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Entrepreneur's Corner

Understanding Rural Entrepreneurship and its Impact

By EMN Updated: Jul 07, 2016 12:37 am

By Ricky Ozukum

Lopsided development of the economy is one of the main factors why our nation as well as the state is facing severe problems of growth. We still face massive unemployment and extreme poverty at this time of the century. India as well as Nagaland is a land of villages. More than 75% of the population lives in villages. Due to the ignorance and not much effort to build up the rural areas, large number of people migrates to the towns and cities in the hope of finding a better prospect. This has ironically led to more dreary problems such as growth of slum areas where people live in unhygienic condition thus leading to the breakout of diseases. Migration has also led population problems in the urban areas. Moreover, agriculture despite being the backbone of the economy, nothing much can be done as lands are limited and people could not depend entirely on farming for many reasons starting from lackluster government policy and the erratic weather conditions which are making the farmers suffer more. Therefore, the foremost need to change all these for better is to close the gap between the rural and urban disparity. And this can be done by making rural areas i.e. villages, developed from all aspects. Having said that, the development of the rural areas can be answered by the huge role entrepreneurship can play.
Now, the questions arise as to what rural entrepreneurship is? To put it simply, rural entrepreneurs are those who carry out entrepreneurial activities by establishing industrial and business units in the rural sector of the economy. In other words, establishing industrial and business units in the rural areas refers to rural entrepreneurship. In other words, rural entrepreneurship implies entrepreneurship emerging in rural areas. Or, say, rural entrepreneurship implies rural industrialisation. Ultimately, rural entrepreneurship precedes industrialization. Rural industries and business organisations in rural areas generally associated with agriculture and allied activities to agriculture. According to KVIC (Khadi and Village Industry Commission), “village industries or Rural industry means any industry located in rural areas, population of which does not exceed 10,000 or such other figure which produces any goods or renders any services with or without use of power and in which the fixed capital investment per head of an artisan or a worker does not exceed a thousand rupees”. These are few of the rural based businesses one can undertake to promote rural entrepreneurship:Agro Based Industries: like sugar industries, jaggery, oil processing from oil seeds, pickles, fruit juice, spices, diary products etc.
Forest Based Industries: like wood products, bamboo products, honey, coir industry, making eating plates from leaves.
Mineral based industry: like stone crushing, cement industries, red oxide making, wall coating powders etc.
Textile Industry: like spinning, weaving, colouring, bleaching.
Engineering and Services: like agriculture equipments, tractors and pumpsets repairs etc.
It is quite encouraging that the Government of India in its successive five year plans has been assigning increasing importance and support for the promotion and development of rural entrepreneurship. But, if the aspiring and existing entrepreneurs have no interest in setting up businesses and units in rural areas than the efforts of the government goes off in vain. People need to understand that entrepreneurship in rural sector provides an answer to a lot of problems in rural India. Indian rural sector is no longer primitive and isolated. Therefore, entrepreneurship in the rural and tribal areas looms large to solve the problems of poverty, unemployment and backwardness of Indian economy. We can be assured that rural entrepreneurship can be an effective means of accelerating the process of rural development.
There are many rural initiatives we can undertake and simultaneously can benefit the economy enormously. Such as diversification into non-agricultural uses of available resources such as catering for tourists, blacksmithing, carpentry, spinning, etc. as well as diversification into activities other than those solely related to agricultural usage, for example, the use of resources other than land such as water, woodlands, buildings, available skills and local features. There are also entrepreneurial combinations of these resources, for example: tourism, sport and recreation facilities, professional and technical training, retailing and wholesaling, industrial applications (engineering, crafts), servicing (consultancy), value added (products from meat, milk, wood, etc.) and the possibility of off-farm work. Additionally, there are new uses of land that enable a reduction in the intensity of agricultural production, for example, organic production.
It is, no doubt, that the growth and development of rural industries facilitate self employment, results in wider dispersal of economic and industrial activities and helps in the maximum utilisation of locally available raw materials and labour. This is how rural entrepreneurship can play in ameliorating the socio-economic conditions of the rural people in particular and the country in general.
Proper utilisation of local resources:
Rural industries help in the proper utilisation of local resources like raw materials and labour for productive purposes and thus increase productivity. They can also mobilise rural savings which help in increase of rural funds.
Employment generation:
Rural industries create large-scale employment opportunities for the rural people. The basic problem of large-scale unemployment and underemployment of rural India can be effectively tackled through rural industrialisation.
Prevents rural exodus:
The lack of employment opportunities, heavy population pressure and poverty forced the rural people to move to urban areas for livelihood. It creates rural urban imbalance. Under these circumstances, rural industries help in reducing disparities in income between rural and urban people and acts as a potential source of gainful employment. This prevents rural people to migrate to urban areas.
Fosters economic development:
Rural industrialization fosters economic development of rural areas. This curbs rural urban migration on the one hand and also reduces disproportionate growth of towns and cities, growth of slums, social tensions and environmental pollutions etc. on the other.
Earnings of foreign exchange:
Rural industries play an important role in increasing the foreign exchange earnings of the country through export of their produce.
Producer’s goods of consumers’ choice:
Rural industries including village and cottage industries produce goods of individual consumers’ choice and taste. Jewellery, sarees, artistic products are produced to cater to the needs of different consumers according to their taste, design and choice.
Entrepreneurial development:
Rural industries promote entrepreneurial development in the rural sector. It encourages young and promising entrepreneurs to develop and carry out entrepreneurial activities in the rural sector which finally facilitate the development of the rural areas.

By EMN Updated: Jul 07, 2016 12:37:36 am
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