Rural Enterprenurship: Role of Government

RURAL ENTREPRENEURSHIP:SCOPE & CHALLENGES

Introduction

• In the present scenario ,the rural areas are source of raw materials and the urban areas are acting as processing centers.

• Establishment of micro or household industries in rural areas can break the cycle of poverty .

• This will not only bring prosperity but also provide employment to youth and landless people.

• The present discussion will be focused on issues related to prospects and problems related to entrepreneurship in rural areas and also the various activities which can be taken up without huge investment and specialized know-how.

Introduction• “Rural Entrepreneurship can be defined as

entrepreneurship emerging at village level which can take place in a variety of fields of Endeavour such as business, industry, agriculture and acts as a potent factor for economic development”.

Scope of Rural Entrepreneurship• Rural area as SME Sector and Economy Builder• Employment and income for poor and unemployed people• Contributing more than 52% of the GDP• A rapid expansion in the small and medium industry

arena.

Scope of Rural Entrepreneurship• Repair shops, service centers, PCO, internet café, hiring

of agriculture implements & tractor, computer and other skill training centers have good scope in cluster of villages.

• Success of the e-Chaupals has opened door for replication of this model.

• Entertainment, cable TV ,rural tourism and amusement parks (near urban areas) are also some of the potential areas for entrepreneurs in service sector

• Various development programs are being executed through Panchayti Raj Institutions, who are engaging contractors for civil /mechanical works. Rural youth can enter into this business.

• Changed consumption pattern has opened doors for trading activities in rural areas.

• Rural areas are also consuming large amount of agriculture inputs such as fertilizers, seeds, pesticides and insecticides etc.

Scope of Rural Entrepreneurship

Some known facts of MSME’s• Employ 41 Million People• Number – 26 Million MSMEs• Give 45% of Industrial Production • Account for more than 40% of Exports • Contribute 8% to GDP• Exports: Rs. 1.5 lakh cr. ($ 38 Bn)• Production: Rs. 5.9 lakh cr. ($ 140 Bn)

Region Wise Disbursement of Refinancing (in Cr.)

• Year: 2010-2011Total: Rs12,980Disbursed: Rs13,485.87

• Year: 2011-2012Total: Rs14,995Disbursed: Rs15,421.70

• Year: 2012-2013Total: Rs16,990Disbursed: Rs177674.29

0

10

20

30

40

50

60

2010-2011

2011-2012

2012-2013

Northern North-Estern Eastern Central Western Southern

Reason-Wise Distribution of Refinancing

Obstacles and Challenges for Entrepreneur in India• Lack of Knowledge• Financial Challenges• Lack of Infrastructure• Family & Social Challenges• Technological Challenges• Policy Challenges

Involvement of Government • National Agricultural and Rural Development Bank

(NABARD)• Small Industries Bank of India (SIDBI)• Government Schemes to Enhance Rural

Entrepreneurship• Rural Entrepreneur Development Programme(REDP)

12

Supply side – Microfinance Activities

• Help transform NGOs/Societies

etc. to more regulated entities.

• Associated with more than 150

MFIs

• Introduced the concept of rating

of MFIs

• Term loans

• Equity / Quasi Equity

• Capacity Building Grants

Demand Side – Promotional & Developmental Activities

• Enterprise promotion programs

• Skill-cum-Technology Upgradation

Programme

• Cluster Development Programme

(CDP)

• Entrepreneurship Development

Programme (EDPs)

Role of SIDBI

Bihar

Himachal Pradesh

Orissa

Uttar Pradesh

Andhra Pradesh

Average Cost per REDP and per Trainee in different state

Conclusion• Rural entrepreneurship programmes must be carried in

such a way so that it can be opted by rural youth as a career.

• Introduction of policies of government among rural youth to raise innovation level.

• Various incentive monetary and subsidies should be given to rural entrepreneurs. (some farmer do not plant certain type of crop in there farm land therefore government has planned to give them subsidies and higher market value if they plant particular crop).

•

Questions?