There is immense scope for rural entrepreneurship in areas such as business, industry, agriculture and this can help drive development.

Various flagship programmes and schemes like National Rural Livelihoods Mission (NRLM), Make in India, Skill India, Startup India, Mudra Yojana etc provide financial support to the skilled rural youth to take up the self-employment, wage employment and entrepreneurial activities.

Under NRLM, Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) is a placement linked skill development programme which allows skilling in a PPP mode and assured placements.

Also, Rural Self Employment and Training Institutes (RSETI) programme promote entrepreneurship that enables the trainees to take bank credit facility to start micro-enterprises.

Another scheme is the Startup India initiative, which aims to promote entrepreneurship among the youth of India (Department of Industrial Policy and Promotion, 2022). Additionally, the Deen Dayal Antyodaya Yojana (DDAY), which focuses on sustainable livelihoods for rural communities is also a similar kind of initiative. This scheme provides financial assistance, training, and market linkages to rural entrepreneurs.

Furthermore, the One District One Product (ODOP) identifies products that are unique to a particular district and promote their production and marketing.

The outcomes

Thanks to the NRLM, which was launched in 2011, India now has the largest network of women’s SHGs globally. As of March 2023, there are 8.2 million SHGs in India with 89 million members, boosting growth of the non-farm sector in rural areas.

However, despite these initiatives, rural entrepreneurship still has a long way to go. It still faces several challenges, such as limited access to finance, inadequate infrastructure, and a lack of training and education. Per PLFS 2020-21, the share of self-employed workers in rural areas is 61.3 per cent as compared to 39.5 per cent in urban areas.

PLFS estimates show that the share of self-employed workers in rural manufacturing rose from 47.02 per cent in 2018-19 to 52.6 per cent in 2020-21.

However, workers are mainly (43.78 per cent) own-account workers who generally operate in small-sized, family-based own-account units with low investment and technical know-how.

Rural entrepreneurship still remains as a source of survival/livelihood rather providing jobs. The majority of self employed are Own account workers rather than the employers.

PLFS 2020-21 also reveals that only 12 per cent of self employed sell their entire produce/product. Around 13 per cent self-employed use the entire produce from the activity for their own consumption.

Despite the existence DDUGKY and Rural Self Employment Training Institutes , 69.73 per cent of workers out of total rural manufacturing workers have not received any training, 26.47 per cent of workers have received informal training and only 3.79 per cent of workers received formal training in 2018-19.

The proportion of workers who have received training has increased by only 1.89 per cent in 2020-21. So the majority of the workers in the rural manufacturing sector are working without any formal vocational/technical training and therefore have low technical knowledge.

The way ahead

Although rural ventures are on the rise, the focus must be on their productivity. Therefore, to address these challenges, there is a need for a holistic approach that combines policy support, infrastructure development, and capacity building for the rural youth entrepreneurs.

Moreover, support for promoting the indigenous/ hereditary skills is also required to scale up operations.

Shrivastav is a faculty member at National Institute of Labour Economics Research & Development (NILERD); Kaur is a faculty member at Jaypee Institute of Information Technology. Views expressed are personal