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State of Rural Entrepreneurs in India

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April 20, 2023

Why in news?

Despite the growing numbers of rural entrepreneurs, the productivity of such entrepreneurs is concerning.

What are the factors that promote rural entrepreneurship?

  • Skilling - National rural livelihoods mission (NRLM) and Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) is a placement linked skill development programme.

Rural entrepreneurship harnesses innovation, invention, production and manufacturing of goods, promoting exports, and providing rural employment.

  • These schemes allows skilling in a PPP mode and assured placements.
  • Training - Rural self-employment and training institutes (RSETI) enables the trainees to take bank credit facility to start micro-enterprises.
  • Promotion of entrepreneurship - Startup India initiative promotes entrepreneurship among the youth of India.
  • Sustainable livelihoods - Deen Dayal Antyodaya Yojana (DDAY), which focuses on sustainable livelihoods for rural communities.
  • Financial inclusion - NRLM, which now has the largest network of women’s SHGs globally has helped in financial inclusion.
  • Mudra Yojana also provide financial support.
  • Production and marketing - One district one product (ODOP) identifies products that are unique to a particular district and promote their production and marketing.
  • ODOP also provide market linkages to the entrepreneurs.
  • As of March 2023, there are 8.2 million SHGs in India with 89 million members.

What are the challenges to the rural entrepreneurship?

  • Inadequate infrastructure in rural areas
  • Limited access to finance
  • Lack of formal vocational/technical training
  • Low upgradation in the technology
  • Most entrepreneurs produce products for their own consumption

What is the need of the hour?

  • Productivity - Needs to be enhanced.
  • Holistic approach - By integrating policy support, infrastructure development, and capacity building for the rural youth entrepreneurs.
  • Indigenous/ hereditary skills - Support for promoting the indigenous/ hereditary skills is also required to scale up operations.
  • Technical know-how - The entrepreneurs needs to be in cultivated with the recent technologies.

Quick facts

  • As per Periodic Labor Force Survey (PLFS) 2020-21
    • The share of self-employed workers in rural areas is 61.3% as compared to 39.5% in urban areas.
    • The share of self-employed workers in rural manufacturing rose from 47.02% in 2018-19 to 52.6% in 2020-21.
    • Only 12% of self-employed sell their entire produce/product.
  • 69.73% of workers out of total rural manufacturing workers have not received any training.
  • 26.47% of workers have received informal training.



  1. The Hindu Business Line│ Challenges For Rural Entrepreneurship
  2. The Research Gate│ Rural Entrepreneurship Definition
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