RURAL ENTREPRENEURSHIP

• Definition of Entrepreneur:( Rural Enterprise)

• An Entrepreneur is one who organizes,
Manages, and assumes the risks of a business
or an Enterprise. (As per Webster Dictionary)
• Entrepreneurship means – The process
leading to the creation and running of any new
business regardless of its size, product, service,
potential or form of ownership.
• A business person who plans, owns,
organizes and manages a concern and
bears risks in expectation of good
earnings is termed as an Entrepreneur.
• The word entrepreneur as per BBC
English Dictionary (1993), refers to “a
person who sets up business.”
• RURAL ENTREPRENEUR:
• A Rural Entrepreneur is one who lives
in Rural Area and starts an economic
activity in Rural Area which will generate
income for him and his family.
• Traditionally, the person in village who
were doing Carpentry, Blacksmithy,
Cobbler, shoe-maker, Weavers, Floor
mill,Tailoring, Basket and Rassi maker,
Bricks manufacturer, Earthen Pottery
(Kumhar), Cloth merchants, Grocery
Shop-keeper, General Stores ,Tea stall
,Restaurent, were all Rural Entrepreneurs.
Rural Area means where the majority of the
population is engaged in Agricultural
activities and some others are engaged in
Allied to Agriculture and Non-Agricultural
activities. The persons who were engaged
• in Non-Agricultural Activities were known
as Business people to whom today we
may call as Rural Entrepreneurs.
• The population in Rural area- for a village
it was below 5,000 and for a big village or
town/semi-rural area it was below 50,000.
• These Entrepreneurs are utilizing local
available human resources & skills, Raw-
material with appropriate Technology.
• Rural Business Entrepreneur is doing
business with the help of his family
members. Very few persons are engaged
from outside as labour or helper/Salesmen
• Cottage industry is another name of
Rural Entrepreneurship. Most of the
activities are Agro-based in Rural Area.
Hence availability of raw material is never
a problem for Rural Entrepreneur.
• Majority of the population lives in villages,
hence, there is never a problem for labour/semi-
skilled workers.
• Capital or Finance is usually raised by himself
from friends & relatives in Rural Area or from
Financing Agencies (Banks or Money-lenders).
• Rural Industry: It includes the Cottage, village
or household industries as well as SSI which is
now known as MSME.
• Rural Industry as small scale Industry,
today is defined as an industry with a
Capital Investment in Plant &
Machinery up to Rs.1 Crore.
MICRO, SMALL AND MEDIUM
ENTERPRISES:(MSME):
MSMED Act, 2006 have been enacted
by the Government. In this Act investment
Limit for Micro Enterprise is Rs. 10 lakh,
For Small Enterprise it is Rs. 5 Crore and
for Medium Enterprise it is Rs.10 Crore.
In MSME, the concept of “Enterprise” has
been used which means it comprises both
Manufacturing and Services.
• (i) Manufacturing Enterprises :
• (a) Investment in Plant & Machinery in
Micro Enterprises upto Rs. 25 lakh,
• (b) In Small Enterprises – Investment
above Rs.25 lakh and upto Rs.5 Crore,
and
• (c) In Medium Enterprises – investment
above Rs.5 Crore has been permitted.
(ii) Service Enterprises: Investment up to:
(a) Micro Enterprises –Upto Rs.10 lakh
(b) Small Enterprises-
Above Rs.10 lakh and up to Rs.2 Crore
(c) Medium Enterprises-
• Above Rs.2 Crore and upto Rs. 5 Crore.
 SCHEMES FOR RURAL
ENTREPRENEURSHIP
• 1. Training of Rural Youth for Self-
Employment ( TRYSEM):
• (a) TRYSEM was started on 15th Aug.1979
• (b) Main objective was to impart Technical
Training and Business expertise to those
Rural Youth who belong to the families
living Below Poverty Line (BPL).
• (c) Self employment to Rural Youth of age
group of 18-35 years according to their
• Physical and mental abilities.
• (d) This Training was given as per
requirements of the Youth of Local Area.
• (e) Training to Rural Women was also
given under this Programme.
• (f) 30% of Trainees will be from SC/ST.
• (g) 1/3rd trainees would be Women.
• (h) Ex-servicemen were also included.
• 2. Under 6th Plan (1985-90) the target was
to impart training to Minimum 2 lakh Rural
Youth. (40 Youth per Block per year).
• 3.Training was imparted at District level by
Institutions like ITI, Polytechnic, Master
Craftsman, Mater Trainers and skilled
Artisans. (Tailoring, Carpentry, Black-
smithy, Masonary work, Pottery making
• Mechanics, Electricians, Plumber, cycle-
repair/motor-cycle repair and Pump-set
repair etc. were the activities).
• 5. Stipend during Training period was also
given to Youths.
• 6. After training, Loan and subsidy was
provided to start self-employment and self-
dependent. (Investment Capital for Tools
& Machines plus WC for Raw material was
• Made available to Trained youth.
• 7. The Central Govt. and State Govt.
shared the expenses under the Scheme
on a 50 : 50 basis.
• 8. Scheme was administered by DRDA.
BDO was given this task to identify trade
and institutions and select the trainees.
• 9. Target during 6th Plan period was to
train 10.05 lakh Youth. Against this target
 9.39 lakh youths were trained. In 7th Plan
again 10 lakh youths were trained.
10. Banks – CB, RRBs, & DCCBs were to
finance under the scheme on small project
basis. (Investment Capital + WC).
11. Training in 60 trades was imparted as
against 100 trades identified in the country
to 37 lakh youth up to April, 1999.
• Present Position of the Scheme:
• This scheme is not in existence at
present. Since April 1, 1999, TRYSEM
has been merged with newly introduced
programme named as SGSY (Swarna-
Jayanti Gram Swarojgar Yojna).
 DWCRA
• Development of Women and Child in
Rural Areas: (DWCRA):
• 1. This programme was started in Sept.
1982 as Sub-plan of IRDP.
• 2. Objective of the scheme was to
concentrate upon women members of
target families for increasing their income
and provide such facilities through which
they could start their income.
• 3. 10-15 women formed a group, each for
taking up economic activities suited to
their aptitudes and local conditions. To
start economic activity, Govt. imparted
Training and Financial assistance with
loan facility from Banks.
• 4. Now from April 1, 1999, this Scheme
has been merged with SGSY and
financing to women through SHG and
• in other manner is being given for doing
Economic Activities.
• Activities includes :-
• (i) Dairy Activity
• (ii) Embroidery work
• (iii) Massala Making (Grah Udyog)
• (iv) Carpet/Galicha making
• (v) Achar,& Murrabba making.
• (vi) Basket making
• (vii) Handicrafts, bags, wall hanging etc.
• (viii) Tailoring & Embroidery work on Machine
• (ix) Vermicompost preparation in village
• Area for farmers.
• (x) STD booth & Photo-copier Shop.
• (xi) Selling Ready-made garments.
• (xii) Soap, Candles, Agarbatti manufacturing.
• (xiii) Grocery Shop in Village Area.
• More than 6 lakh Women Groups under
SHG has been formed and financed to the
tune of Rs.1411 Crores (2007-08) has
been given through SHG in India.
• More than 85% SHGs consist of
Women in India and their repayment of
loan is also more than 80% in time.
Majority of SHGs are located in Rural Area
• Characteristics of an Entrepreneur:-
• An Entrepreneur must be :
• 1. Energetic.
• 2. Hard-working
• 3. Ambitious
• 4. Self-confident
• 5. Keen to assume responsibilities.
• 6. Foresighted
• 7. Single minded
• 8. Good Tempered
• 9. Eager to posses wealth.

• ENTREPRENEURIAL QUALITIES AND

SKILLS :
• 1. Educated
• 2. Intelligent
• 3. Initiative
• 4. Preparedness to accept Risk
• 5. Good Judgment
• 6. Firm Determination
• 7. Emotional stability
• 8. Knowledge of Market Trends
• 9. Basic Technical knowledge.
• 10. Ability to mobilize Resources.
• 11. Good communication skills
• 12. Dynamic Leadership
• 13. Organizing Ability
• 14. Quick at Decision taking
• Success of Entrepreneurship will depend
on Cooperation and support of the people
who work for it, and they are as under:
• 1. Employees
• 2. Customers (good product/services)
• 3. Dealers (distribution net work)
• 4. Suppliers (raw materials suppliers)
• 5. Investors
• 6. Advertisements & Media (Publicity)
• 7. Environment (Business conditions)
• 8. Government policy (taxes etc.)
• 9. Society (welfare of the consumers)
 PROBLEMS OF RURAL
INDUSTRIES
• 1. The Problem of Location

• 2. The problem of Raw Materials

• 3. The Problem of Skilled Labour

• 4. The Problem of Capital

• 5. The Problem of Entrepreneurship

• 6. The Problem of Industrial Sickness

• 7. The Problem of Technology

8. The Problem of Marketing

9. The Problem of Competition

10. The Problem of Organization

An Rural Entrepreneur can start any
Business or Service activity in Rural
Area for which the financial assistance is
available from Banks.
Following are few examples:
1. Photocopying Center
2. Photography & Videography
3. Setting-up of Cyber cafes
4. Computer Training/Service Center
• 5. Auto repair, services and Garages
• 6. Servicing of Electric and Electronic
• Equipment or instruments
• 7. Laundry and Dry cleaning
• 8. Tailoring
• 9. Repair of Tractor, Pump sets etc.
• 10.STD/ISD Booths and Fax service
• 11. Installation and operation of Cable TV
• network
• 12. Beauty parlours
• 13. General Merchant Stores
• 14. Storage facility and Cold Storage
• 15. Pathological Laboratories
• 16. Educational Services (Coaching
• Centres)
• 17. Hotels & Restaurents
• 18. Advertizing Agencies
• 19. Marketing consultancy
• 20. Cement and products of Cement shop
• 21. Iron & Steel Fabrication work
• 22. Bread , Bakery shop
• 23. Plastic goods
• 24. Stationery and Book shop
• 25. Courier Service
• 26. Vermiculture
• 27. Food, Fruits and Vegetables Process-
• -ing, Refrigeration, and Transportation
• 28. Insurance Service
• 29. Telecommunication Service.
• 30. Other feasible activities.
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