TRANSFORMATION OF RURAL INDIA THROUGH RURAL ENTREPRENEURSHIP

Abstract        

          Indian rural sector is no longer primitive and isolated. Rural industrialization is viewed as an active means of accelerating the process of rural development. Establishing businesses is important for a country’s progress as it augments economic and employment growth. Government of India has been continuously assigning increasing importance and support for the promotion and growth of rural entrepreneurship. Though there are many challenges and issues in rural entrepreneurship, it is found that there are huge opportunities for rural entrepreneurs to grow and develop and sustain in the global market. The rural people must be given proper awareness about the opportunities and various schemes of government in way to encourage them to become a successful rural entrepreneur.

Keywords:  Innovative Ideas, Rural Entrepreneurship and Rural Development.

Introduction

         India is a country of villages. About three-fourth of India's population are living in rural areas out of which 75% of the labour force is still earning its livelihood from agriculture and its associated activities. Land being limited is unable to absorb the labour force in agriculture. Therefore, there is a need to develop rural industries to solve rural unemployment and rural migration to cities. Growth and development of rural economy is an important pre-condition to the development of the whole nation. The gap between rural urban disparities should be lessened. The standard of living of the rural people should be increased. Entrepreneurship in rural sector provides an answer to the above problems. Indian rural sector is no longer primitive and isolated. Therefore, entrepreneurship in the rural and tribal areas appears large to solve the problems of  unemployment and backwardness of Indian economy. Rural industrialization is viewed as an active means of accelerating the process of rural development. Government of India has been continuously assigning increasing importance and support for the promotion and growth of rural entrepreneurship.

           Rural entrepreneurship is a dynamic and necessary component of economic development and sustainability in rural areas. It involves the creation and management of businesses, ventures, and initiatives in non-urban settings, where natural resources, agriculture, and community-based activities often play a significant role. Rural entrepreneurship contributes to job creation, income generation, and the overall well-being of rural communities, making it a vital force for driving change and progress in these areas.

            In rural regions around the world, entrepreneurship takes on various forms, from agricultural and agribusiness enterprises to eco-tourism initiatives, crafts and artisan businesses, and technology-based startups. These diverse entrepreneurial endeavors are often deeply connected to the unique strengths, resources, and traditions of rural environments.

           Rural entrepreneurship is not only a means of creating economic opportunities but also a way to harness the potential of rural regions, helping them thrive in an ever-changing global landscape. This dynamic and resilient form of entrepreneurship embodies the spirit of innovation,              resourcefulness, and community engagement that characterizes rural life, making it a driving force for rural development and transformation.

          Establishing businesses is important for a country’s progress as it augments economic and employment growth. State and central governments are continuously launching new and attractive schemes to encourage their citizens to come up with innovative business ideas. Setting up an enterprise depends on one’s capacity, which differs from person to person. If the enterprise must come up in a rural environment, the dynamics are more complex compared to the urban context.

          Rural enterprises are business entities, which by the means of effective use of local resources, promote revenue generation and act as agents of social change at the grassroots level. These entities not only play a essential role in the holistic development of the rural economy but also contribute to the economic growth of our nation. The establishment of a large number of profitable enterprises in a region can bring in government investment, attract private participation, generate local employment, bring partnerships and secure funding apart from channelising idle savings into business entities.

           According to the Government of India, “Any industry located in a rural area, village or town with a population of 20,000 or below and an investment of INR three crores in plant and machinery is classified as a village industry.” It is a revised definition of the previous one provided by Khadi &Village Industries Commission.as of March 31, 2022, India has more than 63 million MSMEs, out of which about 94 per cent are micro-enterprises. According to official data released on April 30, 2022, the country’s 6.33 crore MSMEs employ about 12 crore workers. According to World Bank Data 2019, about 65 per cent of the Indian population, most of them (about 58 per cent, as per 2018-19 PLFS data) earn their livelihood from agriculture and allied sectors.

            Rural enterprises are the best way to use local resources, which leads to prosperity and economic growth. It, in turn, spurs avenues for employment, which has a direct impact on the levels of migration. Therefore, to ensure the development of a viable business model to better support aspiring rural entrepreneurs, it is fundamental to ensure that manpower, money, material, machinery and understanding of the market is complete.

Types of Rural Entrepreneurship

Individual Entrepreneurship

      One individual owns this company. When an individual tends to set up a business taking into account various benefits and threats; with his/her resources, in a special case, capital may be gathered from capitalists or financial companies, providing the needed strong business acumen.

Group Entrepreneurship

            When a small group of individuals works together to create a business, they rely on their abilities or qualities to build it. Though, administration of such groups is significantly more difficult than solo ones due to shared accountability or unsettled judgment.

Cluster Formation

              Clustering has been regarded as a setting with exposure to all interconnected and contending institutions. Clusters usually form when commercial activities inside a particular supply chain are consolidated. If a substantial number of individuals or activist groups, including Non- Governmental Organisations (NGOs), Voluntary Organisation (VOs), Self Help Groups (SHGs), Community Based Organisations (CBOs), participate, the business will form. The benefits of such a group include economies of scale, a strong supply chain, and, most importantly, a promising basis for sharing revenue growth with significant societal impact. The sustainability of Rural Entrepreneurship 249 such ventures is usually driven not just by resources but by the affirmative engagement of entrepreneurs.

Co-operatives

               An independent group of citizens uniting deliberately to satisfy common interests and requirements within a jointly-owned venture. It consists of both formal and informal activities working towards a shared agenda, for instance, artefact makers, livestock, and fishing businesses. The establishments mentioned above are fantastic examples of combining ingenuity and innovation at the grassroots level to overcome rural challenges in a commercially viable manner.

Challenges for rural entrepreneurs

         While India has marginally increased its ranking in terms of the ease of doing business index, the challenges and concerns faced by rural entrepreneurs in running and scaling their enterprises persist. The concerns range from the prevalent societal and gender-based biases to a lack of understanding of business, entrepreneurship and access to the requisite skills essential to run such enterprises. The entrepreneurs who have the courage to work on a business idea often face challenges in understanding the needs of the market, the viability of their product and its suitability for manufacture.

         Furthermore, those enterprises who manage to establish themselves in the market and generate some early-stage revenue often face difficulties. These range from inconsistent market linkages, severe competition from urban markets, a lack of infrastructural facilities and logistical challenges, inadequate understanding of the government support mechanisms available for them to unskilled labour for the effective delivery of product/service. Other challenges include the availability of working capital, the adoption to technology and the inability to diversify their products range.

Review of Literature

        Uma and Ramesh (2018) study focused on government support to women entrepreneurship development in rural areas of Karnataka state. This study examines the different types of institutions at national, state and local levels to help and empower women entrepreneurs through government (i.e. both center and state) sponsored programmes in Karnataka’s rural area. It concludes that women entrepreneurship development schemes introduced by center and Karnataka state government are helping rural women to gain entrepreneurial benefits and increasing their standard of living, but it further adds there is need of inclusive women entrepreneurship development in rural Karnataka.

          Gowramma and Kumar (2018) focused their study on gender bias in case of rural entrepreneurship development in Karnataka with special reference to Coorg district in Karnataka state. The study results highlight that high educated women in Coorg district are involved in entrepreneurship activities and they are passionate in their efforts as result more than half of small and medium enterprises in Coorg are owned and run by women entrepreneurs. This study also suggested more government assistance to women entrepreneurs such as financial needs and market exploration at national and international level where most of goods are sold locally.

          Chandrashekar (2017) studied the linkages between organic farming and rural entrepreneurship development in Mysore district located in Karnataka state. It examines the socio-economic status of organic farming community in Mysore district and their contribution to rural entrepreneurship development. Organic farming is a big challenge for this globalized society due to fast and quick supply economics but there 35 are new markets for organic products which can be gained by farmers through efficient rural entrepreneurship. This study suggest that government should initiate subsidies and training programmes for organic farming to farmers to get more initiation of rural entrepreneurship development specifically for farm community.

            Sharma, Narayan (2017) entitled Role and Importance of Rural Entrepreneurs in India was studied about Rural Entrepreneurship Development Programmes (REDPS), the role of the Technology Park, role and importance of Rural Entrepreneurs in India. Study found that rural entrepreneurship cannot be developed without important training, therefore should give intensive training programme for younger people in rural India.

              George Njenga King‟ori, & Fridah Simba Theuri (2016) studied about The Role of Entrepreneurship Training and Education in Enhancing Growth of Small and Medium Enterprises in Kenya: A Case Study of Mombasa County. The study has aimed at role of Entrepreneurship skills, innovation skills, apprenticeship and business Skills in enhancing the growth of SMES. It was found that entrepreneurial training had substantial impact on performance of the enterprises and this influence the growth of the business.

              Akanganngang, J. A. (2016) studied about entrepreneurship and poverty reduction in rural northern Gana. Study focused with the cause of poverty in Gana i.e., unemployment. Therefore, entrepreneurship development has been played a significant role in the poverty alleviation. The findings of this research study conclude that poverty is endemic within the study communities. Research also found that limited infrastructural facilities may a barrier for the entrepreneurial development.

               Ayodeji M. A. (2015) conducted a study entitled ‘Entrepreneurial Development Barriers in a Developing Nation: A Case Study of the Nigerian Printing SMEs’. This study investigated the barriers which affect entrepreneurial development in developing nation. The main goals of thesis were to provide practical information on these barriers as well as to propose possible solutions to the problems. The Study findings revealed that individual´s interest, personality, training, skills and working experience are essential in the entrepreneurial evolvement in the Nigerian printing SMEs. The findings further revealed that the Nigerian government, Chartered Institute of Professional Printers of Nigeria (CIPPON), various printing/printers associations and individual printing SME owners are the key players in the entrepreneurial developmental activities for the Nigerian printing SMEs.

              Dipanjan Chakraborty (2014) entitled Rural Entrepreneurship Development Efforts  on Entrepreneurial Growth with Special Reference to Sonitpur District of Assam. This study analysed the growth and development of rural entrepreneurship in backward area as well as focused with various Socioeconomic factors, motivational factors, growth factors and the problems faced by the rural entrepreneurs. The study found six major problems i.e., raw material, marketing, labour, finance and technical & managerial problems. Study also framed some valuable suggestions for improving the rural enterprises and directions for future research.

                 Meckel, P. (2014) in his study, the role of business incubators in developing entrepreneurship, studied about the entrepreneurial development within a business incubator environment. Study found that how information, experience, skills, and identity can be transformed into new knowledge which leads to the identification of opportunities and developments.

Schemes and Programs Designed to Encourage Rural Entrepreneurships

ASPIRE (A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship) 

                           It aims to assist a network of technology hubs as well as incubation centres to drive start-ups towards excellencies in the agro-industry. ASPIRE grants financial services to the Livelihood Business Incubators (LBI) and Technology Business Incubators (TBI). It adds synergies between the scheme and the livelihood enterprises. Take effective measures for the incubation and commercialization of new proposals through institutes, primarily ones from the farm economy. They are known as "knowledge allies."

 SFURTI (Scheme of Fund for Regeneration of Traditional Industries)

                   The priority is to structure conventional businesses as well as artisans into clusters. To raise competitiveness, enlighten traditional craftspeople of the affiliated groups with specific skills and basic amenities. Support long-term sustainable growth with employment, marketability, and equipment. Indurate cluster governance and public-private partnership arrangements to sooner or later recreate such cluster-based revitalization. Rural Entrepreneurship 255 To facilitate soft, hard, and thematic intervention strategies, monetary help in each project is up to a ceiling of `8 crores. The scheme is open to NGOs, government, private, and panchayat raj institution functionaries, as well as corporate philanthropists with expertise in cluster development.

SVEP (Start-up Village Entrepreneurship Programme)

                  Ministry of Rural Development is administering SVEP, a sub-scheme underneath the Deendayal Antyodaya Yojana–National Rural Livelihoods Mission (DAYNRLM). The goal is to serve the rural poor by setting up businesses in nonfarm sectors. Its claimants comprise DAY-NRLM's Self Help Group (SHGs). The project operates at block levels, so a total of 2,400 firms could be endorsed inside a single block.

CRPEP (Cadre of Community Resource Persons-Enterprise Promotion)

                     SVEP offers an environment for rural venture progression that includes the Community Enterprise Fund (CEF) for financial assistance but also connects to bank loans. CRP-EP supports in planning, training, etc. It has centres at the block stage for disseminating direction to entrepreneurs. Provision of Urban Amenities to Rural Areas (PURA) envisions rural infrastructure investment alongside economic restoration measures through the PPP (Public-Private Partnership) model. This is an attempt to leverage private sector efficiencies within asset management and service delivery. Further, to shape livelihood prospects and urban conveniences to mandated standards. They would be accountable for maintenance within designated panchayats/clusters of panchayats for ten-year tenure.

PMKVY (Pradhan Mantri Kaushal Vikas Yojana)

              The MSDE's flagship initiative, being executed by the National Skill Development Corporation. The goal of such a skill certification is to encourage youth to undertake industry-centric skill training that will help them secure a decent life. It facilitates certificate standardization as well as devises a skill register. This raises current labour performance by integrating training into the priorities of the economy. Further participants acquiring training skills from authorized institutions are rewarded with an average pay of `8,000.

SISFS (Startup India Seed Fund Scheme)

                It intends to provide financial assistance to entrepreneurs who can demonstrate a concept, prototype, product testing, market penetration, or commercialization. This enables a stage wherein start-ups might attract angel investors or venture capitalists, as well as commercial banks and financial institutions.

Conclusion

           India has made tremendous progress towards creating a new business environment for enabling an increased participation of stakeholders in the workforce via enterprise creation. However, acceleration of these numbers is possible through the introduction of some key models, such as a marketing cooperative to promote products manufactured by rural enterprises thereby eliminating middlemen. The establishment of common facility centres, particularly for production, can also boost rural entrepreneurship. Building business expertise through capacity building and training is crucial for entrepreneurial success. It, coupled with an access to financial linkages at concessional interest rates, flexible repayment options and surrendering of collateral security will spur the growth in this sector.

            Thus, from the view-points of various authors, though there are many challenges and issues in rural entrepreneurship, it is found that there is huge opportunities for rural entrepreneurs to grow and develop and sustain in the global market. The challenges must bring-in more innovations with continuous motivation by self, financial, technical and market amenities. The rural people must be given proper awareness about the opportunities and various schemes of government in way to encourage them to become a successful rural entrepreneur.

References

• Akanganngang Joseph Asitik (2016). Entrepreneurship: A means to poverty reduction in rural northern Ghana. Published thesis. University of Central Lancashire.
• Ayodeji Michael Adewale (2015). Entrepreneurial Development Barriers in a Developing Nation: A Case Study of the Nigerian Printing SMEs. Published Master Thesis. HAMK University of Applied Science.
• Dipanjan Chakraborty (2014). Rural Entrepreneurship Development Efforts- A Study on Entrepreneurial Growth with Special Reference to Sonitpur District of Assam. Published thesis. Department of Commerce, Mahatma Gandhi School of Economics and Commerce, Assam University.
• Dr. H. M. Chandrashekar (2017), Organic Farming and Rural Entrepreneurship Development: A Study in Mysore District, Karnataka, International Journal of Research in Business Studies and Management Volume 4, Issue 11, 2017, PP 28-38 ISSN 2394-5923 (Print) & ISSN 2394-5931 (Online).
• George Njenga King‟ori, Dr. Fridah Simba Theuri (2016). The Role of Entrepreneurship Training and Education in En-hancing Growth of Small and Medium Enterprises in Kenya: A Case Study of Mombasa County. IOSR Journal Of Humanities And Social Science (IOSR-JHSS) Volume 21, Issue 4, Ver. I (Apr. 2016) PP 97-106, ISSN: 2279-0845.
• Meckel, PingPing (2014). The role of business incubators in developing entrepreneurship, Published thesis, Manchester Metropolitan University, http://hdl.handle.net/2173/595501.
• Sharma, Narayan (2017). Role and Importance of Rural Entrepreneurs in India, Journal of HR, Organizational Behaviour & Entrepreneurship Development, Vol. 1, Issue, 01. 25-29p, August, 2017.
• Uma SN, Ramesh HN (2018) A Study on Government Support for Promoting Women Entrepreneurs in Karnataka State. Int J Econ Manag Sci 7: 521. doi: 10.4172/2162-6359.1000521.