This document discusses agriculture-based rural entrepreneurship in India. It begins by defining entrepreneurship and the qualities needed for rural entrepreneurship. It then compares rural and urban areas, noting advantages of rural areas like lower costs but also challenges like lack of infrastructure. The document outlines various government strategies over different five-year plans to promote rural industries and discusses factors that have limited their growth. It proposes ways to move forward, such as leveraging opportunities in organic and natural products. Finally, it discusses ownership patterns for rural enterprises.

1. Agriculture Based Rural
Entrepreneurship
Dr. S. K. Goyal
Assistant Professor in Agril. Process & Food Engg.,
Department of Agricultural Engineering
Institute of Agricultural Sciences,
Banaras Hindu University, Varanasi (U.P.)
Email: skgoyal@bhu.ac.in

2. To be discuss….
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Introduction
Concept of entrepreneurship
Rural vs urban
Rural advantage
Basic training for prospective rural entrepreneur
Benefits of rural enterprises to nation
Government strategies
Factors responsible for limited growth
How to move forward
Ownership pattern
Gathering ideas

3. •
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Gathering information
Project report
Sources of finance
Legal requirements
Marketing issues
Training/skill development /HRD
Basic infrastructure
Opportunities for rural entrepreneur
Rural technologies
PURA and rural enterprises
Way ahead
Conclusion

4. INTRODUCTION
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The farming activity is itself an example of
entrepreneurship as it has all elements of an enterprise
i.e. land, labour, process, technology, inputs, finance, risk,
marketing etc.
Our farmers invest money, labour and inputs to get the
final out put i.e. harvest/produce.
However, the income level of the farmers/rural people is
much lower than the urban people.
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We have discussed various reasons while learning about
processing and marketing etc.
Sometimes, it is said that risk taking capacity of rural
people is lower than the urban people, which is not
correct.

5. Contd…
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Agriculture itself is a high risk low return activity, and
farmers are taking risk year after year to increase the
agriculture production.
The farmers can prove to be better entrepreneurs if proper
training is provided
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Several advantages are there in rural areas specially in
respect of agro-products, animal husbandry, poultry,
fishery related enterprises, etc.
Since the farming is seasonal activity, the farmers can
start and run small and micro enterprises.
In the present scenario, the rural areas are source of raw
materials and the urban areas are acting as processing
centers.
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6. Contd…
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Prosperity will not come to rural areas unless the value
addition takes place at the rural areas itself.
The absence of entrepreneurship in rural areas is main cause
of poverty in rural areas.
The farmers are at loss whether, it is bumper crop or famine.
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 energy of womenfolk can be used for productive purpose
with establishment of small and micro enterprises in rural
areas.
This will also result in saving of huge amount of energy in the
form of transportation of bulky raw materials and manpower
going daily to nearby urban areas for employment.
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7. CONCEPT OF ENTREPRENEURSHIP
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Entrepreneurship is the act of being an entrepreneur, who
starts any economic activity for being self-employed.
An entrepreneur is defined as “person in effective control of
commercial undertaking; one who undertakes a business or
an enterprise”.
Entrepreneur is an innovative person who maximizes his
profits by following new strategies or venturing into new
products or services.
The following qualities are important for any person to
become an entrepreneur.
1.Motivation: Self motivated persons with desire to
perform better.
2.Energetic: capacity to work for long hours.

8. Contd….
3. Creative: finding simple solutions rather than discussing
problems.
4. Flexibility: as the business environment is dynamic, demand,
supply, products etc. keep changing rapidly, flexible approach
is required.
5. Analytical powers: keeping the risk and uncertainty involved in
business, the analytical power is required to calculate the risk
take appropriate measures to manage it.
6. Leadership: since various people are involved in business at
various levels, leadership qualities are needed to bind them as
an organization.
7. Vision: Since the enterprise is considered to be “going
concern”, the person handling the business must have vision
towards future and take steps to avoid redundancy.

9. Contd….
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In a typical rural scenario the person has to deal with
problems of infrastructure.
The socio–economic set up in rural areas is different and
the person of rural background will have advantage.
Similarly, knowledge of local language and customs is also
necessary for any entrepreneur.
A farmer owning and cultivating land in same village will
be ideal person to start a micro or medium enterprise.
Taking advantage of forward & backward linkages is key
to success for any rural entrepreneur.
The qualities already described are only indicative, in addition
to those indicated a rural entrepreneur should have additional
qualities:
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10. Characteristics of Rural Entrepreneur
• Risk takingability,
• Self-confidence,
• Decision making ability,
• Knowledge of growing technology,
• Creativity,
• Initiative,
• Economic motivation,
• Market orientation,
• Ability of co-ordination related activities,
• Achievement,
• Motivation etc.

11. 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”.
 Industries coming under the purview of KVIC are
treated as rural industries.

12. Rural Industries under KVIC Purview
 KVIC has broadly re-grouped the various village industries
for the purpose of implementation of its programmes which
includes the following :
 Mineral-Based Industry
 Forest-Based Industry
 Agro-Based and Food-Based Industry
 Polymer and chemical-Based Industries
 Engineering and non-conventional energy-based Industries
 Textile Industry
 Service Industry.

13. Types of Rural Entrepreneurship
Individual Entrepreneurship: It is basically single
ownership of the enterprise.
Group Entrepreneurship: Partnership, private limited
company and public limited company.
Cluster Formation Entrepreneurship: NGOs, VOs, CBOs,
SHGs and even networking of these groups.
Cooperative Entrepreneurship: It is an autonomous
association of persons united voluntarily for a common
objective.

14. RURAL Vs URBAN
Agriculture as primary
occupation.
Generally under-
employed people
Lack of infrastructure
Low cost of labour and
land
Cheap local raw materials
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• Variety of occupation
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People having more than
one employment
Over burdened infra
High cost of labour and
land
Costly raw materials

15. •
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Poor education and
training facilities
More prone to natural
disasters
Difficult access to
technology
High marketing cost
Poorly organized
Migration of talent to
urban areas
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Better education and
training facilities
Less prone to natural
disasters
Easy access to new
technology
High production cost
Highly organized
Over population due to
migration
(Contd..)

16. RURAL ADVANTAGE
Having gone through the advantages and disadvantages of rural areas as
far as establishment of agro based industries is concerned we may
observe that following type of industries can be established in rural areas:
a) Labour intensive: food processing, herbal medicines, assembly
units etc.
b) Space intensive: biomass based (paper/pulp), livestock based etc.
c) Low capital: small, tiny and cottage industries like handicrafts etc.
d) Industries without power: like vegetable dyes, terracotta etc.
e) Seasonal: like sugar, khandsari production
f) Service based: service centers for agriculture implements, e-
chaupals etc.
g) Skill training based: SDCs, PMKVY, DDUGKVY, ASCI, small
computer training centers and other skills in demand.

17. Types of Rural Industries
All the village industries come under the following broad categories:
1)Agro Based Industries: Sugar industries, Jaggery, Oil processing from oil seeds,
Pickles, Fruit juice, Spices, Dairy products etc.
2)Forest Based Industries: Wood products, Bamboo products, Honey, Coir industry,
Making eating plates from leaves.
3)Mineral based industry: Stone crushing, Cement industries, Red oxide making, wall
coating powders etc.
4)Textile Industry: Spinning, Weaving, Colouring and Bleaching.
5)Engineering and Services: Tractors and Pump set repairs etc. Small and medium
sized industries to produce agricultural machinery, equipment for usage in rural areas
etc.
6)Handicrafts: These include making of wooden or bamboo handicrafts that are local
to that area, traditional decorative products, toys and all other forms of handicrafts
typical to the region.
7)Services: There are a wide range of services including mobile repair, agriculture
machinery servicing, etc which are being undertaken under this category.

18. BASIC TRAINING FOR PROSPECTIVE RURAL
ENTREPRENEUR
• Don’t require MBAs to run or start rural enterprises.
• Some basic training is necessary for rural people to
become prospective entrepreneur.
• Motivation through success stories and actual visits to
successful enterprise in the area
• Information related to government agencies and their
role
Systematic way of identifying opportunity
Access to model projects or sources for preparation of
project reports
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19. Contd…
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• Sources of finance
Government programmes or subsidies
Knowledge of accounting
Training in the area selected
In a dynamic environment things are changing too
fast and latest information must be collected by
person.

20. BENEFITS OF A.B. RURAL ENTERPRISES TO
NATION
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The trend of establishment of rural industries will
reverse the migration to urban areas.
The ever increasing slums in urban areas will be
reduced.
The crumbling infrastructure of urban areas will get a
reprieve.
Nation will save huge sum of money in form of fuel.
The reduced cost of production may result in higher
exports and import substitution of small value goods.

21. Contd…..
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It will unlock potential of crores of under - employed
people and increase the GDP of nation.
Use of non conventional sources of energy will be
encouraged as vast potential for use of bio-gas, solar
energy, wind and water energy exist in rural areas.
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The large amount of agriculture, horticulture and
animal husbandry related produce going waste will
be gainfully utilized.
Public Investment in rural infrastructure will give
higher returns and it will encourage private
investment.

22. GOVERNMENT STRATEGIES
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Mahatma Gandhi was one of the prime supporters of
khadi and village industries even before industries.
One of the basic philosophy was to keep the three
basic needs of human beings out of purview of
mechanization to generate employment i.e. food,
shelter and clothing.
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After independence, the development strategies were
worked out in the form of five year plans.
First Five Year plan: Boards were created for
development of six specific rural sectors i.e. khadi,
coir, silk, handicrafts, handlooms, small industries.

23. Contd….
• Second Five Year Plan: Role and activities of KVIC
increased. Items reserved for small scale industries.
Technologies resulting in unemployment were
discouraged.
• Third Five Year Plan: cluster development
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approach initiated, training and skill development
projects were launched. Rural Industries Project
was launched.
Fourth Five Year Plan: emphasis on quality and
financial viability of rural industries. Provision of
financial assistance to KVIC for various
programmes.

24. Contd….
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Fifth Five Year Plan: Agriculture was given less
importance as compared to industries.
Sixth Five Year Plan: Programmes named IRDP and
TRYSEM were launched to promote rural
entrepreneurship. The programme introduced the
concept of subsidy and self employment first time to
rural people.
Seventh Five Year Plan: The strategy of the plan was
to enhance the level of earnings of small enterprises
by providing assistance in the form of technology,
entrepreneurship skills and finance.

25. Contd….
• Several dedicated institutions like Small Industries
Service Institute, National Institute of Small
Industries, Extension and Training, National Institute
of entrepreneurship and small business
development, NSIC, DIC etc were activated to
provide extension service to small industries.
• Eighth Five Year Plan: The focus was shifted from
rural & cottage industries and era of reforms started.
The emphasis was to invest in infrastructure and
catalyze the growth. Private investment welcomed
in all sectors. Reserved items were removed from
list one by one.

26. Contd….
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Ninth Five Year Plan: agenda of globalization was taken
further. Separate ministry was created for small scale and
agro industries. Marketing support for KVI products was
planned.
Tenth Five Year Plan: Cluster based development was
proposed with financial assistance from KVIC, NABARD,
SIDBI and CAPART.
Eleventh Five Year Plan: Technology up gradation, skill
development and quality improvement with focus on
employment generation.
Twelfth Five Year Plan: Skill Development and placement
in Jobs.
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27. Factors responsible for limited growth
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• Subsidy and target oriented programmes encouraged people to
some how avail the subsidy and the enterprise could not sustain for
long.
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Technology developed at faster rate and the rural people could not
get the benefits.
The electronic media diverted the attention of youth from enterprise
to wage employment or jobs for easy life, it also promoted migration.
The limited infrastructure expenditure was concentrated to urban
areas as private investment was not allowed.
The image of rural enterprise was limited to “khadi cloth”, “achar –
murabba” or “kachhi ghani oil”, which resulted in rural areas
becoming source of raw materials only.
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28. HOW TO MOVE FORWARD
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We have discussed about the past and problems, but future of
rural industries is bright.
The growing concern about environmental degradation and
reducing carbon emission opens a flood gate of opportunities
for rural industries, low technology, low energy intensive and
natural products.
Increasing interests in organic products, chemical free
cosmetics and vegetable dyes etc can open a flood gate of
opportunities for rural industries.
As we know, export of small items from toys to school bags has
boosted Chinese economy and made it a world leader in
economic development. Now, it’s our tern……

29. • The options, sources of finance and technologies
available to youth for starting new enterprise.
• As and when a person decides to start an enterprise,
he/she has choice to take up any of the following:
1. Manufacturing or processing
2. Trading, retail sales, distribution etc.
3. Service sector
4. Contracting
5. Combination of above activities

30. OWNERSHIP PATTERN
The rural enterprise can be owned in one of the following
ways:
• Individual ownership: in most of the cases, this
pattern is there.
• Partnership or private limited companies: when the
business grows, the above formations take place for
expansion).
• Cooperatives: these institutions have legal identity and
formed by willing people for achieving a common goal.
• Group ownership: It includes NGOs, VOs, JLGs

31. • The groups like, self help groups though do not have
formal structure but they can run an enterprise and also
eligible for bank finance.
• The choice of ownership pattern will depend on the type
of business activity and requirement of manpower or
money required for the particular enterprise.
• For example, a forest produce based activity is generally
taken up by group of persons in form of cooperatives or
self help groups.
• However in case of trading, the best structure is
individual ownership.

32. Proprietorship or individually owned
enterprises
• In this case the individual called Proprietor is absolute
owner of the enterprise. His liability is 100%.
• This structure is best suited for small enterprises where
capital requirement is low and many legal complications
are not there.
• The sense of ownership and passing the business to next
generation are best motivators.
• However ,this type of organizations have limited access to
the bank funds and no access to public funds in form of
shares.

33. PARTNERSHIP
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Partnership can have maximum 20 persons as partners
working together for common goal and objective.
The firms are governed by Indian Partnership Act 1932.
The partners can take advantage of best abilities of each
other and pool the resources for enterprise.
It is always better to have a written agreement to avoid
any legal issues later on.
The partnership fail when the duties and responsibilities of
partners are not clearly defined.

34. PRIVATE LIMITED COMPANY
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The private limited companies can have 2-50 shareholders.
The liability of the shareholder is limited in this case ,as the
personal assets are separate from the assets of the
shareholders.
The promoters of public limited companies have better control on
day to day affairs of the company.
The private limited companies have better access to bank
finance .
This type of organization is suitable for medium level business.

35. NGOs / VOs
• A group of 7 or more persons can start NGO for public service
and specific objective.
• The NGOs are registered under Society’s Registration Act
1860.
• Specific rules and regulations are formulated to manage the day to
day affairs of NGOs.
• These organizations can receive government grants or public
donations.
• The voluntary organizations are registered under any of the act
like Indian Trust Act, Society’s Registration Act etc.
• These organizations are promoted by self motivated, social
service oriented people.

36. SELF HELP GROUPS (SHGs)
• These are informal groups of 10-20 persons from below
poverty line families.
• The groups are formed for mutual help and people pool there
small savings for mutual benefits on agreed terms.
• The groups are eligible for bank finance and can graduate
into joint liability groups for starting rural enterprises.
• Various schemes of GOI & NABARD are available for the
SHGs so that the members can come out of the cycle of
poverty.

37. COMMUNITY BASED ORGANIZATIONS
• The CBOs are also informal organizations.
• They come together for common cause or objective,
however there economic status may be different.
• They also receive funds from various donors and GOI.
• There is no liability on part of members as the donor
agencies make necessary enquiries before release of funds.

38. CO-OPERATIVES
• These are association of persons coming together for common
objectives, and the organizations are controlled by elected
boards and functioning of organization is based on democratic
principles.
• There could be different types of cooperatives like producers,
marketing, credit or housing etc.
• The cooperatives could be single state or multi state.
• The success of AMUL in milk processing and marketing is an
example for entire world but we could not replicate the
same….why??

39. FPOs
• A FPO, formed by a group of farm producers, is a registered
body (under the Indian Companies Act) with producers as
shareholders in the organization.
• It deals with business activities related to the farm produce and it
works for the benefit of the member producers.
• It helps in the collectivization of small, marginal and landless
farmers in order to give them the collective strength to deal with
such issues.
• Members of the FPO will manage their activities together in the
organization to get better access to technology, input, finance
and market for faster enhancement of their income.

40. Gathering ideas
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Either the entrepreneur himself acts as innovator or he can
contact certain institutions to get business ideas suitable for
rural areas.
The following institutions are dealing in this area:
1. MSME, MoFPI, Startups,
2. KVIC
3. NABARD
4. SIDBI
5. Extension Centers and Agri Business incubators of Agriculture
Universities
6. NIDC, NIESBUD
7. Technical Consultancy Organization of State
8. Centers for Entrepreneurship Development
9. Development Commissioner, Handicrafts/ Cttage Industries

41. Contd…..
Some institutions are dealing purely in business ideas related
to agriculture produce:
1. ICAR & ITS EXTENSION CENTERS (KVKs)
2. CFTRI, NIFTEM, IIFPT, IIP etc.
3. NHB
4. NATIONAL MEDICINAL PLANT BOARD
5. APEDA
6. NATIONAL INSTITUTE FOR ORGANIC FARMING
7. NBRI
8. CIMAP
9. FLAVOURS & FRAGRANCES DEVELOPMENT INSTITUTE
ETC.

42. GATHERING INFORMATION
Once a person decides to start a business, he has to gather
certain information related to business whether external finance is
involved or not:
1. Similar enterprise in area and its viability.
2. Availability of raw materials (nearby/source)
3. Technology or know how
4. Availability of labour and skilled persons
5. Marketing channels
6. Related government policies/promotional scheme
7. Prospective buyers and demand pattern etc.

43. PROJECT REPORT
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Once an entrepreneur confirms the type of enterprise
proposed to be established he/she will have to make a
project report even if institutional finance is not involved.
The project report helps the person to take objective
decisions and also compare the data at the time of
planning and actual implementation.
The following information is required for a typical rural
enterprise:

44. Contd….
2. Demand for the item, planned capacity and production
schedule
3. Source of raw materials, present cost and approximate
quantity required.
4. Technology and skill required including cost
5. Manpower requirement
6. Cost of building, plant and equipments
7. Recurring expenditure
8. Finance required at initial stage and the source
9. Financial appraisal showing viability of the project by
methods such as IRR, BCR etc.
1. Name of entrepreneur and nature of the enterprise.

45. SOURCES OF FINANCE
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All entrepreneurs are not financially sound and may
require assistance from financial institutions or banks for
the project.
Various sources of finance are:
1. Commercial Banks
2. Cooperative Banks
3. Agriculture and Rural Development Banks
4. Regional Rural Banks
5. SIDC of various states
6. Non Banking Finance Companies
Subsidies are also available under various government
schemes.

46. LEGAL REQUIREMENTS
• Though the household and cottage industries do not require
any registration, the small scale industries require
registration with DIC.
• Registration with Trade Tax, Service Tax etc. is also required
depending on nature of work
• In case the enterprise can be classified as industry, the
following laws are also applicable:
– The Factories Act
– The Industrial Dispute Act

47. • Minimum wages act
• Payment of gratuity act
• ESI Act
• Payment of wages act
• Payment of Bonus Act
• Prohibition of child labour
• Pollution control act
• Other specific laws applicable to various type of
activities
The following laws are applicable even if the enterprise is not
classified as industry:

48. Marketing
• Marketing of rural produce is prime concern for the rural
entrepreneurs.
• The rural areas act as markets for the person choosing
service industry or trading as business.
• However, the urban areas and other villages act as markets
for the manufacturing or producing enterprises.
• Some of the rural products even have export markets .
• Depending on the type of products market mix can be
planned.
• Direct marketing to bulk consumers (e.g. hotels for primary
or secondary processed foods) through contacts.
• Marketing through retail outlets of KVIC.

49. (Contd..)
• Participating in mela, haat or exhibitions
• Direct sales to whole sellers/exporters
• Direct sales to industries in advance processing field like
Ayurvedic Medicines
• Marketing through cooperative marketing system like Amul
• Online Marketing
• Marketing through Mega Retail Stores like Spencers (e.g.
high tech agriculture produce, cut flowers, ready to cook
vegetables etc.)
• Marketing through Government Emporium (handicrafts,
handloom items, silk items)
• Direct marketing through weekly market in rural/urban
areas.
• Taking supply contracts from bulk buyers like Army etc.

50. Traditional and developed markets

51. Training/skill development
Specific skills development or area specific training
institutes are conducting training for youth, such as;
1. CIMAP for medicinal plants
2. NBRI for floriculture
3. CFTRI for food processing
4. NIRD for rural technology related projects
5. NABARD is sponsoring various skill training
pogrammes through NGOs.
The intending youth can get details from various web
sites and News Papers or contact Kisan Help Line
• Every entrepreneur should undergo specialized training
before entering into a venture specially manufacturing,
service or high tech agriculture.
•
•

52. Training
of the
Entrepreneurs

53. Basic infrastructure
• The minimum requirements are indicated
below:
– All weather roads
– Electricity
– Water supply
– Telecommunications
– Banking
– Medical etc.

54. Opportunities for rural entrepreneur
The number of opportunities existing in
rural area are unlimited, considering its
area, population, bio diversity and
different agro climatic zones.

55. Opportunities for rural entrepreneur
• Agriculture farm
• Tree farm
• Organic fertilizer
production
• Fertilizer distribution
• Dry flower business
• Mushroom farming
• Poultry farming
• Hydroponic retail store
• Organic greenhouse
• Cultivation of MAPs
• Ornamental plants
• Corn Farming
• Goat Farming
• Beekeeping
• Fish farming
• Snail farming
• Fruit and Vegetable production
• Fruit and Vegetable export
• Become a florist
• Broom production
• F&V processed products
• Soil Testing
• Dairy farming
• Processing Industries
• Certified Seed Grower or Dealer
• Agriculture consultancy
• Agro blogging, etc.

56. Agriculture based enterprise
• Organic farming: the demand for organic
products is increasing day by day.
• The certified organic products have good export
potential.
• All inputs are available in rural areas ,if number
of farmers take up this activity ,trading is another
option for entrepreneurs.
• Floriculture: good demand exist in urban areas.
If the village is located near to urban areas ,cost
of transportation will be low.

57. Organic farming and floriculture

58. (Contd..)
• High tech agriculture: Production of exotic vegetables, off-
season vegetables, mushrooms etc are covered under this.
The demand for the produce is increasing with increase in
income of middle class.
• Medicinal plants: demand for cultivated medicinal plants is
increasing due to reduced availability of medicinal plants
from forest.
• Ayurvedic drug manufacturers are also entering into
contracts with farmers for supply of medicinal plants.
• Aromatic plants: demand for natural perfumes is increasing
due to health issues related to chemical products. This has
open gate for commercial production of aromatic plants.
• Commercial forestry: waste lands not fit for agriculture can
be used for commercial forestry. Plants like eucalyptus,
poplar, bamboo etc can be raised. Paper mills, matchstick
manufactures and furniture makers are buying these items.
The bamboo tree can be utilized for more than 30 products.

59. Medicinal plants and spices

60. Food processing & agro waste based business
• Food processing is most preferred activity for rural
entrepreneurs.
• The value addition is considerable and the market is open
and expanding.
• We have already discussed this topic in detail.
• Millions of tons of agro waste is burnt every year.
• Simple option is to convert the waste into briquettes which
can be burnt in place of coal/wood in various rural /urban
industries.
• Several other products such as rice bran oil, Gum from
tamarind seeds etc. can be extracted at commercial scale.
• There are several other products like hand made paper,
board, packing paper and corrugated paper boards etc. which
can be made in rural areas.

61. Food Processing

62. Farm Inputs
• Presently our farmers are over dependent on chemical
fertilizers for farming operations.
• The farmers can produce several organic fertilizers like
compost, vermi –compost, neem based and other herbal
pesticides etc on commercial scale for own use and sale in
urban/ rural areas.
• The matter has been covered in details in organic farming
module.
• The products are very low energy consuming and use raw
materials which are otherwise waste.

63. Animal husbandry based Enterprises
• Dairy is most popular and organized rural enterprise, this can start
from 2-3 animals to hundreds of animals .
• Processing and distribution of milk is related business.
• It is expected that milk production in terms of money will cross the
paddy very soon.
• The next popular enterprise is poultry.
• In addition to sale of eggs and the poultry birds, the poultry feed
industry is also a viable enterprise.
• In addition to the produce from living animals, certain rural industries
are based on the residue of dead animals like bones and hide etc.
• The commercial rearing of various animals like pigs, sheep, goats and
rabbits for wool and meat is also a popular enterprise in rural areas
where grass is easily available.

65. Sericulture/Apiculture
• Sericulture is very popular in certain pockets of India and is
an old profession.
• The silk garments are very popular and the sericulture can
be taken up on commercial scale as there is no problem in
sale of raw as well as processed silk.
• Apiculture on commercial scale is gaining popularity not only
for direct domestic sale but also for export .
• The honey bees also contribute towards pollination thereby
increasing agriculture production.

66. Aquaculture
• Aquaculture can be practiced in any part of the country
where water is available.
• The waste lands, degraded lands and closed brick kilns can
be converted into fish tanks
• It can also be practiced with other allied industries like
poultry as waste of one can be used in other.
• In costal areas, the shrimp or prawn culture is also popular .

67. Traditional handicrafts
• India is famous for traditional crafts based on skills and local
materials.
• There is huge export market for crafts and traditional
products.
• Those interested in trading can buy the products from small
manufactures and sell it in urban markets.
• The cooperatives or self help groups of producers can also
take up trading activity.

68. Handloom/Power loom/Khadi
• This sector is providing employment to lakhs of rural people
presently, but only traders from urban areas are benefited
from sale of the items produced by rural people .
• If the cooperatives or self help groups of weavers can take up
this activity, the benefit will go to rural people.
• Similarly the rural entrepreneurs can also take up this activity
by value addition like ready made garments .
• Huge export potential exist in EU for the hand woven,
vegetable dye products without quota restrictions.
Khadi - Charkha to ready made

69. Edible oils
• India is an exporter of edible oils.
• Production, extraction, packing, certification etc are potential
areas having good demand.
• The by- products of oil extraction industry can be used for
animal feed industry.
• Some of the by-products can be used for making several
health products for human consumption like de-oiled ground
nut powder, coconut husk, soy bean etc .

70. Service sector
• Service sector, growing at a high rate in urban areas, has
good potential in rural areas also.
• Repair shops, service centers, 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

71. An opportunity in Service sector
E-chaupal

72. Service sector and Small units
create employment

73. Trading/ Contracting
• Changed consumption pattern has opened doors for trading
activities in rural areas.
• Demand for FMCGs as well as consumer durables etc is
increasing.
• Rural areas are also consuming large amount of agriculture
inputs such as fertilizers, seeds, pesticides and insecticides
etc.
• Various development programmes are being executed
through Panchayti Raj Institutions, who are engaging
contractors for civil /mechanical works. Rural youth can enter
into this business.
• Various banks, financial institutions and other extension
agencies are executing programmes through NGOs.
• Educated rural youth having social service inclination can
form NGOs/VAs for dual purpose of social service and
business like activities.

74. RURAL TECHNOLOGIES
• There are many sources for getting technology inputs for
establishing a rural enterprise however the Directory of Rural
Technologies published by NIRD, Hyderabad is very useful.
• The book in three volume covers technological inputs for
construction, hi-tech agriculture, fertilizers, fisheries, post –
harvest technologies, mechanical works, leather technology,
water conservation, natural dyes, solar heaters and cookers,
bio-gas, food processing etc and is very useful for prospective
entrepreneurs.

75. PURA and Rural Enterprises
• PURA aims at all types of connectivity within rural clusters.
• If the programme like PURA is implemented in India, we will
be able to see changed rural landscape.
• It will give tremendous boost to Rural Industries and
Infrastructure.
• Developed infrastructure will attract the rural youth to come
back to rural areas, this will also generate employment in
service sector.

76. Problems faced by the rural entrepreneurs
Some of the major problems faced by rural entrepreneurs are
classified as under:
I. FINANCIAL PROBLEMS:
a) Lack of funds
b) Risk bearing Capacity
c) Poor infrastructure facilities
II. MARKETING PROBLEMS:
a) Limited scale and scope of local market opportunities
b) Lack of market information due to poor communication facility
c) Competition
d) Middleman
e) Low quality products

77. Conti…
III. MANAGEMENT PROBLEMS:
a)Lack of IT knowledge and Technical Skills
b)Non availability of skilled labours
c)Legal Formalities
d)Procurement of Raw materials
e)Lack of training facilities and extension services
f)Poor Quality of Products
IV. HUMAN RESOURCE PROBLEMS:
a)Low Skill Level of Workers
b)Negative Attitude
V. OTHER PROBLEMS:
a)Political and structural problems
b)Poor knowledge in the maintenance of accounts
c)Low Purchasing power
d)Adverse social, cultural and industrial environment

78. Challenges & Policy Implications for Development of
Rural Entrepreneurship
Challenges faced by Rural Entrepreneurs:
• Growth of Mall Culture
• Poor Assistance
• Power Failure
• Lack of Technical knowhow
• Capacity Utilization
• Infrastructure Sickness
Policy Implications for Development of Rural Entrepreneurship:
• Policies should be flexible to facilitate local circumstances.
• The nature of enterprises to be established in rural areas must be
conducive to those areas in economic, social and environmental terms.
• Rural enterprise policy should cover all types of rural enterprise.
• There should be consistency and co-ordination with respect to the
choice of rural enterprise locations.

79. Suggestions
• Labour Intensive Techniques to be adopted
• Educate the Rural Entrepreneurs
• Offer finance with low rate of interest
• Government Role: To provide infrastructure, warehousing, marketing facilities
and assist rural entrepreneurs to export their goods to foreign countries.
• Exploitation of Village resources like wind and solar energy for rural
electrification.
• Establishment of Ancillary units to support big industries of urban.
• Providing Market Information
• SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats of small
businessmen have to be identified and properly trained to motivate them to
become entrepreneurs.
• Innovators club should be established in villages to support the large mass of
youth who are interested in taking business as a career.
• Marketing, Management skills should be improved by imparting training.
• Awards should be given to those entrepreneurs who demonstrate extraordinary
success.
• Reserve Certain Goods of Production exclusively for SSIs and their intelligent
outsourcing by the govt. to ensure maximum benefits.

80. Conti….
• Entrepreneurship development cell should be established at all the villages level to
provide guidance and counseling to motivate the rural entrepreneurs regarding
the use of modern technology.
• Separate financial fund
• Rural youth need to be motivated to take up entrepreneurship as a career.
• Finance for Modernization
• Rural entrepreneur should more competitive and efficient in the local and
international market.
• Interest free consumption credit should be provided by the Government, Banks
and other financial institutions to encourage buying the products produced by
rural entrepreneurs.
• OPS (Opportunities, Problem identification & Solution) Approach should be
adopted.
• NRIs and wealthy people of their respective villages should establish/assist rural
industries.
• There should be efficient regulated market for the marketing of rural products.
• Grading, standardization should be promoted for the benefit of rural industries.
• To provide different services in the areas of finance, marketing, R&D.

81. Way ahead
• The present day problems of rural India can not be solved without
reducing the dependence of rural population on agriculture income
alone.
• Since migration to urban areas is not feasible, rural industries alone
can help us.
• We have to list the low technology high labour intensive products
being imported .
• As a first step, the products can be introduced to rural
entrepreneurs.
• People will be willing to pay high cost if the quality is good.
• Food processing may be second step towards rural
industrialization.

82. Conclusion
• Establishing a rural enterprise is need of hour.
• The opportunities are tremendous but takers are few.
• Reason is lack of infrastructure and awareness.
• The media has spread the glamour of urban life and speeded up the
process of migration.
• Coordinated efforts of various agencies are required to achieve the
goal of rural industrialization.
• Agriculture based rural entrepreneurship are future of rural community.
• This has a great scope for rural development.
• Rural entrepreneurship plays a vital role in the economic development of
India, particularly in the rural economy. It helps in generating employment
opportunities in the rural areas with low capital.
• Rural entrepreneurship is the way of converting developing country into
developed nation.