Rural Entrepreneurship


Rural entrepreneurship have different meanings 2 different people. It can be simply defined as entrepreneurship emerging in rural areas is rural entrepreneurship. In other words rural entrepreneurship refers to establishment of industrial units in the rural areas.
Rural Industries are generally associated with agriculture. According to the Khadi and village Industries Commission (KVIC),”village industry or rural industries means industries located in rural area whose population does not exceed 10000 or any such figure that provides goods or renders any services with or without use of power and in which the fixed capital of an artisan or a worker does not exceed a thousand rupees.”

This definition of village industry has been recently modified by the government so as to enlarge its scope. Therefore any industry which is located in rural area , village or town having a population of 20000 and below and an investment of Rs. 3 crores is termed as village industry.

All the village industries have been grouped into seven major categories which are as follows:
1) Mineral based industry ,
2) Forest based industry ,
3) Agro based industry ,
4) Polymer and chemical based industry ,
5) Engineering and non conventional industry ,
6) Textile industry (including Khadi) , and
7) Service industry

Need for Rural Entrepreneurship

A) Labour intensive: Rural Industries have high potential Employment generation. Thus they serve as an antidote to the widespread problems of unemployment.
B) Income generation rural Industries have high potential of income generation in rural areas. Thus it helps in reducing disparities and income between rural and urban areas.
C) Balanced regional development these industries encourage dispersal of economic activities in rural areas which helps in promoting balanced regional development.
D) Village republics Development of industries in the rural areas also helps in building up village Republic.
E) Art and creativity rural industries also helps in protecting and promoting the art and creativity i.e. the age old rich heritage of the country.
F) Environment friendly rural Industries being eco friendly lead to development without destruction.

Problems of Rural Entrepreneurship

  1. Lack of awareness about the importance of developing industries in rural areas.
  2. Disinterest of rural people towards assuming the career as an entrepreneur.
  3. Rural people general you want to take-up salaried employment because of assured income. Use of obsolete Technology, machine, and equipment.
  4. Unawareness of rural people about entrepreneurial opportunities available.

How to Develop Rural Entrepreneurship?

The following are some of the measures suggested for developing entrepreneurship in the rural areas in the country :

  1. Raw material: the availability of raw material is a must for any industry. It is clear from the past experience that rural Industries having employment potential cannot be sustained for long unless a strong raw material base is created in rural areas itself.
  2.  Finance: it is considered as lubricant for setting up and running an industry. Therefore finance need to be available on time for those who really need it.
  3.  Entrepreneurial education: it is one of the effective ways to inculcate the entrepreneurial Acumen and attitude impart entrepreneurial education in schools, colleges, and Universities.
  4.  Unawareness: of facilities the main problem in setting up industries is not the unavailability of facilities but non Awareness of facilities whatever are available. Therefore there is a need to disseminate information about all that is available to provide to the entrepreneurs to facilitate them in setting up of the industries.
  5. Set up modern infrastructure: Solve the problem of marketing for rural industries there is a need to set up common production-cum-marketing centres and developed with modern infrastructural facilities in the areas having good production and growth potential that helps in promoting export business.

NGOs and Rural Entrepreneurship

The NGOs involved in entrepreneurship development can be categorised into three main types:

  1. Primary level NGOs: the NGOs who mobilise their own resources, operates at international level and execute developmental activities themselves or through any immediate fall in this category.
  2. Intermediate NGOs: these NGOs procure Finance from different Agencies and then imparts training, and conduct workshops for the target workforce.
  3. Grass root level NGOs: these NGOs conduct field activities establishing a direct contact with the needy (Grass root) people.

The training imparted by the NGOs to the needy can be categorised into three broad types:

  1. Stimulation: conduction of EDP s and training programs for the target people to stimulate the enterprising attitude among them.
  2. Counselling: Providing Consultancy Services and counselling to the needy about how to prepare a project, purchase of plant and machinery, feasibility report, and performing are the procedural activities.
  3. Assistance: providing assistance to the target group about marketing the product and servicing Finance from Financial Institutions.

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