Rural Entrepreneurship

Entrepreneurs are people who create and develop enterprises and likewise “entrepreneurship” is the process through which enterprises are set up. It also charts their growth and progress. But, the growth and development of rural entrepreneurs are complex issues, which can be tackled by social, political and economic institutions. The sooner they are established, the better it would be for the commercial development in the rural sector and the subsequent economic growth of our country.

In the micro-finance industry, we consider rural areas as places of opportunities for new entrepreneurs. Despite all the inadequacies in rural areas, we should assess and make good use of their strengths and strengthen them to make rural areas as ‘places of opportunities’. In a country like India, there is much to do with the way we see the reality of the rural areas. Rural psychology is attuned to promoting new ideas and innovation, more so because job opportunities are limited there. We should encourage entrepreneurs to think positively, creatively and with an entrepreneurship- building mindset to promote their growth. Young people with such perspective and with the help of rightly channelized efforts would usher in an era of thriving rural entrepreneurship.

Rural entrepreneurship will augur well for our country in a number of ways.

First, it will provide employment opportunities. Rural entrepreneurship is labour intensive and provides a clear solution to the growing problem of unemployment. Development of industrial units in the rural areas through rural entrepreneurship has high potential for employment generation and income creation.

Secondly, it can help check the migration of people from rural to urban areas in search of jobs. Rural entrepreneurship can plug the big gap and disparities in income between rural and urban people. It will usher in modern infrastructural facilities.

On the other hand PM’s ‘Make in India’ project has induced major initiatives, policy changes and a slew of reforms that put India on the global industrial map as one of the fastest growing economies and one of the most attractive investment destinations in the world. So we must think seriously to promote entrepreneurship in a large scale, reaching out to the every corner of our country. Micro Units Development and Refinance Agency (MUDRA) was created to refinance micro business under the scheme titled Pradhan Mantri MUDRA Yojana. It can also create a balanced regional growth, dispel the concentration of industrial units in urban areas and promote regional development in a balanced way.

Rural entrepreneurship has the potential to promote artistic activities. A large section of the bearers of traditional heritage and culture lives in rural areasThey create artistically brilliant handicraft pieces and are equally good in the performing arts sectors. The age-old rich heritage of rural India can be preserved by protecting and promoting art and handicrafts through rural entrepreneurship. Recentlyon the occasion of the International Women’s Day we had felicitated 17 successful women entrepreneurs from different areas of our country, they are mainly from rural or semi-urban areas.

In a country like India, where people are still fighting on the issue of unemployment with 83.3 crore out of the total 121 crore Indians living in rural areas, rural entrepreneurship can awaken the youth there and expose them to various avenues to adopt entrepreneurship and promote it as a career option. It will bring in an overall change in the quality of lives of people and address social ills like illiteracy, child marriage, migration and women empowerment among many others.


  • Rural industries also help preserve the age-old rich heritage of the country by protecting and promoting art and creativity.
  • The development of rural industries by providing jobs to rural unemployed helps in reducing disparities in income between rural and urban areas.
  • These industries promote balanced regional development by dispersing industries to rural areas.
  • Rural industries being labour intensive serve as an antidote to the widespread problems of rural disguised unemployment and underemployment stalking the rural areas.
  • Development of rural industries serves as an effective means to build up village republics.
  • Rural industrialization fosters economic development in rural areas. This checks migration from rural to urban areas, on the one hand, and lessens the disproportionate growth in the cities, reduces growth of slums, social tensions, and atmospheric pollution, on the other.
  • Rural industries also lead to development without destruction, i.e., the most desideratum of the time.

Rural Industrialization in Retrospect:

Rural industrialization did not receive any significance before Independence of India. The reason is not difficult to seek. The British Government encouraged imports and discouraged development of indigenous industries. The Indian art and culture during this period was at stake in the hands of the British Government.


Rural industries started getting importance only after the independence. This got expressions in the major policy pronouncements on development in India. For example, the first Industrial Policy of Independent India, the Industrial Policy Resolution of 1948 emphasised the utilization of local resources and the achievement of local self-sufficiency in respect of certain essential “consumer goods” as the most suitable characteristics of cottage and small industries.

There was no looking back since then. While emphasising the creation of employment, equitable distribution of incomes and an effective mobilisation of capital and skills, the Industrial Policy Resolution, 1956 pointed out that the characteristics of cottage, village and small-industries are favourable to the achievement of these objectives.

Artisan Entrepreneurs

These entrepreneurs represent the skilled persons in rural society. Such skills are either acquired through professional training in association with their kinship group, or through inheritage as for example, blacksmithy, carpentry, etc.

Farm Entrepreneurs

These are people whose primary occupation and main source of livelihood, is farming. Persons not having land or other farming resources but are willing to take up an enterprise in the village that will aid agriculture, can be regarded as farm entrepreneurs.

Merchant and Trading Group

This includes primarily the business community of rural areas who form a small segment of rural population. It shares the larger trades in the community. These people are perceived as traditionally exploitative class and play the role of middleman in business to the pursuit of any vocation in the rural areas.

General Entrepreneurs

Some examples of this class are high school drop-outs, educated-unemployed, landless labourers, wage earners, and persons belonging to the scheduled castes, etc.

The rural entrepreneurs can initiate their enterprise in any of the category classified as rural industry.

  • Agro based industries include processing and sale of agricultural products such as pickles, jiggery, juice, fruit jam, dairy products, products made out of rice, oil processing from oil seeds.
  • Forest based industries that include honey making, beedi making, bamboo products, cane products, wood products, coir industry, etc.
  • Mineral based industries include stone crushing, cement industries, making of idols, decorative items made from marble and granite.
  • Enterprises based on handicrafts include decorative and household products like made out of cane, bamboo and wood available in the area.
  • Textile industry includes weaving, spinning and dying of clothes. This industry incorporates within its ambit khaddi, tusar silk, muga silk.
  • Engineering industries include making and repairing of parts of agricultural equipments, tools and implements, parts of machinery etc.

Tribal Entrepreneurs

Tribal entrepreneurs are predominantly in tribal villages and could be regarded as an entrepreneurial class by itself. Their source of origin is the tribal community. Their entrepreneurship may however lead to the pursuit of any vocation in the rural areas.


The rural entrepreneurship is great importance for a country which has a huge rural population.

  • Positive check on migration of rural population to urban areas; Rural population including the unskilled workers move out to the urban areas in search of jobs and lead a very miserable life in urban areas. Rural entrepreneurship has the capacity to reduce the gap existing between urban areas and the rural areas. Rural entrepreneurship can generate employment opportunities and contribute in developing the infrastructure and other amenities in the rural areas.
  • Augments employment opportunities; Rural entrepreneurship is basically labour intensive. It provides employment opportunities for the rural mass. Rural entrepreneurship has the potential of abating the problem of unemployment and underemployment prevalent in rural regions.
  • Rural entrepreneurship can significantly contribute towards promotion of balanced regional development.
  • Rural entrepreneurship has the potential of protecting and promoting traditional artistic activities, art, craft and handicraft of the rural areas.
  • The social problems like poverty, inequality, caste distinctions can be reduced by rural entrepreneurship.
  • Entrepreneurship in the rural areas can be taken up as career by the youths. The rural youth can be encouraged and awakened.
  • Rural entrepreneurship can improve the standard of living in rural areas. Their increasing opportunities for growth and prosperity can uplift the rural communities.
  • The local resources available in the rural areas are best known to local rural population. Rural entrepreneurship can ensure the most efficient and effective use of limited resources by the entrepreneurs that can contribute to the overall economic development of rural areas.
  • Rural entrepreneurship can play a significant role in increasing the foreign exchange earnings of the country if their products are recognized and demanded abroad.
  • Rural entrepreneurship can generate more employment, output, and wealth from the rural areas and thus contribute to the growth and improvement of per capita income of rural people.

Benefits of Rural Industrialisation:

  • Rural industries are labour-intensive. They provide additional employment to men and women. Ensure decentralisation of economic power and elimination of monopolistic exploitation.
  • Rural industries provide additional employment opportunities, raise production and improve economic conditions in rural areas.
  • Decentralised production through network of well-knit rural industries obviates the necessity of complicated managerial and competitive marketing techniques, thus reducing the costs on account of overheads.
  • Rural industries will strive to build up village republics and human resources development.
  • Rural industrialisation leads to the development of rural areas thereby lessening the disproportionate growth in large cities, reducing the growth of slums, social tensions, exploitation and atmospheric pollution.
  • Rural industrialisation provides ample scope for the promotion of artistic achievement and creativity that has been suppressed in rural areas.

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