The Paradigm of Rural entrepreneurship development

The Paradigm of Rural entrepreneurship development

A traditional paradigm in entrepreneurship development assumes that the process of entrepreneurship development is associated with entrepreneurship development programs (EDPs) conducted mainly for the purpose of identifying and developing potential entrepreneurs. These EDPs are devised for grooming entrepreneurs through entrepreneurial training to develop and strengthen the entrepreneurial quality (Kroon, J. et al., 2006) and competencies of the potential entrepreneurs willing and ready to build their own business or enterprise creation. The process of entrepreneurial development focuses on training, education, reorientation and creation of conductive and healthy environment for the growth of enterprises.

With a shift in the traditional paradigm, rural entrepreneurship development as an alternative paradigm involves developing capacity of rural people or communities to be entrepreneurial in their own rural context and providing start-up support (through an Eco-system of policy, facilities, finance, Technical, managerial and strategic support framework). The strategy for RED is three pronged. RED is mainly concerned with the development of three constituent aspects of the concept of rural entrepreneurship namely development of rural entrepreneurs, development of rural enterprises and development of rural entrepreneurial Eco-system. These aspects may also be defined as the developmental needs with respect to RED. The basic objective of rural entrepreneurship development demarcated by policy makers in our country envisaged the commitment to create socio-economic parity in the rural areas as against its counterparts. Rural Entrepreneurship Development aims at bringing about the dispersal of micro and small village industries (MSVEs) in rural areas with the advantage of optimum mobilization of local resources. Rural Entrepreneurship Development (Kirve and Kanitkar, 1993) has been viewed as a vital program for socio-economic development of rural areas. The objectives are to trigger economic development and generate employment by providing necessary factor inputs and infrastructure for productive uses in agriculture and rural industries, and improving the quality of life of the rural people by entrepreneurial Empowerment. This also focuses on to help upgrade the skill, creativity & productivity of rural artisans and encourage value-addition and quality of their products.

The rationale for the Rural Entrepreneurship Development is rooted in a clear opportunity for building more prosperous, dynamic and sustainable economies in rural India through entrepreneurship development enabling the rural people to build micro and small industries on their own. Energizing rural entrepreneurs is one important place of this strategy for rapid rural industrialization and creating Rural Entrepreneurship Development Eco-system that focus on supporting rural entrepreneurs and building entrepreneurial communities is another part of this strategy. Rural industrialization driven rural entrepreneurship development for promoting Micro and Small Village Enterprises (MSVEs) is considered basically a question of properly linking the rich, but idle natural resources in the rural areas. It is a process of the involvement of industries in the development of an area and also participation by area factors and agents in the growth of industries best suited to that specific area. It implies a fusion among the resources of the rural area and people’s aspirations and the industrial activities.

Scope of Rural entrepreneurship development

The scope of RED revolves around building a system of support for entrepreneurs – through a focus on entrepreneurship education, technical assistance, and financial capital – and to create a culture of entrepreneurship and supportive policy that would sustain these efforts into the future. Rural Entrepreneurship Development (RED) Policies, efforts, programs and schemes focus on:-

• Identification and cultivation of potential entrepreneurs among different target groups such as Rural Poor, Women, Minorities, SCs, STs, OBCs etc and promotion of rural unemployed people (men & women) into gainful economic activities.

• Recognize and developing a climate conducive to the development of rural enterprises and entrepreneurs and Creating and fostering a support environment such that any resident with the motivation and capacity to become an entrepreneur can do so, regardless of location in rural hinterland.

• Identification of area-specific viable manufacturing and service activities, developing the potential of setting up all types of industries in the rural areas and Promoting and Supporting Micro and Small Village Enterprises (MSVEs) for rural         people to utilize their potential for self-employment and innovation.

• Providing, developing and augmenting both production-oriented and welfare-oriented rural infrastructure, and physical facilities to facilitate setting up of new enterprises.

• Identifying the educational and training & Development needs of the rural people, designing suitable program of entrepreneurial education and providing them with the skills, knowledge and tools needed to start their own venture, and establishing and sustaining a comprehensive and supportive institutional framework for providing Gainful economic and employment opportunities to utilize rural resources.

• Fostering institutional network to provide necessary support and assistance pertaining to Credit and finance, Technical Know-how, input sources and procurement, information and Data need about govt. Policies, Market potential sand competition in the market, technological changes, opportunities and treats to their business etc.

Keeping in view the aforesaid contents of rural entrepreneurship development for expeditious rural industrialization and present socio-economic contents of the state, the process of rural entrepreneurship development demands the fulfillment of essential conditions in its perspectives like appropriate and up-to-date technology adoption by Micro and Small Village Enterprises (MSVEs) to enhance viability and competitive strength.

Govt. Role in Developing Rural Entrepreneurship

            In India, the Government's policy and programmes have laid emphasis on poverty alleviation, generation of employment and income opportunities and provision of infrastructure and basic facilities to meet the needs of rural poor. Governments at the Centre as well at the State designed a number of schemes and programs for the support of entrepreneurs in general and for rural men/women entrepreneurs in particular. Government has identified several sectors in the rural areas and has accordingly formed various schemes to improve and enhance the socio-economic well being and quality of life in villages. RED in India has received much attention during the last few years. The Department of Rural Employment and Poverty Alleviation under the Ministry of Rural Development have initiated several schemes in which 30 to 40 per cent of the benefits are reserved for rural women below the poverty line. The underlying philosophy of these schemes is to encourage entrepreneurship and self-help among rural women. Several policies, programs, schemes, procedures and institutions have been formulated and setup to support development of entrepreneurship among the rural people in India (N.C. Saxena, 2007). Such developmental and promotional measures can be categorized as follows-

1. Policy framework supporting rural entrepreneurship and entrepreneurs.

2. Programs supporting rural entrepreneurship and entrepreneurs.

3. Institutional support to rural entrepreneurship and entrepreneurs.

REDPs are envisioned as mechanism of socio-economic development of the rural India (Singh, S. K., 2002). Such Programs creates entrepreneurs who are able to establish small and micro enterprises which require lower investment of funds and a few employees only (Khatkar, R. K., 1989). These programs aims at mitigating poverty, elimination of unemployment and thus providing gainful self-employment and promotion of micro and small village enterprises (MSVEs), balanced regional development, Utilization of local resources, in the rural areas and to check lopsided economic development.

            The various government schemes offered which includes entrepreneurship development concept are Prime Minister’s Rojgar Yojna (PMRY), Swarnjayanti Gram Swarozgar Yojna (SGSY), and rural employment generation Program (REGP). Swarnjayanti Gram Swarozgar Yojana Scheme (SGSY), the amended and merged version of the erstwhile Development of Women and Children in Rural Areas (DWCRA), Integrated Rural Development program (IRDP) and Training of Rural Youth for Self Employment (TRYSEM), was launched in April 1999. It is a holistic credit-cum-subsidy program, covering all aspects of self-employment (Sood, A.K., 2009) Keeping in view the documented objectives, a detailed study about Govt. policies, assistance and programs has been done in chapter five (5) entitled as “Review of Govt. Policies & programs” and the impact evaluation of such programs in chapter seven (7) entitled as Programs performance and Impact Analysis.

            A network of organizations is there in the state, which provides loan facilities as well as training, consultancy, and marketing services to the rural entrepreneurs. The government has created institutional network to provide the infrastructural support to entrepreneurs. A number of institutions and government agencies at different levels are involved in RED creating an entrepreneurial eco-system for removing various environmental and personal inhibiting factors or barriers to the growth of rural micro and small village enterprises (Vaish, K., 1993). 

The government of India and the respective governments in the states have created, developed and sustained the institutional network of organized developmental institutions in the country supporting the development and sustenance of micro and small village enterprises and alleviating rural poverty (Gupta, R. K., 1993). The various central and state sponsored institutions and autonomous agencies for support of SSI are SSI board, KVIC, SIDO, NSIC, NSTEDB, NPC, NISIET, IIE and EDI etc. The state government agencies are DI, DIC, SFC, SIDC, SIIC, SSIDC etc (Bhole, 2009).