Kurukshetra Magazine November 2023 - 3 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

 Page 1


Kurukshetra       November  2023 46
The author is Advisor (Livelihoods and Entrepreneurship), North eastern, handicrafts and Handloom Development 
Corporation Limited (NEHHDC). Email: sriparnabbaruah@gmail.com
Dr Sriparna B Baruah
ural entrepreneurship is a crucial 
aspect of India’s economic growth 
and development. Rural enterprises 
are business entities that promote revenue generation 
and act as agents of social change at the grassroots level. 
They play a pivotal role in the holistic development of 
the rural economy and contribute to the economic 
growth of the nation. According to official data released 
on April 30, 2022, India has more than 63 million 
MSMEs, out of which about 94% are micro-enterprises. 
The establishment of a large number of profitable 
enterprises in a region can bring in government 
investment, attract private participation, generate local 
employment, form partnerships, secure funding, and 
channelise idle savings into business entities. However, 
R
Sustainability of Rural Enterprises
Opportunities, Challenges and the Way Forward
The background of India’s growth story is directly linked with rural enterprise development. With 
increasing opportunities for enterprise creation in both the farm and non-farm sectors, and special 
emphasis on agro-based and skill-based sectors like the handloom and handicraft sectors, holistic 
interventions of both backward and forward linkage is the need of the hour. 
rural entrepreneurs face several challenges in running 
and scaling their enterprises. These challenges range 
from prevalent societal and gender-based biases to a 
lack of understanding of business, entrepreneurship, 
and access to the requisite skills essential to running 
such enterprises. It is important to understand that 
rural enterprises are the best way to use local resources, 
which can lead to prosperity and economic growth. This 
in turn will spur 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 
are complete. 
Page 2


Kurukshetra       November  2023 46
The author is Advisor (Livelihoods and Entrepreneurship), North eastern, handicrafts and Handloom Development 
Corporation Limited (NEHHDC). Email: sriparnabbaruah@gmail.com
Dr Sriparna B Baruah
ural entrepreneurship is a crucial 
aspect of India’s economic growth 
and development. Rural enterprises 
are business entities that promote revenue generation 
and act as agents of social change at the grassroots level. 
They play a pivotal role in the holistic development of 
the rural economy and contribute to the economic 
growth of the nation. According to official data released 
on April 30, 2022, India has more than 63 million 
MSMEs, out of which about 94% are micro-enterprises. 
The establishment of a large number of profitable 
enterprises in a region can bring in government 
investment, attract private participation, generate local 
employment, form partnerships, secure funding, and 
channelise idle savings into business entities. However, 
R
Sustainability of Rural Enterprises
Opportunities, Challenges and the Way Forward
The background of India’s growth story is directly linked with rural enterprise development. With 
increasing opportunities for enterprise creation in both the farm and non-farm sectors, and special 
emphasis on agro-based and skill-based sectors like the handloom and handicraft sectors, holistic 
interventions of both backward and forward linkage is the need of the hour. 
rural entrepreneurs face several challenges in running 
and scaling their enterprises. These challenges range 
from prevalent societal and gender-based biases to a 
lack of understanding of business, entrepreneurship, 
and access to the requisite skills essential to running 
such enterprises. It is important to understand that 
rural enterprises are the best way to use local resources, 
which can lead to prosperity and economic growth. This 
in turn will spur 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 
are complete. 
47 Kurukshetra       November  2023
Rural enterprises can be broadly classified into two 
types:
? Proprietial ownership
? Group entrepreneurship that includes SHG’s, 
Cooperatives, and Producer companies
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.
Importance of Rural Entrepreneurship in India
Entrepreneurship can play a crucial role in rural 
development. If entrepreneurship is encouraged in 
rural areas, it would stimulate a change in the face 
of rural areas by solving the problems of poverty, 
unemployment, economic disparity, and a low standard 
of living. Rural entrepreneurs play an indispensable part 
in the overall economic development of the country. 
The amplification and enlargement of rural industries 
facilitate self-employment, and helps in the maximum 
utilisation of locally available raw materials and labour.
Importance of rural entrepreneurship is as under:
Resources Utilisation: Rural industries foster the 
appropriate utilisation of local resources like raw 
materials and labour for productive purposes and thus 
enhance productivity. They can also mobilise rural 
savings, which helps enhance rural funds.
• Employment Generation: Rural industries create 
large-scale employment openings for rural people. 
The basic issue of large-scale unemployment and 
underemployment in rural areas can be efficiently 
solved through rural industrialisation.
• Avoid the Migration of Rural Population: Lack 
of employment opportunities, poverty, etc., 
has forced the rural people to head towards 
urban areas for livelihood.  It creates a rural-
urban imbalance. Under these situations, rural 
entrepreneurship can provide employment, and it 
will discourage rural people to migrate from rural 
areas in search of jobs.
• Artistic Activities Promotion: The rich heritage 
of rural India is conserved by protecting and 
promoting handicrafts and art through rural 
entrepreneurship.
• Check on Social Evils: The growth of rural 
entrepreneurship can diminish social evils like 
poverty, the growth of slums, pollution in cities, 
etc. 
• Encourage the Rural Youth: Rural entrepreneurship 
can promote the rural youth and expose them to 
several paths to adopting entrepreneurship and 
promoting it as a career.
• Stimulate Economic Development: Rural 
industrialisation can stimulate the economic 
development of rural areas. This will curb rural 
urban migration and also abate the unsymmetrical 
growth of cities, increase of slums, social tensions, 
social issues, environmental pollutions, etc.  
With the increasing thrust on rural development, some 
positive changes like the following is visible.
• Farming community is becoming aware about 
the value of natural resources.
• Agro-based industries are emerging in rural 
areas.
• Traditional skill-based sectors like Handloom and 
Handicraft have started catering to the niche 
market.
Challenges Faced by Rural Entrepreneurs
While India has marginally improved its ranking in 
terms of ease of doing business, the challenges and 
concerns faced by rural entrepreneurs in running and 
scaling their enterprises persist. The concerns range 
Page 3


Kurukshetra       November  2023 46
The author is Advisor (Livelihoods and Entrepreneurship), North eastern, handicrafts and Handloom Development 
Corporation Limited (NEHHDC). Email: sriparnabbaruah@gmail.com
Dr Sriparna B Baruah
ural entrepreneurship is a crucial 
aspect of India’s economic growth 
and development. Rural enterprises 
are business entities that promote revenue generation 
and act as agents of social change at the grassroots level. 
They play a pivotal role in the holistic development of 
the rural economy and contribute to the economic 
growth of the nation. According to official data released 
on April 30, 2022, India has more than 63 million 
MSMEs, out of which about 94% are micro-enterprises. 
The establishment of a large number of profitable 
enterprises in a region can bring in government 
investment, attract private participation, generate local 
employment, form partnerships, secure funding, and 
channelise idle savings into business entities. However, 
R
Sustainability of Rural Enterprises
Opportunities, Challenges and the Way Forward
The background of India’s growth story is directly linked with rural enterprise development. With 
increasing opportunities for enterprise creation in both the farm and non-farm sectors, and special 
emphasis on agro-based and skill-based sectors like the handloom and handicraft sectors, holistic 
interventions of both backward and forward linkage is the need of the hour. 
rural entrepreneurs face several challenges in running 
and scaling their enterprises. These challenges range 
from prevalent societal and gender-based biases to a 
lack of understanding of business, entrepreneurship, 
and access to the requisite skills essential to running 
such enterprises. It is important to understand that 
rural enterprises are the best way to use local resources, 
which can lead to prosperity and economic growth. This 
in turn will spur 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 
are complete. 
47 Kurukshetra       November  2023
Rural enterprises can be broadly classified into two 
types:
? Proprietial ownership
? Group entrepreneurship that includes SHG’s, 
Cooperatives, and Producer companies
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.
Importance of Rural Entrepreneurship in India
Entrepreneurship can play a crucial role in rural 
development. If entrepreneurship is encouraged in 
rural areas, it would stimulate a change in the face 
of rural areas by solving the problems of poverty, 
unemployment, economic disparity, and a low standard 
of living. Rural entrepreneurs play an indispensable part 
in the overall economic development of the country. 
The amplification and enlargement of rural industries 
facilitate self-employment, and helps in the maximum 
utilisation of locally available raw materials and labour.
Importance of rural entrepreneurship is as under:
Resources Utilisation: Rural industries foster the 
appropriate utilisation of local resources like raw 
materials and labour for productive purposes and thus 
enhance productivity. They can also mobilise rural 
savings, which helps enhance rural funds.
• Employment Generation: Rural industries create 
large-scale employment openings for rural people. 
The basic issue of large-scale unemployment and 
underemployment in rural areas can be efficiently 
solved through rural industrialisation.
• Avoid the Migration of Rural Population: Lack 
of employment opportunities, poverty, etc., 
has forced the rural people to head towards 
urban areas for livelihood.  It creates a rural-
urban imbalance. Under these situations, rural 
entrepreneurship can provide employment, and it 
will discourage rural people to migrate from rural 
areas in search of jobs.
• Artistic Activities Promotion: The rich heritage 
of rural India is conserved by protecting and 
promoting handicrafts and art through rural 
entrepreneurship.
• Check on Social Evils: The growth of rural 
entrepreneurship can diminish social evils like 
poverty, the growth of slums, pollution in cities, 
etc. 
• Encourage the Rural Youth: Rural entrepreneurship 
can promote the rural youth and expose them to 
several paths to adopting entrepreneurship and 
promoting it as a career.
• Stimulate Economic Development: Rural 
industrialisation can stimulate the economic 
development of rural areas. This will curb rural 
urban migration and also abate the unsymmetrical 
growth of cities, increase of slums, social tensions, 
social issues, environmental pollutions, etc.  
With the increasing thrust on rural development, some 
positive changes like the following is visible.
• Farming community is becoming aware about 
the value of natural resources.
• Agro-based industries are emerging in rural 
areas.
• Traditional skill-based sectors like Handloom and 
Handicraft have started catering to the niche 
market.
Challenges Faced by Rural Entrepreneurs
While India has marginally improved its ranking in 
terms of ease of doing business, the challenges and 
concerns faced by rural entrepreneurs in running and 
scaling their enterprises persist. The concerns range 
Kurukshetra       November  2023 48
from the prevalent societal and gender-based biases to 
a lack of understanding of business, entrepreneurship, 
and access to the requisite skills essential to running 
such enterprises. 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 that 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, and an 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 of 
technology, and the inability to diversify their product 
range.
To address these challenges, there is a need for a holistic 
approach that combines policy support, infrastructure 
development, and capacity building for rural youth 
entrepreneurs. The State and Central Governments are 
continuously launching new and attractive schemes to 
encourage their citizens to come up with innovative 
business ideas.
Recovery Roadmap
India has made tremendous progress towards creating 
a new business environment to enable 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 acumen 
through capacity-building and training is crucial for 
entrepreneurial success. This, coupled with access to 
financial linkages at concessional interest rates, flexible 
repayment options, and waiving of collateral security 
will spur the growth in this sector.
There is an acute need for rural skill and entrepreneurship 
development programmes in rural areas in order to 
increase the skilled workforce of the region, thereby 
increasing the volume of economic activities. This, in 
turn, would lead to an increase in the number of rural 
enterprises in the region and consequently increase the 
percentage of the employed/self-employed population 
in the region. Skilling and entrepreneurship can be 
done through various means. Following are the three 
broad approaches that can be adopted:
1. Skilling and Entrepreneurship Development 
through Project Mode
 This approach encompasses selection of identified 
participants, based on their existing skills, 
geographic locations, and demographic traits. Post 
selection, the participants are given skill training 
and then are provided handholding support.
2. Skilling and Entrepreneurship Development 
through Cluster Development Approach
 Cluster development is another approach in rural ability 
which can create a lot of impact under the cluster 
development approach; a holistic approach is adopted 
to provide both forward and backward linkage. 
Page 4


Kurukshetra       November  2023 46
The author is Advisor (Livelihoods and Entrepreneurship), North eastern, handicrafts and Handloom Development 
Corporation Limited (NEHHDC). Email: sriparnabbaruah@gmail.com
Dr Sriparna B Baruah
ural entrepreneurship is a crucial 
aspect of India’s economic growth 
and development. Rural enterprises 
are business entities that promote revenue generation 
and act as agents of social change at the grassroots level. 
They play a pivotal role in the holistic development of 
the rural economy and contribute to the economic 
growth of the nation. According to official data released 
on April 30, 2022, India has more than 63 million 
MSMEs, out of which about 94% are micro-enterprises. 
The establishment of a large number of profitable 
enterprises in a region can bring in government 
investment, attract private participation, generate local 
employment, form partnerships, secure funding, and 
channelise idle savings into business entities. However, 
R
Sustainability of Rural Enterprises
Opportunities, Challenges and the Way Forward
The background of India’s growth story is directly linked with rural enterprise development. With 
increasing opportunities for enterprise creation in both the farm and non-farm sectors, and special 
emphasis on agro-based and skill-based sectors like the handloom and handicraft sectors, holistic 
interventions of both backward and forward linkage is the need of the hour. 
rural entrepreneurs face several challenges in running 
and scaling their enterprises. These challenges range 
from prevalent societal and gender-based biases to a 
lack of understanding of business, entrepreneurship, 
and access to the requisite skills essential to running 
such enterprises. It is important to understand that 
rural enterprises are the best way to use local resources, 
which can lead to prosperity and economic growth. This 
in turn will spur 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 
are complete. 
47 Kurukshetra       November  2023
Rural enterprises can be broadly classified into two 
types:
? Proprietial ownership
? Group entrepreneurship that includes SHG’s, 
Cooperatives, and Producer companies
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.
Importance of Rural Entrepreneurship in India
Entrepreneurship can play a crucial role in rural 
development. If entrepreneurship is encouraged in 
rural areas, it would stimulate a change in the face 
of rural areas by solving the problems of poverty, 
unemployment, economic disparity, and a low standard 
of living. Rural entrepreneurs play an indispensable part 
in the overall economic development of the country. 
The amplification and enlargement of rural industries 
facilitate self-employment, and helps in the maximum 
utilisation of locally available raw materials and labour.
Importance of rural entrepreneurship is as under:
Resources Utilisation: Rural industries foster the 
appropriate utilisation of local resources like raw 
materials and labour for productive purposes and thus 
enhance productivity. They can also mobilise rural 
savings, which helps enhance rural funds.
• Employment Generation: Rural industries create 
large-scale employment openings for rural people. 
The basic issue of large-scale unemployment and 
underemployment in rural areas can be efficiently 
solved through rural industrialisation.
• Avoid the Migration of Rural Population: Lack 
of employment opportunities, poverty, etc., 
has forced the rural people to head towards 
urban areas for livelihood.  It creates a rural-
urban imbalance. Under these situations, rural 
entrepreneurship can provide employment, and it 
will discourage rural people to migrate from rural 
areas in search of jobs.
• Artistic Activities Promotion: The rich heritage 
of rural India is conserved by protecting and 
promoting handicrafts and art through rural 
entrepreneurship.
• Check on Social Evils: The growth of rural 
entrepreneurship can diminish social evils like 
poverty, the growth of slums, pollution in cities, 
etc. 
• Encourage the Rural Youth: Rural entrepreneurship 
can promote the rural youth and expose them to 
several paths to adopting entrepreneurship and 
promoting it as a career.
• Stimulate Economic Development: Rural 
industrialisation can stimulate the economic 
development of rural areas. This will curb rural 
urban migration and also abate the unsymmetrical 
growth of cities, increase of slums, social tensions, 
social issues, environmental pollutions, etc.  
With the increasing thrust on rural development, some 
positive changes like the following is visible.
• Farming community is becoming aware about 
the value of natural resources.
• Agro-based industries are emerging in rural 
areas.
• Traditional skill-based sectors like Handloom and 
Handicraft have started catering to the niche 
market.
Challenges Faced by Rural Entrepreneurs
While India has marginally improved its ranking in 
terms of ease of doing business, the challenges and 
concerns faced by rural entrepreneurs in running and 
scaling their enterprises persist. The concerns range 
Kurukshetra       November  2023 48
from the prevalent societal and gender-based biases to 
a lack of understanding of business, entrepreneurship, 
and access to the requisite skills essential to running 
such enterprises. 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 that 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, and an 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 of 
technology, and the inability to diversify their product 
range.
To address these challenges, there is a need for a holistic 
approach that combines policy support, infrastructure 
development, and capacity building for rural youth 
entrepreneurs. The State and Central Governments are 
continuously launching new and attractive schemes to 
encourage their citizens to come up with innovative 
business ideas.
Recovery Roadmap
India has made tremendous progress towards creating 
a new business environment to enable 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 acumen 
through capacity-building and training is crucial for 
entrepreneurial success. This, coupled with access to 
financial linkages at concessional interest rates, flexible 
repayment options, and waiving of collateral security 
will spur the growth in this sector.
There is an acute need for rural skill and entrepreneurship 
development programmes in rural areas in order to 
increase the skilled workforce of the region, thereby 
increasing the volume of economic activities. This, in 
turn, would lead to an increase in the number of rural 
enterprises in the region and consequently increase the 
percentage of the employed/self-employed population 
in the region. Skilling and entrepreneurship can be 
done through various means. Following are the three 
broad approaches that can be adopted:
1. Skilling and Entrepreneurship Development 
through Project Mode
 This approach encompasses selection of identified 
participants, based on their existing skills, 
geographic locations, and demographic traits. Post 
selection, the participants are given skill training 
and then are provided handholding support.
2. Skilling and Entrepreneurship Development 
through Cluster Development Approach
 Cluster development is another approach in rural ability 
which can create a lot of impact under the cluster 
development approach; a holistic approach is adopted 
to provide both forward and backward linkage. 
49 Kurukshetra       November  2023
3. Skilling and 
En t r e pr e ne ur ship 
Development through 
Incubation
 Through this approach, 
initially skill development 
training programmes by 
selecting participants 
from various rural areas 
are provided training 
in the incubation centre. After the completion of 
training, based on performance, a few out of the 
trained participants are selected for the incubation 
process. The incubation process is usually for 
a period of six months to one year. During the 
incubation phase, the selected trained participants 
are further given training on product finishing, and 
thereafter they are allowed to generate or develop 
products for sale. They are then given marketing 
and credit linkages with the basic idea of providing 
sustainable self-employment opportunities to the 
incubatees. This, in turn, helps them establish their 
own enterprises and earn their livelihood. 
 Rural enterprises are pivotal for our country’s 
growth, but the challenges are many, such as 
poor infrastructural facilities and the access to 
capital. Though the Government has taken steps 
to counter the challenges, sustained and focused 
efforts are needed. With the right support, and 
access to training and 
finance, we can help rural 
entrepreneurs start and 
grow their businesses, 
create jobs, and drive 
economic development 
in their communities.
Role of the Government
The Government of 
India’s Start-up Village 
Entrepreneurship Programme (SVEP) has been 
initiated with the purpose of assisting entrepreneurs 
to establish their business enterprises in rural India. 
For a nation like India, the role of the Government in 
supporting and scaling rural enterprises is of pivotal 
importance. The Government of India’s Start-up 
Village Entrepreneurship Programme (SVEP) has been 
initiated with the purpose of assisting entrepreneurs to 
establish their business enterprises in rural India. The 
scheme supports existing enterprises as well as new 
enterprises with their unit establishment at the village 
level. Besides helping rural entrepreneurs to access 
finance, a cadre of Community Resource Persons- 
Enterprise Promotion (CRP-EP) is also created to 
provide business support services to rural enterprises. 
It not only aids in the setting up of enterprises, but also 
ensures that sufficient handholding support is offered 
to these enterprises, thereby ensuring their longevity 
in the market.
Rural enterprises are pivotal for our 
country’s growth, but the challenges 
are many, such as poor infrastructural 
facilities and the access to capital. 
Though the Government has taken 
steps to counter the challenges, 
sustained and focused efforts are 
needed.
Page 5


Kurukshetra       November  2023 46
The author is Advisor (Livelihoods and Entrepreneurship), North eastern, handicrafts and Handloom Development 
Corporation Limited (NEHHDC). Email: sriparnabbaruah@gmail.com
Dr Sriparna B Baruah
ural entrepreneurship is a crucial 
aspect of India’s economic growth 
and development. Rural enterprises 
are business entities that promote revenue generation 
and act as agents of social change at the grassroots level. 
They play a pivotal role in the holistic development of 
the rural economy and contribute to the economic 
growth of the nation. According to official data released 
on April 30, 2022, India has more than 63 million 
MSMEs, out of which about 94% are micro-enterprises. 
The establishment of a large number of profitable 
enterprises in a region can bring in government 
investment, attract private participation, generate local 
employment, form partnerships, secure funding, and 
channelise idle savings into business entities. However, 
R
Sustainability of Rural Enterprises
Opportunities, Challenges and the Way Forward
The background of India’s growth story is directly linked with rural enterprise development. With 
increasing opportunities for enterprise creation in both the farm and non-farm sectors, and special 
emphasis on agro-based and skill-based sectors like the handloom and handicraft sectors, holistic 
interventions of both backward and forward linkage is the need of the hour. 
rural entrepreneurs face several challenges in running 
and scaling their enterprises. These challenges range 
from prevalent societal and gender-based biases to a 
lack of understanding of business, entrepreneurship, 
and access to the requisite skills essential to running 
such enterprises. It is important to understand that 
rural enterprises are the best way to use local resources, 
which can lead to prosperity and economic growth. This 
in turn will spur 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 
are complete. 
47 Kurukshetra       November  2023
Rural enterprises can be broadly classified into two 
types:
? Proprietial ownership
? Group entrepreneurship that includes SHG’s, 
Cooperatives, and Producer companies
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.
Importance of Rural Entrepreneurship in India
Entrepreneurship can play a crucial role in rural 
development. If entrepreneurship is encouraged in 
rural areas, it would stimulate a change in the face 
of rural areas by solving the problems of poverty, 
unemployment, economic disparity, and a low standard 
of living. Rural entrepreneurs play an indispensable part 
in the overall economic development of the country. 
The amplification and enlargement of rural industries 
facilitate self-employment, and helps in the maximum 
utilisation of locally available raw materials and labour.
Importance of rural entrepreneurship is as under:
Resources Utilisation: Rural industries foster the 
appropriate utilisation of local resources like raw 
materials and labour for productive purposes and thus 
enhance productivity. They can also mobilise rural 
savings, which helps enhance rural funds.
• Employment Generation: Rural industries create 
large-scale employment openings for rural people. 
The basic issue of large-scale unemployment and 
underemployment in rural areas can be efficiently 
solved through rural industrialisation.
• Avoid the Migration of Rural Population: Lack 
of employment opportunities, poverty, etc., 
has forced the rural people to head towards 
urban areas for livelihood.  It creates a rural-
urban imbalance. Under these situations, rural 
entrepreneurship can provide employment, and it 
will discourage rural people to migrate from rural 
areas in search of jobs.
• Artistic Activities Promotion: The rich heritage 
of rural India is conserved by protecting and 
promoting handicrafts and art through rural 
entrepreneurship.
• Check on Social Evils: The growth of rural 
entrepreneurship can diminish social evils like 
poverty, the growth of slums, pollution in cities, 
etc. 
• Encourage the Rural Youth: Rural entrepreneurship 
can promote the rural youth and expose them to 
several paths to adopting entrepreneurship and 
promoting it as a career.
• Stimulate Economic Development: Rural 
industrialisation can stimulate the economic 
development of rural areas. This will curb rural 
urban migration and also abate the unsymmetrical 
growth of cities, increase of slums, social tensions, 
social issues, environmental pollutions, etc.  
With the increasing thrust on rural development, some 
positive changes like the following is visible.
• Farming community is becoming aware about 
the value of natural resources.
• Agro-based industries are emerging in rural 
areas.
• Traditional skill-based sectors like Handloom and 
Handicraft have started catering to the niche 
market.
Challenges Faced by Rural Entrepreneurs
While India has marginally improved its ranking in 
terms of ease of doing business, the challenges and 
concerns faced by rural entrepreneurs in running and 
scaling their enterprises persist. The concerns range 
Kurukshetra       November  2023 48
from the prevalent societal and gender-based biases to 
a lack of understanding of business, entrepreneurship, 
and access to the requisite skills essential to running 
such enterprises. 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 that 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, and an 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 of 
technology, and the inability to diversify their product 
range.
To address these challenges, there is a need for a holistic 
approach that combines policy support, infrastructure 
development, and capacity building for rural youth 
entrepreneurs. The State and Central Governments are 
continuously launching new and attractive schemes to 
encourage their citizens to come up with innovative 
business ideas.
Recovery Roadmap
India has made tremendous progress towards creating 
a new business environment to enable 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 acumen 
through capacity-building and training is crucial for 
entrepreneurial success. This, coupled with access to 
financial linkages at concessional interest rates, flexible 
repayment options, and waiving of collateral security 
will spur the growth in this sector.
There is an acute need for rural skill and entrepreneurship 
development programmes in rural areas in order to 
increase the skilled workforce of the region, thereby 
increasing the volume of economic activities. This, in 
turn, would lead to an increase in the number of rural 
enterprises in the region and consequently increase the 
percentage of the employed/self-employed population 
in the region. Skilling and entrepreneurship can be 
done through various means. Following are the three 
broad approaches that can be adopted:
1. Skilling and Entrepreneurship Development 
through Project Mode
 This approach encompasses selection of identified 
participants, based on their existing skills, 
geographic locations, and demographic traits. Post 
selection, the participants are given skill training 
and then are provided handholding support.
2. Skilling and Entrepreneurship Development 
through Cluster Development Approach
 Cluster development is another approach in rural ability 
which can create a lot of impact under the cluster 
development approach; a holistic approach is adopted 
to provide both forward and backward linkage. 
49 Kurukshetra       November  2023
3. Skilling and 
En t r e pr e ne ur ship 
Development through 
Incubation
 Through this approach, 
initially skill development 
training programmes by 
selecting participants 
from various rural areas 
are provided training 
in the incubation centre. After the completion of 
training, based on performance, a few out of the 
trained participants are selected for the incubation 
process. The incubation process is usually for 
a period of six months to one year. During the 
incubation phase, the selected trained participants 
are further given training on product finishing, and 
thereafter they are allowed to generate or develop 
products for sale. They are then given marketing 
and credit linkages with the basic idea of providing 
sustainable self-employment opportunities to the 
incubatees. This, in turn, helps them establish their 
own enterprises and earn their livelihood. 
 Rural enterprises are pivotal for our country’s 
growth, but the challenges are many, such as 
poor infrastructural facilities and the access to 
capital. Though the Government has taken steps 
to counter the challenges, sustained and focused 
efforts are needed. With the right support, and 
access to training and 
finance, we can help rural 
entrepreneurs start and 
grow their businesses, 
create jobs, and drive 
economic development 
in their communities.
Role of the Government
The Government of 
India’s Start-up Village 
Entrepreneurship Programme (SVEP) has been 
initiated with the purpose of assisting entrepreneurs 
to establish their business enterprises in rural India. 
For a nation like India, the role of the Government in 
supporting and scaling rural enterprises is of pivotal 
importance. The Government of India’s Start-up 
Village Entrepreneurship Programme (SVEP) has been 
initiated with the purpose of assisting entrepreneurs to 
establish their business enterprises in rural India. The 
scheme supports existing enterprises as well as new 
enterprises with their unit establishment at the village 
level. Besides helping rural entrepreneurs to access 
finance, a cadre of Community Resource Persons- 
Enterprise Promotion (CRP-EP) is also created to 
provide business support services to rural enterprises. 
It not only aids in the setting up of enterprises, but also 
ensures that sufficient handholding support is offered 
to these enterprises, thereby ensuring their longevity 
in the market.
Rural enterprises are pivotal for our 
country’s growth, but the challenges 
are many, such as poor infrastructural 
facilities and the access to capital. 
Though the Government has taken 
steps to counter the challenges, 
sustained and focused efforts are 
needed.
Kurukshetra       November  2023 50
It is fundamental to instill a 
culture of entrepreneurship 
to ensure the establishment 
of rural enterprises. Rural 
Self Employment Training 
Institutes (RSETIs) have 
addressed it by providing 
skill and entrepreneurship 
development training 
programmes to the rural 
unemployed youth, 
thereby assisting them in 
commencing their own 
business units.
The Ministry of Skill 
Development and 
Entrepreneurship (MSDE) is 
also executing the Pradhan 
Mantri-YUVA initiative 
for forming entrepreneurial training and education 
across the country. The MSDE is implementing 
entrepreneurship expansion by supporting existing 
enterprises to scale-up and to capitalise on mentoring 
prospective entrepreneurs. The DAY-NRLM scheme, 
in conjunction with this, also supports group women 
entrepreneurship in rural areas (agriculture and allied 
sector), with market linkages. The Government of 
India, in collaboration with TATA trusts, has established 
a ‘Foundation for Development of Rural Value Chain’ 
(FDRVC), to develop and implement value chain 
projects through the promotion of large-sized producer 
enterprises.
Rural entrepreneurship can also be promoted 
fundamentally by increasing access to the community 
and bridging the gaps in certain areas, like providing 
mentoring by industry experts, establishing incubation 
centres, and conducting ideation workshops, 
hackathons, and other events in Tier 2 and Tier 3 cities 
to spur innovation and entrepreneurial mindsets. 
While the Government of India plays a crucial role, the 
engagement and active participation of civil society 
bodies and NGOs go a long way in institutionalising 
support mechanisms.
In conclusion, developing rural entrepreneurship is 
essential for India’s progress as it augments economic 
and employment growth. It is fundamental to 
ensure that manpower, money, material, machinery, 
and understanding of the 
market are complete for 
the development of a viable 
business model to better 
support aspiring rural 
entrepreneurs.  ?
References
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E n tr ep r en eu r sh i p 
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Das, D. C. (2014). Prospects 
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International Journal of 
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Karimi, S. (2015). Rural entrepreneurship: challenges 
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Santhi, N., & Kumar, S. R. (2011). Entrepreneurship 
Challenges and Opportunities in India. Bonfring 
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Saxena, S. (2012). Problems Faced By Rural 
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Sharma, M., Vandana, C., Rajni, B., & Ranchan, C. 
(2013). Rural Entrepreneurship in DevelopingCountries: 
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Singh, S. R. (2015). Centre to support rural 
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poceddings/track4/track4_paper2.pdf
http://www.mced.nic.in/
There is a scope for enterprise 
promotion through both proprietorial 
ownership and group entrepreneurship 
modes, and experiences need to be 
drawn from successful initiatives. The 
various experiences reinforce the fact 
that a holistic approach to enterprise 
development in the rural sector can 
yield results. Economic empowerment 
through the cluster mode, which entails 
the active participation of all the 
stakeholders, can effectively contribute 
towards the development of rural 
enterprises. The need of the hour is to 
deliberate, debate on these small success 
models, and plan the way ahead.