Sowing seeds of rural entrepreneurship

Lakshmi Venkataraman Venkatesan

Saurabh Srivastava

In the last few decades, India’s hinterlands have witnessed a general decline in growth rates of agricultural activities vis-à-vis the overall rural economy, while construction, manufacturing, services and non-agricultural activities have seen a more or less steady rise.

So, if India has to reap the benefits of its ‘demographic dividend’, it is critical to promote growth and opportunities for rural youth through entrepreneurship in non-farm and non-agricultural sectors.

To provide the much-needed boost to rural entrepreneurship and integrate it into India’s larger economic value chain we need not necessarily limit business operations to the rural areas.

Rural-urban link

Rather we can create a more cohesive ecosystem where businesses source raw material (inputs) and/or labour (skill sets) from the rural hinterlands and deliver value to customers across rural and urban markets.

As of March 31, 2022, India has more than 63 million MSMEs out of which about 94 per cent are micro-enterprises. As per official data released on April 30, 2022, the country’s 6.33 crore MSMEs employ about 12 crore workers.

Despite such an impressive number, India’s larger chunk of rural talent is deprived of growth opportunities due to a lack of knowledge and skillsets to think beyond agriculture as a source of income.

According to World Bank Data 2019, about 65 per cent of the Indian population, most of them (about 58 per cent, as per 2018-19 PLFS data) still earn their livelihood from agriculture and allied sectors.

However, the non-farm rural sector is increasingly playing an important role in the development of rural areas of India.

The conventional rural non-farm business opportunities include value chain activities, such as agro-processing, transport, distribution, marketing, and retail, as well as tourism, manufacturing, construction, and mining.

New services-led occupations include micro entrepreneurs in areas such as handicrafts, bakeries, automobile repairs, e-service kiosks, and so on.

While most of these activities have been around for decades, their capacity to turn into high-profit businesses has been limited due to the lack of innovation.

Innovation becomes an income- and employment-generator for local communities.

A success story

Consider the story of an entrepreneur Arun Awtade from Pune who went from being a victim of drought and poverty in Maharashtra to building an innovative business to help farmers conserve water, improve soil quality and prevent the use of pesticides – at last count his business had recorded revenues of over ₹10 crore.

Armed with only a vocational diploma, Arun ‘Indianised’ an Israeli technology. His plastic mulching solution has since helped thousands of farmers. Today, Arun employs engineers and graduates from top universities to further his innovations.

The inspirational story of Arun Awtade makes us realise that providing resources or revenue alone cannot turn anyone into an entrepreneur but creating excitement about entrepreneurship with innovation at its core will.

Through initiatives like Business Idea Contests, Entrepreneurial Hackathons, Mentor Mobile Clinics, and institutions like Rural Self Employment Training Institutes (RSETIs) and Incubation Centres with appropriate facilities, rural youth can be motivated to refine and develop their ideas.

Further, providing youth with customised training, ensuring one-on-one mentoring at each point of the entrepreneurial journey and organising regular networking and peer learning opportunities will spur entrepreneurship.

The writers are Founding and Managing Trustee of Bharatiya Yuva Shakti Trust and Co-founder and Past Chairman, NASSCOM, respectively

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