Rural Entrepreneurship

Am I turning back the course of modern civilization when I ask the villagers not merely to grow raw produce, but to turn it into marketable products and thereby add a few more pies to their daily income? (H, 4-1-1935, p. 372). Gandhi


There is a big divide between rural and urban areas in developing countries. Rural areas lack infrastructure such as roads, electricity and telecommunications, and institutions such as schools and hospitals. A large section of rural population remains engaged in agriculture and related sector.  This is largely because there are very few other opportunities for livelihood. Industries and private sector enterprises are largely absent in the rural landscape.

For younger population, the lack of employment opportunities in villages is a serious issue and there is a large-scale migration from rural areas to urban areas in search of jobs. However the jobs are scarce even in the cities. In absence of education and skills, they end up working as daily labourers in construction sites, as household labour or doing other odd jobs.

Such unorganised labour pay barely enough to subsist. They are unable to afford rents and end up staying on streets, in slums or unauthorised colonies, and are unable to save or provide decent food, education and healthcare for their families. They hit a hurdle again in terms of livelihood opportunities and their situation barely improves, and often becomes worse than what they started from.

Migration to cities cannot be an answer for all underemployed or unemployed rural citizens. There is a need to create employment opportunities on a large scale in rural areas so that people can earn decent livelihood without being forced to leave their fields and families behind in search of work.

This requires a change in mindset and vision, followed by good planning and implementation of that vision.

To start with:

1. We need to start thinking of rural areas and people living there as assets

By investing in their education, training and skill development, rural people and their children can perform the same task as those being done by people in urban areas. The daughter or brother of a  farmer need not be farmer. S/He could be a doctor, an engineer, a scientist, an IT professional or an artist. It will mean millions of young and hard working people can join the modern knowledge economy and contribute to it. This would lead to greater innovations and productivity gains and will benefit everyone. The rural people will themselves come out of poverty and also generate surplus welfare gains for all.

2. Revival of Industries in Rural Areas

We need to stop looking at rural areas as bowls of natural resources, to be consumed and then discarded. Instead we need to bring industrialisation and technology to the villages, so that they can improve their agricultural practices, bring value addition to their farm produce, and diversify their economies. At the moment, most farmers simply sell their farm produce raw, and often to the middlemen and have to withstand fluctuation of prices. Industrialisation and value addition will allow them to increase their income and get assured returns.

It will also open greater employment opportunities in farm and non-farm sector, such as product research and designing, meterology/weather services, marketing, trading, advertising, EIA/studies and other skilled jobs.

Here technology can play some leap-frogging role. When we think of industrialisation, we need not think of big factories with polluting chimneys. Instead industrialisation can be at the level of households (such as grading machines) or at the level of cooperatives (such as grinding and processing) or at level of entrepreneurs (such as e-commerce for direct marketing of farm produce to consumers in urban and semi-urban areas). And yes, it can also be in the form of modern industries such as call centres, software development, indigenisation of technologies, and more.

3. Enabling Environment

To achieve the above, we need to invest in rural roads, electricity, transportation and communications. In addition, it requires availability of vocational institutes, workshops and training centres, and these should be staffed by good teachers, professionals and good managers.

Government departments such as agriculture centres, industrial development and enterprise support units, and other institutions such as banks need to be there and functioning properly.

Support of these institutions is required to to provide an enabling environment to rural entrepreneurs and youths and to encourage interested professionals to come and provide training and support in rural areas. This will allow more economic activities to be carried out in villages,  develop expertise and capacities within these villages, and increase employment opportunities and household incomes in rural areas.