are playing very important role in the development of economy. They
face various problems in day to day work. Every business has its own kind of problems.
Some of the major problems faced by rural entrepreneurs are as under.

 Financial problems

1. Scarcity of funds: Most of the rural entrepreneurs are not getting enough
financial support.
2. Lack of infrastructural facilities: The growth of rural entrepreneurs is
inhibited due to scarcity of infrastructural facility

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 Marketing problems

1. Competition: Rural entrepreneurs face severe competition from large

sized organisations. New venture are not getting enough facilities
2. Middlemen: Rural entrepreneurs are mostly depending on middleman
for the marketing of their goods. They causes various problems

 Management problems

1. Lack of Knowledge of information technology: Information

technology is not very common in rural areas.
2. Legal formalities: Rural Entrepreneurs find very difficulty in gaining
license due to lack of legal knowledge
3. Procurement of raw materials: Procurement of raw materials is really
a tough task for rural entrepreneur. They may end up with poor
quality raw materials, may also face the problem of storage and
warehousing.

 Lack of technical knowledge

Rural entrepreneurs suffer a severe problem due to lack of training facilities

and extension services.

 Lack of infrastructural facilities

Rural areas are characterized by poor infrastructural facilities, roads, water,

market, electricity, street lighting, road transport, storage and
communication etc. which hamper the smooth movement of various
industrial activities.

 Non availability of skilled labours

In rural areas, skilled labours cannot be found easily by the entrepreneurs.

Highly skilled personnel prefer to work in big cities due to high salary than
rural areas.

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  OBJECTIVES OF THE STUDY :

The objectives of the present study are:

 To know the various types of rural entrepreneurship.

 To analyse the performance of rural industries.

 To know the importance of rural entrepreneurship.

 To study the problems of rural entrepreneurship.

 RESEARCH METHODS:

The present study is based on secondary data in analytical nature. Statistical and
mathematical tools such as simple growth rate and percentages are used. The
sources of data are Annual Reports of Ministry of Micro Small and Medium
Enterprises, Udyog Bhavan, New Delhi.

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FINDINGS:
Table no 1:

NO. PROGRAMME LOCATION DISTRICT DURATION PARTIC

DESCRIPTION IPAINTS

1. BANANA RAVER Raver 2/11/2015 to 30

8/12/2015
PROCESSING

2. FOOD AND JAMNER Jamner 3/11/2015 30

to9/12/2015
BAKERY

3. BAKERY/MILK AND BHUSAWAL Bhusawal 16/10/2015 30

to
FOOD 21/11/2015

PROCESSING

4. PREPAIRING NASHIRABAD Jalgaon 17/10/2015 25

to
ROPES 24/11/2015

5. READYMADE MUKTAINAGAR Muktainagar 19/10/2015 30

to
GARMENTS 17/12/2015

6. BANANA Yawal 26/10/2015 30

to 3/12/2015
PROCESSING

7. MILK PROCESSING BODWAD Bodwad 23/10/2015 30

to 1/12/2015

8. SILVER ARTICLE JALGAON Jalgaon 19/10/2015 30

to
MANUFACTURING 27/12/2015

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 Table no 2:

No. Programme Location District Duration Participants

Description
1 Paper product Erandol Erandol 5/11/2015 25
and Cloth bags
10/12/2015
2 Milk Processing Bhoras Chalisgaon 17/10/2015 30

2301/11/2015
3 Imitation jewelry andBhadgaon Bhadgaon 15/10/2015 30

Jardosi work 20/11/2015

4 Spice Pachora Pachora 19/11/2015 30
manufacturing
18/12/2015
5 Readymade Dharangaon Dharangaon 20/10/2015 30
Garments
23/12/2015 *
6 Satranji & Zorya Kasoda Erandol 17/11/2015 30

manufacturing 16/12/2015
7 Milk Processing Hated Chopda 17/11/2015 30

16/12/2015

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The criteria for selecting participants in the EDP was that participants should be from
Jalgaon district and they should not have been beneficiary of similar programme in
the past. Stipend of Rs 1000/- PM is paid to participants as incentive. It is a Non-
residential programme and candidates were selected through oral interviews.
Information about the training is shared through personnel contacts with villages.
Classroom teaching is supported with practicals and field visits are also arranged
during the training programme. Reading material and writing material is provided to
participants. Guidance to participants about loan schemes, project report and loan
proposal is provided by experts. Positive report by industries inspector about
conducting the training is received. Very positive feedback is given by participants
about training received by them. In the year 2015-16, District Industrial Center (DIC),
Jalgaon conducted Free Entrepreneurship Development Programme sponsored by
DIC, Jalgaon and organized by MITCON Self employment Center.

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 Chapter-1
INTRODUCTION

Entrepreneurship is the creation or extraction of economic value With this

definition, entrepreneurship is viewed as change, generally entailing risk beyond
what is normally encountered in starting a business, which may include other values
than simply economic ones.
An entrepreneur is an individual who creates and invests in one or more businesses,
bearing most of the risks and enjoying most of the rewards. The process of setting up
a business is known as entrepreneurship. The entrepreneur is commonly seen as an
innovator, a source of new ideas, goods, services, and business procedures.
More narrow definitions have described entrepreneurship as the process of
designing, launching and running a new business, which is often similar to a small
business, or as the "capacity and willingness to develop, organize and manage a
business venture along with any of its risks to make a profit. The people who create
these businesses are often referred to as entrepreneurs. While definitions of
entrepreneurship typically focus on the launching and running of businesses, due to
the high risks involved in launching a start-up, a significant proportion of start-up
businesses have to close due to "lack of funding, bad business decisions, government
policies, an economic crisis, lack of market demand, or a combination of all of these.
In the field of economics, the term entrepreneur is used for an entity which has the
ability to translate inventions or technologies into products and services. In this
sense, entrepreneurship describes activities on the part of both established firms and
new businesses.
Entrepreneurship is an act of being an entrepreneur, or the owner or manager of a
business enterprise who, by risk and initiative, attempts to make profit.
Entrepreneurs act as managers and oversee the launch and growth of an enterprise.
Entrepreneurship is the process by which either an individual or a team identifies a
business opportunity and acquires and deploys the necessary resources required for
its exploitation. Early-19th-century French economist Jean-Baptiste Say provided a
broad definition of entrepreneurship, saying that it shifts economic resources out of
an area of lower and into an area of higher productivity and greater yield.
Entrepreneurs create something new, something different—they change or
transmute values. Regardless of the firm size, big or small, they can take part in
entrepreneurship opportunities. The opportunity to become an entrepreneur
requires four criteria. First, there must be opportunities or situations to recombine
resources to generate profit. Second, entrepreneurship requires differences between
people, such as preferential access to certain individuals or the ability to recognize
information about opportunities. Third, taking on risk is a necessity. Fourth, the
entrepreneurial process requires the organization of people and resources.
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An entrepreneur uses their time, energy, and resources into creating value for
others. They are rewarded for this effort monetarily and therefore both the
consumer of the value created and the entrepreneur are benefitted.
The entrepreneur is a factor in and the study of entrepreneurship reaches back to
the work of Richard Cantillon and Adam Smith in the late 17th and early 18th
centuries. However, entrepreneurship was largely ignored theoretically until the late
19th and early 20th centuries and empirically until a profound resurgence in business
and economics since the late 1970s. In the 20th century, the understanding of
entrepreneurship owes much to the work of economist Joseph Schumpeter in the
1930s and other Austrian economists such as Carl Menger, Ludwig von
Mises and Friedrich von Hayek. According to Schumpeter, an entrepreneur is a
person who is willing and able to convert a new idea or invention into a
successful innovation. Entrepreneurship employs what Schumpeter called "the gale
of creative destruction" to replace in whole or in part inferior innovations across
markets and industries, simultaneously creating new products including new
business models. In this way, creative destruction is largely responsible for the
dynamism of industries and long-run economic growth. The supposition that
entrepreneurship leads to economic growth is an interpretation of the residual in
endogenous growth theory and as such is hotly debated in academic economics. An
alternative description posited by Israel Kirzner suggests that the majority of
innovations may be much more incremental improvements such as the replacement
of paper with plastic in the making of drinking straws.
The exploitation of entrepreneurial opportunities may include.
 Developing a business plan
 Hiring human resources
 Acquiring financial and material resources
 Providing leadership
 Being responsible for both the venture's success or failure
Economist Joseph Schumpeter (1883–1950) saw the role of the entrepreneur in the
economy as "creative destruction"—launching innovations that simultaneously
destroy old industries while ushering in new industries and approaches. For
Schumpeter, the changes and dynamic disequilibrium brought on by the innovating
entrepreneur were the norm of a healthy economy. While entrepreneurship is often
associated with new, small, for-profit start-ups, entrepreneurial behavior can be
seen in small-, medium- and large-sized firms, new and established firms and in for-
profit and not-for-profit organizations, including voluntary-sector groups, charitable
organizations and government.

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  Entrepreneurship may operate within an entrepreneurship ecosystem which
often includes:
 Government programs and services that promote entrepreneurship and
support entrepreneurs and start-ups
 Non-governmental organizations such as small-business associations and
organizations that offer advice and mentoring to entrepreneurs e.g. through
entrepreneurship centers or websites
 Small-business advocacy organizations that lobby governments for increased
support for entrepreneurship programs and more small business-friendly laws
and regulations
 Entrepreneurship resources and facilities e.g. business incubators and seed
accelerators
 Entrepreneurship education and training programs offered by schools,
colleges and universities
 Financing (e.g. bank loans, venture capital financing, angel investing and
government and private foundation grants)
In the 2000s, usage of the term "entrepreneurship" expanded to include how and
why some individuals identify opportunities, evaluate them as viable, and then
decide to exploit them. The term has also been used to discuss how people might
use these opportunities to develop new products or services, launch new firms or
industries, and create wealth. The entrepreneurial process is uncertain because
opportunities can only be identified after they have been exploited.
Entrepreneurs exhibit positive biases towards finding new possibilities and seeing
unmet market needs, and a tendency towards risk-taking that makes them more
likely to exploit business opportunities.

1.1 Introduction about Rural Entreprenureship

After over seven decades of independence and industrialization in our country, still a
large population lives in rural areas. Rural regions face major issues in comparison to
other regions (Brown & Schafft, 2011), which are more serious in the peripheral
regions. According to OECD report 2005, rural areas are affected by major challenges
like unemployment or underemployment in primary industries, lack of infrastructure,
market, financial access, migration of young population to urban areas in search of
employment opportunities. The solution of these problems lies in the development
of rural areas with entrepreneurial development. Entrepreneurial activities
contributes to economic development with increased rural income, exercising

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multiplier effect by raising the demand for products and services resulting in growth
of employment opportunities. Demonetization has led to closure of many micro and
small enterprises, leaving millions of people unemployed. It has severe effects on the
poor section of the society especially small scale entrepreneurs& employees,
agriculturists, daily wage workers. This caused to migration of people back to rural
areas, creating additional burden on already unemployed rural sector. To overcome
these problems and support rural entrepreneurship development the government
has initiated new schemes besides the old ones. On July 5, 2019, the Finance
Minister presented Budget in Parliament focusing on reviving traditional industries
such as khadi bamboo etcetera through a cluster-based approach. A hundred new
clusters for traditional industries will be created in 2019-20.This will be done under
the Scheme of Fund for Regeneration of Traditional Industries (SFURTI), which
targets to organize such industries and artisans into clusters, making them
competitive, bolster up their longterm sustainability leading to increased
employment and marketability of products.

1.2 Definition of Rural Entrepreneurship

In simple words, we can say that rural entrepreneurship is any endeavor to organize
any business activity in rural area. It is defined as entrepreneurship emerging in rural
areas, which has capability to drive various attempts in primary, secondary and
tertiary sectors and acts as a potent factor for economic development.‟ Rural
entrepreneurship is that entrepreneurship that initiates in rural areas brings value
addition to rural resources engaging largely human resources of that particular area.
Thus, it is concluded that rural entrepreneurship must emerge in rural area, by any
person whether from rural or urban area, employing most of the material and people
from rural area, providing the benefits and development to that particular area,
ultimately leading to economic development of the country.

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 1.3 BACKGROUND OF ENTREPRENURSHIP

Entrepreneurship is defined as the process of starting a business. Today,

entrepreneurs are romanticized as being the cornerstones of a successful capitalist
economy.
But where did entrepreneurship begin? Who were the first entrepreneurs? In a
global economy dominated by big businesses, what does the future hold for
entrepreneurship?

Today, we’re going to tell you everything you need to know about the history of
entrepreneurship.

The Beginnings of Entrepreneurship and Trade

Believe it or not, the first entrepreneurs can be traced back to nearly 20,000 years
ago. The first known trading between humans took place in New Guinea around
17,000 BCE, where locals would exchange obsidian (a volcanic glass prized for its use
in hunting tools) for other needed goods – like tools, skins, and food.

This early type of entrepreneurship continued for millennia. Hunter-gatherer tribes

would trade goods from different parts of their respective regions to provide an
overall benefit for their tribe.

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 Entrepreneurship and the Agricultural Revolution

You probably already know the story about the Agricultural Revolution, but here’s a
brief refresher humans started to domesticate plants and animals. Instead of having
to roam, forage, and hunt for their food in different regions throughout the year,
human populations could remain stationary in one location and farm the land.
This was a fundamental shift in human history. Villages and towns started developing
close to fertile lands. There was no longer a need for everyone in the community to
be directly involved with food production. People didn’t need to spend all day
hunting and gathering for their own sustenance – it was more efficient to let a
smaller number of farmers handle food production while the rest of the population
focused on other tasks.

By specializing in different professions, members of the community could trade

valuable goods for food. These were the earliest entrepreneurs in human civilization.
Some common areas of specialization included:

 Hunting and gathering

 Fishing
 Cooking
 Tool-making
 Shelter-building
 Clothes-making
Farmers could grow more food than they needed to support their own families. Thus,
they would sell food at the market to say, a clothes-maker. The farmer’s family no
longer needed to make their own clothes. They could rely on the specialized services
within a community to provide for them.

Over time, these specialists became better and better at their unique areas of
specialization. Tricks of the trade would be passed down through families. The pace
of innovation sped up. As specialists became better and better at their unique roles,
they brought increased benefits for the entire community.

Towns and cities grew to include thousands of people. Dependable sources of food
encouraged people to build permanent settlements and homes. Different social
institutions arose around these permanent structures, including religious centers,
courts, and marketplaces. This provided new business opportunity for entrepreneurs
to explore.

As time went on, new areas of specialization began to emerge. Early entrepreneurs
would work in areas like:

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 Pottery
 Carpentry
 Wool-making
 Masonry
Standards of living continued to increase. Entrepreneurs were constantly at the
forefront of innovation. If a problem needed to be solved, these early entrepreneurs
recognized that they could profit by solving that problem.

The Expansion of Trade Routes from 2000 BCE Onward

Between the Agricultural Revolution and 2000 BCE, cities started to appear around
the world. Early areas of civilization were concentrated around rivers, particularly the
Nile, the Tigris and Euphrates, the Indus, and the Yellow and Yangtze.

By 3,000 BCE, cities in Sumeria (modern day Iraq) contained tens of thousands of
people. The city of Uruk, found on the banks of the Euphrates, was home to 50,000
people in the same amount of space that would have previously supported just one
tribe of hunter-gatherers.

As cities sprang up around the world, entrepreneurship took an important turn.

Entrepreneurs were still specializing in all of the areas listed above (pottery,
carpentry, tool-making, etc.). But they began to realize that profits could be made by
trading between cities and cultures.

 The right international trade route could make an entrepreneur very wealthy.
Some of the popular trade routes at the time included:
 Trading salt from Africa across the Roman Empire
 Trading technologies like Chinese paper-making around the world
 Trading rice from China across Asia
 Trading coffee, lemons, and oranges from Arabia into Europe
 Trading complex ideas like the Arabic number system into Europe (this occurred in
the year 1200 thanks to an Italian trader named Leonardo Fibonacci).
 Trading gunpowder (a combination of carbon, sulphur, and potassium nitrate)
from China to other parts of the world
Weapons trading was particularly important in these early times. Iron was
discovered around 2000 BCE, and the civilizations that controlled iron were able to
dominate other civilizations. This would lead to the world’s first empires, including
Alexander the Great’s Empire, the Han Chinese Empire, the Roman Empire, and the
Persian Empire.

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 Entrepreneurs that were able to trade military goods that created empires were
justifiably rewarded for their work. Thus, some of the most successful early
entrepreneurs traded the means of warfare around the world.

Of course, trade routes were about more than just raw resources and goods. They
were also about ideas and technologies. In this way, entrepreneurs were responsible
for spreading ideas around the world.

Entrepreneurship and the Invention of Money

One of the key developments in the history of entrepreneurship (and in human

history) was the invention of money.

Prior to the invention of money, all entrepreneurship and trade took place through
the barter system. If John wanted 5 bars of iron, then he might have to sell 1 horse to
get those bars. Of course, he would also need to find an iron merchant who needed a
horse.
The limits of the barter system were known as a “coincidence of wants.”
Understandably, this vastly limited trade and entrepreneurship in early history.

Currency changed all that. Some of the earliest forms of currency were found in
ancient Iraq in the forms of silver rings and silver bars. Starting in 2000 BCE, early
forms of money have been discovered. These forms of money were called specie and
changed widely throughout the world some cultures used seashells, for example,
while others used tobacco leaves, beads, or large round rocks.

Over time, paper money and coinage would be developed. Currency gave
entrepreneurs several important things:

 It facilitated long-distance trade

 It acted as a medium of exchange
 It provided a way for entrepreneurs to store value
Obviously, currency changed the fate of entrepreneurship forever.

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 Entrepreneurship and the Beginnings of the Marketplace in the
Medieval Period

Starting in the medieval period, markets became more and more popular. Larger
populations required larger marketplaces where they could purchase food, clothing,
services, and other important things.

The population spurt starting around 1470 solidified the market’s connection with
entrepreneurship. Here are some of the important developments that took place in
entrepreneurship during this period:

 Banking grew to new heights and complexities as small business owners had
greater financing needs.
 The guild system expanded, giving skilled craftsmen and other entrepreneurs a
way to organize their business together, regulate the quality of the goods
produced, and develop reputations for certain goods in towns across medieval
Europe.
 Entrepreneurs were able to purchase goods from abroad, turn those goods into
finished products, and then sell those goods for a profit at a wider scale than ever
before.

The Unexpected Stifling of Innovation

It wasn’t all good news for entrepreneurs during this period. Many entrepreneurs
had their inventions and innovations stifled.

Prior to the advance of merchants and explorers, many people frowned upon the
accumulation of capital. Innovation was often – perplexingly – blocked around the
world. There are even examples were visionary entrepreneurs had their inventions
stifled because they weren’t seen as beneficial for society.

Nevertheless, this period still gave rise to some of the world’s most influential
technologies, including the windmill, paper mill, mechanical clock, the map, and the
printing press, among many others.

It paved the way for future entrepreneurs to use innovation to capitalize on growing
trends.

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Mercantilism, Explorers, and the New World from 1550 to 1800

The period from 1550 to 1800 gave rise to the philosophy of mercantilism. Followers
of this philosophy believed that there was only a finite amount of wealth in the
world. A country’s wealth and value was solely based on how much treasure and
gold it could obtain, and how many more exports it could sell compared to imports.
Columbus’s “discovery” of the New World in 1492 would permanently change
entrepreneurship. Mercantilist ideals combined with a vast New World to discover
made early explorers some of the wealthiest entrepreneurs.
During this period, entrepreneurs were known more as merchants and explorers
than as entrepreneurs. These individuals would raise capital, take risks, and stimulate
economic growth (much like the entrepreneurs of today). Many see this period as
the beginnings of capitalism.

Some of the key advances of this period were related to the goods and materials
brought back from the new world. Silver imports from the New World, for example,
fuelled expanded trade across the Atlantic Ocean. Later on, gold would provide
similar motivation.

Another key advance in entrepreneurship during this period were Luca Pacioli’s
accounting advances. Pacioli created standardized principles for keeping track of a
firm’s accounts. These principles would later be used by the era’s explorers and
merchants.

Entrepreneurship in the 1800s Onward: Machines and Markets

Many people see the last 200 years of entrepreneurship as being fuelled by
“machines and markets”.

Capitalism became more entrenched in societies around the world. The theories of
capitalism were solidified in Adam Smith’s 1776 work An Inquiry into the Nature and
Causes of the Wealth of Nations, where he destroyed the idea of mercantilism.
Instead, he argued that self-interested was the driving force in societies around the
world.
Thus, entrepreneurs of this period were able to act in self-interest while still
improving society as a whole.
Thus, the competition of the marketplace regulates self-interest and leads to a type
of entrepreneurship that fuels innovation, improves the standard of living, and
increases the wealth of nations.

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The Industrial Age and Entrepreneurship

The Industrial Revolution marked yet another profound shift in the history of
entrepreneurship. Starting in the 18th century, entrepreneurship moved from small-
scale production in small towns to large-scale production in big cities.

Two things fuelled this fundamental change in entrepreneurship, including:

Availability of Energy Production: Businesses were no longer restricted by small-

scale energy powered by wind (which was weather-dependent) or falling water
(which was location-dependent). Instead, they could rely on technologies like
electricity, steam, the internal combustion engine, the locomotive, the automobile,
and oil. This gave them the means to make large-scale factories.
Availability of Labor: Huge populations began moving to Industrial Revolution cities
starting in the 1700s. This gave entrepreneurs a large pool of cheap labor with which
to work.
Eventually, these powerful market forces would give rise to some of the world’s
greatest entrepreneurs and innovators. America played a particularly prominent role
during this period, giving rise to entrepreneurs like Andrew Carnegie, J. Morgan, John
D. Rockefeller, Frank Kenan and Henry Ford.

Post World War II Entrepreneurship

After World War II, entrepreneurship began to change for a few different reasons.

First and most importantly, the economy was increasingly global and becoming more
global every decade. Better means of shipping and communication made it easy for
entrepreneurs to sell products and services to a global audience. Massive economies
like America could no longer afford to concentrate solely on selling products to
American marketplaces.

There were also microeconomic factors like the number of people owning cars.
Especially in America, car ownership made it more important to have highways
between major cities. As highways became more important, restaurants were
needed where people could eat while traveling.

This is the environment where entrepreneurs like Ray Kroc made their millions. Kroc
created a standardized restaurant that cut down on costs by serving a limited
number of men items. Then, he replicated that model.

Other companies that prospered during this period included General Electric, aircraft
companies like Lockheed, IBM, and Holiday Inns.

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Other countries around the world experienced similar boosts in growth following
World War II. Japan, for example, became one of the world’s largest economies by
exploiting a large population available for cheap wages. Germany experienced a
similar trajectory.

Modern Entrepreneurship

Today, entrepreneurs are the lifeblood of economies all over the world. Even in
command economies like China, entrepreneurs are valued for their contributions to
the economy and encouraged to innovate to compete with companies around the
world.

The global economy – combined with modern infrastructure and communications –

has introduced a new age of competition to the world of entrepreneurship. No
longer are you competing with entrepreneurs in your tribe, town, village, or city
you’re competing with entrepreneurs all over the world.

Many of these entrepreneurs can access cheaper means of production than you.
They may have better access to raw resources of cheap labor, for example. This has
made modern entrepreneurship more challenging – and arguably more rewarding –
than ever before.

Conclusion: Where Does Entrepreneurship Go from Here?

Since the beginnings of history, entrepreneurship has always been ruled by the
market forces known as supply and demand. Early entrepreneurs in the Agricultural
Revolution met the needs of farmers by providing them with tools and shelter. In
exchange, they received food that could feed their families.

As years went by, the means of entrepreneurship changed dramatically but the
core reasons for entrepreneurship remained the same. Everywhere in the world,
entrepreneurs arose to address demand by providing supply. They innovated and
invented new technologies to solve problems that nobody had ever solved before.
At the same time, competition has ensured that the entrepreneur’s self-interest
doesn’t cause an overall negative impact on society. Competition prevents
entrepreneurs from overcharging for goods or underpaying employees, for example.

These foundational structures of entrepreneurship aren’t going to change anytime

soon. For that reason, entrepreneurs will continue to have a special place in society
and will continue to be found at the forefront of innovation.

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 Chapter-2
Literature Review
The review of literature helps to understand the importance, background and
present situation related to the subject selected for the study. Therefore it is
necessary to review relevant and latest literature related to the subject matter. A
number of studies related to role of entrepreneurship in rural development have
been conducted. Here, an attempt is being made to provide an overview of various
aspects and issues of this study through the review of existing literature. Some of the
main studies selected for review have been discussed below.
Keeble et al. (1992), in their research work found that SMEs in rural areas in the UK
have better performance than that of their urban counterparts in terms of
employment growth.
Petrin (1994) in another article concluded that rural development is now being
largely linked to entrepreneurship. It acts as a vehicle to improve the quality of life
for individuals, families and communities in order to sustain a healthy economy and
environment.
Storey (1994) in his study found that policy measures can influence the level of
entrepreneurship.
Lyson (1995) indicated the prospects of small-enterprise framework as a possible
rural development strategy for the economically disadvantaged communities.
Vaessen and Keeble (1995) revealed that the external environment in the more
remote rural areas presents challenges for SMEs, which they need to adapt to if they
are to survive and grow.
Sherief, (2005) attempted to understand the determinants of rural
entrepreneurship and the environment conducive to its development. The study
concluded that to accelerate economic development in rural areas, it is necessary to
promote entrepreneurship.
Ramalingam and Gayatri (2009) stated that innovation could be used as a strategic
tool for development of entrepreneurship. The study concluded that small
innovation in the rural area would definitely catch up the majority of the population,
thereby leading to better quality of life of many people in the country.
Ganly, Kate and Mair, Johanna (2009) stated that one way to conceptualize the role
of social entrepreneurs in social change processes is to view them as institutional
entrepreneurs, i.e., entrepreneurial actors who introduce and push through the
alternative conceptions of social, political or cultural order. The study addresses the

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issues of institutionalized inequality and social exclusion through community
development work in eastern India.
Sharma, Swati, Vyas and Divya (2011) indicated that various social, economic,
political and ecological problems in rural areas in developing countries like India
create challenges in employment, decreasing agricultural production and increasing
food shortage. This has resulted a huge impact on the domestic production,
employment etc. To a certain extent, these problems can be solved by developing
entrepreneurship in rural India.
Mehta, (2011), in his study indicated that many Indian companies including MNC
started developing business strategies to tap the untapped rural market in India.
The study will be helpful for the various agencies to formulate plans and policies in
order to boost the rural entrepreneurship in India. This may help to make the Indian
rural market as a critical force in the global economy. From the review of literature
as mentioned above, we found few studies in the context of rural development in
India. Hence, the present study is just another attempt to contribute to the existing
literature.

2.1 Types Of Rural Entrepreneurship

The rural entrepreneurship can be classified as follows:
 Agricultural entrepreneurs
Individuals whose primary occupation is agriculture are agricultural entrepreneurs. In
fact, in the later 18th century physiocratic economists called the agricultural
cultivators, as entrepreneurs. Agro Based Enterprises: This category includes direct
sale or processing of agro products such as jiggery, pickles, sugar industries, oil
processing from oil seeds, dairy products, fruit juice, spices etc.

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  Artisan Entrepreneurs
Artisans are skilled persons working in villages. They are an important part of the
village community. The Reverse Bank of India has identified more than 100 crafts
pursued by artisans in villages. These entrepreneurs acquire their skills through
professional training in association with their kinship group. Important classes among
them are carpenters, blacksmiths, Textile Industry, Handicrafts, Engineering and
services, weavers, potters, etc.

 Merchant and Trading Groups

The small segment of the rural community is engaged in business activities. They run
petty shops, do commission business, buy the farmers products in the village itself
and sell in urban area for profit. This group was perceived to be traditionally
exploitative class
 Tribal Entrepreneur
Tribal entrepreneurs are predominantly found in the tribal villages. They are so called
because their source of origin is the tribal community. They could be regarded as an
entrepreneurial class by itself. Traditionally they did not pursue any occupation and
depended on forest produce for livelihood. Hence, whatever the occupation pursued
by them is considered to be entrepreneurial.

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2.2 Importance Of Rural Entrepreneurship
The importance of rural entrepreneurship is briefly highlighted as follows:
 Provides employment opportunities
Rural entrepreneurship is labour intensive and creates large scale employment
opportunities for the rural people. Rural entrepreneurship provides a clear solution
to the growing problem of large-scale unemployment and underemployment of rural
India
 Reduces on migration of rural population
Rural population moves towards urban for various reasons like income generation,
searching good job, utilize various facilities etc. Rural entrepreneurship will bring in
or develop infrastructural facilities like roads, power, bridges etc. It reduces the gaps
and disparities in income between rural and urban areas. Rural entrepreneurship can
avoid the migration of people from rural to urban areas in search of jobs.
 Balanced regional development
Rural entrepreneurship controls the concentration of industry in urban areas and
thereby promotes balanced regional development in the economy.
Rural industries also help protect and promote the art and handicrafts, i.e. the age-
old rich heritage of the country.
 Solution for social evils
The growth of rural entrepreneurship reduces the social evils like poverty, social
tensions, atmospheric pollution, the growth of slums and ignorance of inhabitants
etc.
 Encourages the rural youth
Rural entrepreneurship encourages young and promising entrepreneurs to develop
and carry out entrepreneurial activities in the rural sector.
 Improves standard of living
Rural entrepreneurship will also increase the literacy rate of rural people. Their
education and self-employment will prosper the community, thus improving their
standard of living.

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  Proper utilisation of local resources
Rural industries help in the maximum utilisation of local resources like raw materials
and labour for productive purposes and thus increase productivity. Efficient and
effective use of limited resources by the entrepreneurs leads to overall economic
development of an area.
 Earnings of foreign exchange
Rural entrepreneurship plays significant role in increasing the foreign exchange
earnings of the country through export of their produce
 Improvement in per capita income
Rural entrepreneurship generates more output, employment and wealth by
exploiting new opportunities, thereby helping to improve the per capital income of
rural people.
 Produces goods of consumers’ choice
Rural industries including cottage and village industries produce goods of individual
consumers’ taste and preferences, jewelry, saris; artistic products are produced to
cater to the needs of different consumer according to their taste, preferences and
design.

2.3 Problems Of Rural Entrepreneurship

Rural Entrepreneurs are playing very important role in the development of economy.
They face various problems in day to day work. Every business has its own kind of
problems. Some of the major problems faced by rural entrepreneurs are as under.
 Financial problems

1. Scarcity of funds: Most of the rural entrepreneurs are not getting enough
financial support.
2. Lack of infrastructural facilities: The growth of rural entrepreneurs is
inhibited due to scarcity of infrastructural facility.

 Marketing problems

1.Competition: Rural entrepreneurs face severe competition from large sized

organisations. New venture are not getting enough facilities.

2.Middlemen: Rural entrepreneurs are mostly depending on middleman for the

marketing of their goods. They causes various problems.

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 Management problems

4. Lack of Knowledge of information technology: Information technology

is not very common in rural areas.
5. Legal formalities: Rural Entrepreneurs find very difficulty in gaining license
due to lack of legal knowledge
6. Procurement of raw materials: Procurement of raw materials is really a
tough task for rural entrepreneur. They may end up with poor quality raw
materials, may also face the problem of storage and warehousing.

 Lack of technical knowledge

Rural entrepreneurs suffer a severe problem due to lack of training facilities and
extension services.

 Lack of infrastructural facilities

Rural areas are characterized by poor infrastructural facilities viz, roads, water,
market, electricity, street lighting, road transport, storage and communication etc.
which hamper the smooth movement of various industrial activities.

 Non availability of skilled labours

In rural areas, skilled labours cannot be found easily by the entrepreneurs. Highly
skilled personnel prefer to work in big cities due to high salary than rural areas.

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 Chapter-3
Data Collection

The performance of the rural industries in respect of production, sales and

employment is shown in the following table:

Table -1.1
Production & Sale of Village Industries Products
Year Production Growth Rate Sales Growth Rate
(%) (Rs.In crore) (%)
2011-12 21135.1 - 25829.3 -
2012-13 23262.31 10.06 26818.13 3.82
2013-14 25298 8.75 30073.16 12.13
2014-15 26689.4 5.50 31965.5 6.29
2015-16 33424.6 25.23 40384.6 26.33
2016-17 41110.3 22.99 49993.16 23.78
2017-18 46454.8 13.00 56672.2 13.36
2018-19 56255.2 21.09 71113.7 25.48
2019-20 65343.1 16.15 84664.3 19.05
2020-21 76582.4 17.20 101307 19.65
Source: Compiled from various issues of MSME annual reports.

The above table reveals the performance of village or rural industries in respect of
production and sales. Village Industries have shown growth over the previous year.
Production and Sales have grown consistently from total production worth Rs. 21135.1
Crores in 2011-12, the number stood at Rs. 76582.4 Crores in 2020 – 21. Similarly, sales of
goods produced by Village Industries have shown growth from Rs. 25829.3 Crores in 2011-
12 to Rs. 101307 Crores in 2020 – 21. Annual growth rate also increased remarkably from
10.06% to 17.20% in production and from 3.82% to 19.65% in sales of Village Industries.

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Table 2.2
Employment under Village Industries
Year Employment Growth Rate
(Artisian in lakhs ) (%)
2011-12 108.65 -
2012-13 114.05 4.97
2013-14 119.4 4.96
2014-15 123.19 3.17
2015-16 126.76 2.89
2016-17 131.84 4.00
2017-18 135.71 2.93
2018-19 142.03 4.65
2019-20 147.76 4.03
2020-21 154.12 4.30
Source: Compiled from various issues of MSME annual report.

The above table reveals the performance of village or rural industries in respect of
employment. Village Industries Employment has grown from years, from 108.65 Lakhs
Artisans in 2011 – 12 to 154.12 Lakhs Artisans in 2020 – 21. But which regards to the
employment, the annual growth rate is declining from 4.97% in 2012-13 to 4.30% in
2020-21.

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 Chapter-4
DATA ANALYSIS AND DATA INTERPRETATION

1. Gender: Out of total 171 participants in the six programmes, majority is of women
(131) and only
40 men benefitted from these programmes. Out of six programmes 4 were only for
women participants and only one was particularly for men. One was mixed i. e. both men
and
women were selected to participate. This shows clear positive bias towards women
empowerment through such training.

140

120

100

80

60 Series1

40

20

0
Women Men

~34~
2. Educational Background of participants: Maximum participants (74) were 10th
pass, followed by 12th pass (72), 8 participants had less than 10th education. 5
participants were from SY BSc and 10 were graduate. Only 2 participants had Post
Graduate degree.

80
70
60
50
40
Series1
30
20
10
0
12th 10th Graduate PG Upto 10th SYBSc

3. Category: Maximum participants were OBC (93), followed by ST (42) and SC (39).11
participants were from general category and only one Muslim participant benefitted
from these programmes.
The special programmes cover special groups that help in inclusive growth of all sections
of the society.

~35~
100
90
80
70
60
50
Series1
40
30
20
10
0
OBC ST SC General Muslim

~36~
 Chapter-5
CONCLUSION AND RECOMMENDATION

(Conclusion)
Rural industries play an important role in the national economy, particularly in the rural
economy. The entrepreneur is the key to the creation of new enterprises that energize the
economy and rejuvenate the established enterprises that make up the economic structure.
Therefore, Rural Entrepreneurship is important not only as a means of generating
employment opportunities in the rural areas with low capital cost and raising the real
income of the people, but also its contribution to the development of agriculture and
urban industries. Without rural industrialisation, it would not be easy to solve the problem
of unemployment in rural areas. Rural entrepreneurship can be considered one of the
solutions to reduce poverty, migration, economic disparity, unemployment and develop
rural areas and backward regions.
Rural entrepreneurs are certainly act as a key figure in economic progress of India. They play
a vital role in converting developing country into developed nation. In today’s global market
a country’s economic policy environment must always be favourable for an organization to
achieve efficiency. Economic policy of a country should also enable entrepreneurs to
provide magical touch to an organization irrespective of public, private or joint sector in
achieving innovativeness, speed, flexibility and also strong sense of self determination. Rural
entrepreneurship however is the best answer for removal of rural poverty in India. Hence
government should stress and emphasize more on integrated rural development programs.
Also majority of the rural youths do not think of entrepreneurship as a career option.

Hence organizations and government should come with training and sustaining
support systems providing all necessary assistance so that rural youth can be motivated to
take up entrepreneurship as a career. Besides there should also be efficient regulated
markets and governments should also lend its helping hand in this context.

~ 37 ~
  Suggestions for the problems of Rural Entrepreneurship
In the light of the above problems, the following suggestions can be put forth to develop the
rural entrepreneurs:

 Separate financial assistance for rural entrepreneurs should be provided by the

Government.
 Rural entrepreneurs should be provided adequate and timely financial assistance
from all the financial institutions and banks.
 Special training programmes for rural entrepreneurs should be arranged by the
Government to improve their knowledge and skill.
 The rural educated youth should come forward in the field of entrepreneurship. 
Modernisation of their technology is very much essential.
 Sufficient finance must be given to modernise their outdated technology, tools and
implements in order to enable them to compete with the large scale industries.
 Rural entrepreneurs must be provided with adequate infrastructural facilities.
 Industrial sheds can be constructed in the rural areas to accommodate rural
entrepreneurs and can be provided with all facilities in this shed.
 Rural entrepreneurs have to improve the quality of their products in order to
compete with similar other units and also with the large scale industries.
Industrial co-operatives can be set up on the same lines of Primary agricultural co-
operatives in rural areas in order to provide marketing support for the products of rural
entrepreneurs, to supply raw materials to the rural industries and to free them from the
exploitation of middlemen.

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 (RECOMMENDATION)

Different organizations like IFCI, SIDBI, ICICI, NABARD etc are trying to sort the major
problems faced by rural entrepreneurs. Marketing problems are mainly related with pricing,
distribution channels, product promotion etc. In order to make the rural entrepreneurs to
state the business venture, following measures may be adopted:

 Creation of finance cells: Banks and financial institutions which provide finances to
entrepreneurs must create special cells for providing easy finance to rural
entrepreneurs
 Concessional rates of Interest: On easy repayment basis and at concessional rates
of interest the rural entrepreneurs should be provided finances. The cumbersome
formalities should necessarily be avoided in sanctioning the loans to rural
entrepreneurs.
 Offering training facilities: Training is essential for the overall development of
entrepreneurships. It also enables the rural entrepreneurs to undertake the
venture successfully as it certainly imparts required skills to run the enterprise. At
present the economically weaker entrepreneurs of the society are necessarily
offered such training facility by government of India regarding skill development of
the existing entrepreneurs so that rural entrepreneurs can indeed generate income
as well as employment opportunities in rural area.
 Power supply of raw materials: Rural entrepreneurs should be surely ensured of
proper supply of scare raw materials on a priority basis. Subsidy may also be
offered at times to make the products manufactured by rural entrepreneurs
reasonable and cost competitive.
 Setting up marketing co-operatives: Proper assistance and encouragement should
be provided to rural entrepreneurs for setting up marketing co-operatives. These
co-operatives shall help in getting various inputs at reasonable rate and they are
helpful in selling their products at remuneration prices. Thus comprehensive
training, proper education, setting up of separate financial Institutions,
development of marketing co-operatives to a large extent help to flourish the rural
entrepreneurs in India.

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 A number of researchers and academic personnel have been studying in the field of
rural entrepreneurship. Due to its economic importance, the field is being regularly
analyzed and studied. As said earlier, majority of the population of India resides in
rural area hence it becomes necessity that the field should be studied for knowing
various issues, problems and also opportunities hidden which can develop this area
in economic perspective.
 Local resources need to promote with employability
 Training on various aspect should arrange at village it self
 BPO and Back office services can be started in rural area
 Processing unit of agricultural product need to promote
 Agricultural Tourism can be developed as major source for supplementary income.
 Avoid migration from rural region and engage these resources by giving them work.
 Promoting rural brands in market.
 Quality of life is next gen brand going to out from rural region
 Promotion and infrastructural support to local entrepreneur.

~ 40 ~
 Reference

I have collected information from several websites:

 https://www.ijsr.net/archive/v8i11/ART20202945.pdf

 https://www.researchgate.net/profile/Shubhada-
Kulkarni/publication/313798944_Entrepreneurship_and_Rural_development/links/58a6c46
3aca27206d9a83a7d/Entrepreneurship-and-Rural-development.pdf

 https://bebusinessed.com/history/history-of-entrepreneurship/

 Bhanshali, S. (1987). Entrepreneurship Development (1 ed.). New Delhi: Himalaya Publishing

House

 Das, D. C. (2014). Prospects and Challenges of Rural Entrepreneurship Development in NER-

A Study.

 Karimi, S. (2015). Rural entrepreneurship: chalanges and opportunities. Journal of

Entrepreneurship in Agriculture .

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~ 42 ~