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Rural
Entrepreneurship
Topics covered
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INTRODUCTION
CONCEPT OF ENTREPRENEURSHIP
RURAL URBAN DIVIDE
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
Topics covered (contd..)
• GATHERING INFORMATION
• PROJECT REPORT
• SOURCES OF FINANCE LEGAL REQUIREMENTS
• MARKETING ISSUES
• TRAINING/SKILL DEVELOPMENT
• BASIC INFRASTRUCTURE
• OPPORTUNITIES FOR RURAL ENTREPRENEUR
• RURAL TECHNOLOGIES
• PURA AND RURAL ENTERPRISES
• WAY AHEAD
• SUM UP
INTRODUCTION
• 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.
• However, the income level of the farmers/rural
people is much lower than the urban people.
• 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.
Contd…
• 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
•

Several advantages are there in rural areas
specially in respect of agro-products and animal
husbandry related industries.

• Since the farming is seasonal activity, the
farmers can start and run small and micro
enterprises.
Contd…
• In the present scenario ,the rural areas are source of
raw materials and the urban areas are acting as
processing centers.
• This reminds us the typical set up during industrial
revolution when colonies were source of raw
materials and European Nations

were processing

and selling back the same to undeveloped nations.
• Prosperity will not come to rural areas unless the
value addition takes place at the rural areas itself.
Contd….
• 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.
Contd…
• This will also result in saving of huge amount of
energy in form of transportation of bulky raw
materials and manpower going daily to nearby
urban areas for employment.
• 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.
CONCEPT OF ENTREPRENEURSHIP
•

The entrepreneurs were earlier referred as
persons participating in military expeditions.

•

Now the person/ group of persons who start a
business or expand the existing business with
full knowledge of risks involved are said to be
entrepreneurs.

•

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.
Contd….
3.

Creative:finding simple solutions rather than
discussing problems.

4.

Flexibility : as the business environment is
dynamic and 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.
Contd….
6.

7.

•

Leadership: since various people are involved
in business at various levels, leadership
qualities are needed to bind them as an
organization.
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.
The qualities described above are only
indicative, in addition to those indicated above
the rural entrepreneur should have additional
qualities.
Contd….
• 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.
Small ideas
grow to an
enterprise
RURAL URBAN DIVIDE
• Agriculture as primary
occupation.

• Variety of occupation

• Generally underemployed people

• People having more
than one employment

• Lack of infrastructure

• Over burdened infra

• Low cost of labour and
land

• High cost of labour and
land

• Cheap local raw
materials

• Costly raw materials
(Contd..)
• Poor education and
training facilities

• Better education and
training facilities

• More prone to natural
disasters

• Less prone to natural
disasters

• Difficult access to
technology

• Easy access to new
technology

• High marketing cost

• High production cost

• Poorly organized

• Highly organized

• Migration of talent to
urban areas

• Over population due to
migration
RURAL ADVANTAGE
•

Having gone through the advantages and
disadvantages of rural areas as far as
establishment of 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: bio mass based
(paper/pulp), livestock based etc.
c) Low capital: small, tiny and cottage
industries like handicrafts etc.
Contd…
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: small computer
training institutes and other skills in
demand.
BASIC TRAINING FOR PROSPECTIVE RURAL
ENTREPRENEUR
• We certainly do not 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
Contd…
• Sources of finance
• Government programmes or subsidies
• Knowledge of accounting
• Training in the area selected by prospective
entrepreneur
• Certain general aspects will be discussed in
detail ,however in a dynamic environment
things are changing too fast and latest
information must be collected by person.
BENEFITS OF RURAL ENTERPRISES TO
NATION
• 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.
Contd…..
• It will unlock potential of crores of underemployed 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.
• 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.
GOVERNMENT STRATEGIES
• 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.
• After
independence
,the
development
strategies were worked out in the form of five
year plans.
• The first plan :Boards were created for
development of six specific rural sectors i.e.
khadi, coir, silk, handicrafts, handlooms,
small industries.
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
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.
Contd….
• 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
form of technology, entrepreneurship skills
and finance.Several dedicated institutions like
Small Industries Service Institute
Contd….
• 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.
Contd….
• 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 Plan: Technology up gradation, skill
development and quality improvement with
focus on employment generation.
Factors responsible for limited growth
• Though we have already discussed about the
disadvantages /advantages of rural areas as
far as growth of enterprises is concerned.
• Some external factors were also responsible
for limited development of rural enterprises.
Though the factors indicated below can be
reversed in favour of rural industries:
• Subsidy and target oriented programmes
encouraged people to somehow avail the
subsidy and the enterprise could not sustain
for long.
Contd…..
• 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.
HOW TO MOVE FORWARD
• 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.
• Export of small items from toys to school bags
has boosted Chinese economy and made it a
world leader in economic development.
•

•

We will now discuss about 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 has choice to take up any of the
following :

1.
2.
3.
4.
5.

Manufacturing or processing
Trading ,retail sales ,distribution etc.
Service sector
Contracting
Combination of above activities
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
• 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.
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.
PARTNERSHIP CONCERNS
• Partnership concerns 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 concerns fail when the
duties and responsibilities of partners are not
clearly defined.
PRIVATE LIMITED COMPANY
• 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.
PUBLIC LIMITED COMPANIES
• The public limited companies can have minimum
7 shareholder and there is no limit on maximum
number.
• The company can raise money from general
public by issuing shares or debentures.
• The public limited companies have to follow the
norms and laws as per companies act 1956.
• Such organizations are generally out of purview
of rural enterprise as the size of business is
small, however a successful entrepreneur can
convert the small enterprise into company.
NGO / Voluntary Organizations
• 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.
SELF HELP GROUPS
• 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.
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.
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??
Gathering ideas
•
•

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.
2.
3.
4.
5.
6.

KVIC
NABARD
SIDBI
EXTEN. CENTERS OF AGRICULTURE UNIV.
NIDC,NIESBUD
TECHNICAL CONSULTANCY ORG IN EACH
STATE
7. CENTERS FOR ENTREPRENEURSHIP
DEVELOPMENT
8. DEVELOPMENT COMMISSIONER
HANDICRAFTS/ COTTAGE INDUSTRIES
Contd…..
•

Some institutions are dealing purely in
business ideas related to agriculture produce:

1.
2.
3.
4.
5.
6.
7.
8.
9.

ICAR & ITS EXTENSION CENTERS
CFTRI
NHB
NATIONAL MEDICINAL PLANT BOARD
APEDA
NATIONAL INSTITUTE FOR ORGANIC FARMING
NBRI
CIMAP
FLAVOURS & FRAGRANCES DEVELOPMENT
INSTITUTE ETC.
GATHERING INFORMATION
•

1.
2.
3.
4.
5.
6.
7.

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

Once an entrepreneur firms up the type of
enterprise proposed to be established he 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:
1. Name of entrepreneur and nature of the
enterprise.
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.
SOURCES OF FINANCE
•
•
1.
2.
3.
4.
5.
6.

All entrepreneurs are not financially sound and
may require assistance from financial
institutions or banks for the project.
Various sources of finance are;
Commercial Banks
Cooperative Banks
Agriculture and Rural Development Banks
Regional Rural Banks
SIDC of various states
Non Banking Finance Companies
Subsidies are also available under various
government schemes.
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
• The following laws are applicable even if the
enterprise is not classified as industry:
(Contd..)
• 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
Marketing issues
• 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.
(Contd..)
• Direct marketing to bulk consumers (e.g.
hotels for primary or secondary processed
foods) through contacts.
• Marketing through retail outlets of KVIC
• 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
• Marketing through Web Site
(Contd..)
• 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.
Traditional and developed markets
Training/skill development
•
•
1.
2.
3.
4.
5.
•

Every entrepreneur should undergo specialized
training before entering into a venture specially
manufacturing, service or high tech agriculture.
Specific skills development or area specific training
institutes are conducting training for youth, such as;
CIMAP for medicinal plants
NBRI for floriculture
CFTRI for food processing
NIRD for rural technology related projects
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
Training
The
Entrepreneurs
Basic infrastructure
• We have already discussed the importance
of infrastructure for development ,however
the minimum requirements are indicated
below:
– All weather roads
– Electricity
– Water supply
– Telecommunications
– Banking etc.
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.
• We will now discuss the broad areas
under which the opportunities can be
classified and few time tested ideas.
Farm 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.
Organic farming and floriculture
(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.
(Contd..)
• 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.
Medicinal plants and spices
(Contd..)
• Bio fuels: about 30 verities of plants have
been identified for production of bio fuels.
Jatropha is one such verity. Raw oil can
be extracted in rural areas for further
refining into bio diesel.
• Seed production: good quality certified
seeds are in great demand and marketing
is very easy.
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.
Food processing
(Contd..)
• 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.
Farm nutrition/ Pesticide products
• 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.
Animal husbandry based enterprise
• Dairy is most popular and organised rural
enterprise, the scale 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.
(Contd..)
• 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.
• the topic has been discussed in detail in animal
husbandry module.
• Misuse of hormones, chemicals and unethical
rearing practices are major concerns for this
sector.
Goat farm
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.
Bee keeping and Dairy farm
Aquaculture
• Aquaculture can be practiced in any part of
country where water is available.
• The waste lands, degraded lands and closed
brick kilns can be converted into fish tanks
• the aquaculture 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 .
Fish farming
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.
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
Edible oils
• India is an importer 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 .
Service sector
• Service sector,growing at a high rate in urban
areas, has good potential in rural areas also.
• 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
An opportunity in Service sector

E-chaupal
Service sector and Small units
create employment
Trading/ Contracting
• Changed consumption pattern has opened
doors for trading activities in rural areas.
• Demand for fast moving consumer goods as
well as consumer durables such as television
sets, mobile phones, DVD players 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.
(Contd..)
• Various banks, financial institutions and
other extension agencies are executing
programmes through NGOs.
• Educated rural youth having social service
inclination can form NGOs /VA s for dual
purpose of social service and business
like activities.
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.
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.
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.
Sum up
• We have discussed the process of
establishing a rural enterprise in detail.
• 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 .
Thank
You

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Rural entrepreneurship in detail

  • 2. Topics covered • • • • • • • • • • • INTRODUCTION CONCEPT OF ENTREPRENEURSHIP RURAL URBAN DIVIDE 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. Topics covered (contd..) • GATHERING INFORMATION • PROJECT REPORT • SOURCES OF FINANCE LEGAL REQUIREMENTS • MARKETING ISSUES • TRAINING/SKILL DEVELOPMENT • BASIC INFRASTRUCTURE • OPPORTUNITIES FOR RURAL ENTREPRENEUR • RURAL TECHNOLOGIES • PURA AND RURAL ENTERPRISES • WAY AHEAD • SUM UP
  • 4. INTRODUCTION • 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. • However, the income level of the farmers/rural people is much lower than the urban people. • 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… • 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 • Several advantages are there in rural areas specially in respect of agro-products and animal husbandry related industries. • Since the farming is seasonal activity, the farmers can start and run small and micro enterprises.
  • 6. Contd… • In the present scenario ,the rural areas are source of raw materials and the urban areas are acting as processing centers. • This reminds us the typical set up during industrial revolution when colonies were source of raw materials and European Nations were processing and selling back the same to undeveloped nations. • Prosperity will not come to rural areas unless the value addition takes place at the rural areas itself.
  • 7. Contd…. • 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.
  • 8. Contd… • This will also result in saving of huge amount of energy in form of transportation of bulky raw materials and manpower going daily to nearby urban areas for employment. • 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.
  • 9. CONCEPT OF ENTREPRENEURSHIP • The entrepreneurs were earlier referred as persons participating in military expeditions. • Now the person/ group of persons who start a business or expand the existing business with full knowledge of risks involved are said to be entrepreneurs. • 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.
  • 10. Contd…. 3. Creative:finding simple solutions rather than discussing problems. 4. Flexibility : as the business environment is dynamic and 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.
  • 11. Contd…. 6. 7. • Leadership: since various people are involved in business at various levels, leadership qualities are needed to bind them as an organization. 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. The qualities described above are only indicative, in addition to those indicated above the rural entrepreneur should have additional qualities.
  • 12. Contd…. • 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.
  • 13. Small ideas grow to an enterprise
  • 14. RURAL URBAN DIVIDE • Agriculture as primary occupation. • Variety of occupation • Generally underemployed people • People having more than one employment • Lack of infrastructure • Over burdened infra • Low cost of labour and land • High cost of labour and land • Cheap local raw materials • Costly raw materials
  • 15. (Contd..) • Poor education and training facilities • Better education and training facilities • More prone to natural disasters • Less prone to natural disasters • Difficult access to technology • Easy access to new technology • High marketing cost • High production cost • Poorly organized • Highly organized • Migration of talent to urban areas • Over population due to migration
  • 16. RURAL ADVANTAGE • Having gone through the advantages and disadvantages of rural areas as far as establishment of 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: bio mass based (paper/pulp), livestock based etc. c) Low capital: small, tiny and cottage industries like handicrafts etc.
  • 17. Contd… 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: small computer training institutes and other skills in demand.
  • 18. BASIC TRAINING FOR PROSPECTIVE RURAL ENTREPRENEUR • We certainly do not 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
  • 19. Contd… • Sources of finance • Government programmes or subsidies • Knowledge of accounting • Training in the area selected by prospective entrepreneur • Certain general aspects will be discussed in detail ,however in a dynamic environment things are changing too fast and latest information must be collected by person.
  • 20. BENEFITS OF RURAL ENTERPRISES TO NATION • 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….. • It will unlock potential of crores of underemployed 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. • 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 • 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. • After independence ,the development strategies were worked out in the form of five year plans. • The first 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 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…. • 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 form of technology, entrepreneurship skills and finance.Several dedicated institutions like Small Industries Service Institute
  • 25. Contd…. • 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…. • 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 Plan: Technology up gradation, skill development and quality improvement with focus on employment generation.
  • 27. Factors responsible for limited growth • Though we have already discussed about the disadvantages /advantages of rural areas as far as growth of enterprises is concerned. • Some external factors were also responsible for limited development of rural enterprises. Though the factors indicated below can be reversed in favour of rural industries: • Subsidy and target oriented programmes encouraged people to somehow avail the subsidy and the enterprise could not sustain for long.
  • 28. Contd….. • 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.
  • 29. HOW TO MOVE FORWARD • 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. • Export of small items from toys to school bags has boosted Chinese economy and made it a world leader in economic development.
  • 30. • • We will now discuss about 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 has choice to take up any of the following : 1. 2. 3. 4. 5. Manufacturing or processing Trading ,retail sales ,distribution etc. Service sector Contracting Combination of above activities
  • 31. 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
  • 32. • 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.
  • 33. 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.
  • 34. PARTNERSHIP CONCERNS • Partnership concerns 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 concerns fail when the duties and responsibilities of partners are not clearly defined.
  • 35. PRIVATE LIMITED COMPANY • 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.
  • 36. PUBLIC LIMITED COMPANIES • The public limited companies can have minimum 7 shareholder and there is no limit on maximum number. • The company can raise money from general public by issuing shares or debentures. • The public limited companies have to follow the norms and laws as per companies act 1956. • Such organizations are generally out of purview of rural enterprise as the size of business is small, however a successful entrepreneur can convert the small enterprise into company.
  • 37. NGO / Voluntary Organizations • 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.
  • 38. SELF HELP GROUPS • 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.
  • 39. 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.
  • 40. 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??
  • 41. Gathering ideas • • 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. 2. 3. 4. 5. 6. KVIC NABARD SIDBI EXTEN. CENTERS OF AGRICULTURE UNIV. NIDC,NIESBUD TECHNICAL CONSULTANCY ORG IN EACH STATE 7. CENTERS FOR ENTREPRENEURSHIP DEVELOPMENT 8. DEVELOPMENT COMMISSIONER HANDICRAFTS/ COTTAGE INDUSTRIES
  • 42. Contd….. • Some institutions are dealing purely in business ideas related to agriculture produce: 1. 2. 3. 4. 5. 6. 7. 8. 9. ICAR & ITS EXTENSION CENTERS CFTRI NHB NATIONAL MEDICINAL PLANT BOARD APEDA NATIONAL INSTITUTE FOR ORGANIC FARMING NBRI CIMAP FLAVOURS & FRAGRANCES DEVELOPMENT INSTITUTE ETC.
  • 43. GATHERING INFORMATION • 1. 2. 3. 4. 5. 6. 7. Once a person decides to start a business, he has to gather certain information related to business whether external finance is involved or not. Similar enterprise in area and its viability. Availability of raw materials (nearby /source) Technology or know how Availability of labour and skilled persons Marketing channels Related government policies/promotional scheme Prospective buyers and demand pattern etc.
  • 44. PROJECT REPORT • Once an entrepreneur firms up the type of enterprise proposed to be established he 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: 1. Name of entrepreneur and nature of the enterprise.
  • 45. 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.
  • 46. SOURCES OF FINANCE • • 1. 2. 3. 4. 5. 6. All entrepreneurs are not financially sound and may require assistance from financial institutions or banks for the project. Various sources of finance are; Commercial Banks Cooperative Banks Agriculture and Rural Development Banks Regional Rural Banks SIDC of various states Non Banking Finance Companies Subsidies are also available under various government schemes.
  • 47. 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 • The following laws are applicable even if the enterprise is not classified as industry:
  • 48. (Contd..) • 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
  • 49. Marketing issues • 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.
  • 50. (Contd..) • Direct marketing to bulk consumers (e.g. hotels for primary or secondary processed foods) through contacts. • Marketing through retail outlets of KVIC • 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 • Marketing through Web Site
  • 51. (Contd..) • 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.
  • 53. Training/skill development • • 1. 2. 3. 4. 5. • Every entrepreneur should undergo specialized training before entering into a venture specially manufacturing, service or high tech agriculture. Specific skills development or area specific training institutes are conducting training for youth, such as; CIMAP for medicinal plants NBRI for floriculture CFTRI for food processing NIRD for rural technology related projects 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
  • 55. Basic infrastructure • We have already discussed the importance of infrastructure for development ,however the minimum requirements are indicated below: – All weather roads – Electricity – Water supply – Telecommunications – Banking etc.
  • 56. 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. • We will now discuss the broad areas under which the opportunities can be classified and few time tested ideas.
  • 57. Farm 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.
  • 58. Organic farming and floriculture
  • 59. (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.
  • 60. (Contd..) • 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.
  • 62. (Contd..) • Bio fuels: about 30 verities of plants have been identified for production of bio fuels. Jatropha is one such verity. Raw oil can be extracted in rural areas for further refining into bio diesel. • Seed production: good quality certified seeds are in great demand and marketing is very easy.
  • 63. 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.
  • 65. (Contd..) • 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.
  • 66. Farm nutrition/ Pesticide products • 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.
  • 67. Animal husbandry based enterprise • Dairy is most popular and organised rural enterprise, the scale 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.
  • 68. (Contd..) • 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. • the topic has been discussed in detail in animal husbandry module. • Misuse of hormones, chemicals and unethical rearing practices are major concerns for this sector.
  • 70. 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.
  • 71. Bee keeping and Dairy farm
  • 72. Aquaculture • Aquaculture can be practiced in any part of country where water is available. • The waste lands, degraded lands and closed brick kilns can be converted into fish tanks • the aquaculture 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 .
  • 74. 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.
  • 75. 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.
  • 76. Khadi - Charkha to ready made
  • 77. Edible oils • India is an importer 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 .
  • 78. Service sector • Service sector,growing at a high rate in urban areas, has good potential in rural areas also. • 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
  • 79. An opportunity in Service sector E-chaupal
  • 80. Service sector and Small units create employment
  • 81. Trading/ Contracting • Changed consumption pattern has opened doors for trading activities in rural areas. • Demand for fast moving consumer goods as well as consumer durables such as television sets, mobile phones, DVD players 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.
  • 82. (Contd..) • Various banks, financial institutions and other extension agencies are executing programmes through NGOs. • Educated rural youth having social service inclination can form NGOs /VA s for dual purpose of social service and business like activities.
  • 83. 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.
  • 84. 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.
  • 85. 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.
  • 86. Sum up • We have discussed the process of establishing a rural enterprise in detail. • 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 .

Editor's Notes

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