Entrepreneurship Industry News

The Role and Importance of Rural Entrepreneurship in India

Let’s tackle the primary question. What is Entrepreneurship? According to Google, entrepreneurship is the activity of setting up a business or businesses, taking on financial risks in the hope of making a profit. This summarizes the entire concept very efficiently. Using this definition, an entrepreneur is a person of very high aptitude who pioneers change, possessing characteristics found in only a minuscule fraction of the population.

Tackling the next question in mind, What is Rural Entrepreneurship? Entrepreneurship based on the welfare and upbringing of the rural areas is Rural entrepreneurship. It is a pretty straight forward definition. However, it has a much deeper meaning to it.

Why Rural Entrepreneurship?

One of the major objectives of developmental policies in India is to provide employment to millions of unemployed rural youth. The core of the problem in countries like India is surplus agricultural labour and closure of traditional village industries, resulting in increased unemployment in rural areas and migration of rural youth to urban areas in desperate search of jobs, in turn putting more pressure on the urban infrastructure and amenities. Rural industries generated employment for 47.97 lakhs people in the year 1996-97, as against 37.21 lakhs people in the year 1992-93. There are a large number of products and services available in rural areas, which can be leveraged by entrepreneurs to set-up new and small micro enterprises. In fact, entrepreneurship can be pursued in virtually any economic field.

What is the role of Rural Entrepreneurship in India?

The fundamental role is to provide employment opportunities and consequently, applying a check on migration. Industries in rural areas are mostly micro or tiny in structure and quick yielding. In other words, their gestation period is much less as compared to large scale industries. Rural industries are also labour intensive and provide substantial employment opportunities to rural folks of all age groups. Few examples of such type of industries are Food Processing industry, Poultry industry, cottage and handicrafts industry, etc. This also helps in balanced regional growth and promotion of artistic activities.

India is one of the oldest, culturally richest and diverse country full of colours and boasts of civilization with rich flora and fauna. Our cuisine is mouth watering, scenic beauty is breathtaking, folk dances are simply enchanting, and there is a wide array of places of tourist attraction. These are just a few of the reasons why Government has termed us as Incredible India. Nearly two-thirds of our fellow brothers and sisters live in the villages where our roots are contained. There is the wealth of craft, performing art, vivid lifestyle and cultural diversity contained in our rural India. Thus, rural entrepreneurship will further help bridge this gap between the rural and urban areas, and the development of urban areas won’t happen at the cost of our rural areas.

Human resources are amongst the essential resources that are required for fostering rural entrepreneurship. The importance of human resources cannot be overemphasized, for it is this resource alone that makes the greatest impact on socio-economic development of rural areas. Childhood reading, upbringing, exposure to challenging situations, self-study, apprenticeship, coaching and training, all contribute to achievement motivation, which is a key to entrepreneurship development. This helps us by applying a check on social evils (like poverty, the growth of slums, etc.), awakening the rural youth (to expose them to various avenues and adopt entrepreneurship and promote it as a career) and also improve the standard of living of the rural youth.

What challenges are faced by rural entrepreneurship?

A promoter of rural enterprise faces a plethora of problems, usually called teething troubles when he sets up his enterprise. First, the financial problem. Arranging working capital becomes a major task as he could run out of money to buy raw materials though he may not yet have earned any reputation in the market to get raw materials on credit. Similarly, he makes several production trials, improves quality, etc. This is not it. There are also policy challenges faced by the enterprise. To top it all, there are marketing problems (competition, middlemen), management problems (legal formalities, low quality of products, procurement of raw materials, etc.), and Human Resources problems (low skill level of workers and negative attitude of rural folk towards the ideas of business).

The changing global environment raises questions about the ability of traditional, small-scale businesses in rural areas to share the potential benefits offered by the changing environment. The rapid (though declining) population growth, coupled with even faster urbanization, creates increasing demands. In India, urban populations, in general, grow about twice as fast as the overall total, and by 2020, they may exceed the size of the rural population. Such a significant demographic trend challenges the capacities of some traditional small-scale businesses to cope with the increasing demands. And this is why Rural Entrepreneurship is becoming increasingly important in India, and already, there is a changing trend in how things happen.

Read More: EnSpace