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In the present scenario ,the rural areas are source of raw

materials and the urban areas are acting as processing centers.

Establishment of micro or household industries in rural

areas can break the cycle of poverty .

This will not only bring prosperity but also provide

employment to youth and landless people.

The present discussion will be focused on issues related

to prospects and problems related to entrepreneurship in rural areas and also the various activities which can be taken up without huge investment and specialized knowhow.

Rural Entrepreneurship can be defined as

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

Scope of Rural Entrepreneurship

Rural area as SME Sector and Economy Builder

Employment and income for poor and unemployed people

Contributing more than 52% of the GDP A rapid expansion in the small and medium industry


Scope of Rural Entrepreneurship

Repair shops, service centers, PCO, internet caf, 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

Scope of Rural Entrepreneurship

Various development programs are being executed

through Panchayti Raj Institutions, who are engaging contractors for civil /mechanical works. Rural youth can enter into this business. Changed consumption pattern has opened doors for trading activities in rural areas. Rural areas are also consuming large amount of agriculture inputs such as fertilizers, seeds, pesticides and insecticides etc.

Some known facts of MSMEs

Employ 41 Million People

Number 26 Million MSMEs

Give 45% of Industrial Production Account for more than 40% of Exports Contribute 8% to GDP

Exports: Rs. 1.5 lakh cr.

($ 38 Bn) Production: Rs. 5.9 lakh cr. ($ 140 Bn)

Region Wise Disbursement of Refinancing (in Cr.)

Year: 2010-2011

Total: Rs12,980 Disbursed: Rs13,485.87

Year: 2011-2012

Total: Rs14,995 Disbursed: Rs15,421.70

Year: 2012-2013

Total: Rs16,990 Disbursed: Rs177674.29

Reason-Wise Distribution of Refinancing

60 50


2010-2011 30 2011-2012

2012-2013 20








Obstacles and Challenges for Entrepreneur in India

Lack of Knowledge

Financial Challenges
Lack of Infrastructure Family & Social Challenges Technological Challenges Policy Challenges

Involvement of Government
National Agricultural and Rural Development Bank

(NABARD) Small Industries Bank of India (SIDBI) Government Schemes to Enhance Rural Entrepreneurship Rural Entrepreneur Development Programme(REDP)

Role of SIDBI
Supply side Activities Microfinance

Demand Side Promotional & Developmental Activities

Help transform NGOs/Societies

Enterprise promotion programs Skill-cum-Technology Upgradation Programme

etc. to more regulated entities.

Associated with more than 150 MFIs Introduced the concept of rating of MFIs Term loans Equity / Quasi Equity

Cluster Development Programme (CDP) Entrepreneurship Programme (EDPs)



Capacity Building Grants


Himachal Pradesh


Uttar Pradesh

Andhra Pradesh

Average Cost per REDP and per Trainee in different state

Rural entrepreneurship programmes must be carried in

such a way so that it can be opted by rural youth as a career. Introduction of policies of government among rural youth to raise innovation level. Various incentive monetary and subsidies should be given to rural entrepreneurs. (some farmer do not plant certain type of crop in there farm land therefore government has planned to give them subsidies and higher market value if they plant particular crop).