India 65% of the population resides in rural areas according to the World Bank, they contribute 25-30% to the GDP and employ 70% of the total workforce. Considering such facts it is very clear how much it influences overall growth in India and needs to be given the attention it deserves. We need to understand that this is not the same India of 1975 where agriculture used to be the main source of income and employment in rural areas, but that place has been taken by the non-farm sector. there are various factors that are making such an environment for the rural population, some of them are digitalization, heavy usage of the internet, cashless payment, digital economy, remote work opportunities, remote education, digital infrastructure, etc.
In this discussion, we are going to cover the current situation of rural entrepreneurship and startups, how it's helpful for the development in the rural area and the government initiatives to make ecosystems according to the regional development plans
in today's scenario, rural development is more than ever before linked with the SMEs and the startup India. Institutions, individuals, and as well as the government of India promoting rural development now see entrepreneurship as a strategic development intervention that could accelerate the rural development process.
They are also putting emphasis on the urgent need to promote rural enterprises:
- development agencies see rural entrepreneurship as an enormous employment potential
- politicians see it as the key strategy to prevent rural unrest
- farmers see it as an instrument for improving farm earnings
- and women see it as an employment possibility near their homes which provides autonomy, independence and a reduced need for social support.
All these Expectations see entrepreneurship as a vehicle that can drive rural development
to improve the quality of life for individuals, families and communities and to sustain a healthy economy and environment.
To improve productivity and wages of rural people.
To guarantee increased and quick employment possibilities.
To demolish unemployment and bring a notable decline in underemployment.
To guarantee an increase in the standard of living of the underprivileged population.
The entrepreneurial exposure to rural development accepts entrepreneurship as the central force of economic growth and development, without it other factors of development will be wasted or frittered away. However, the acceptance of entrepreneurship as a central development force by itself will not lead to rural development and the advancement of rural enterprises, the existence of such an environment highly depends on policies promoting rural entrepreneurship. The effectiveness of such policies in turn depends on a conceptual framework about entrepreneurship and implementation part.
Rural development startup initiative
Aspire - A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship:
It was launched to set up a network of technology centers and to set up incubation centers to accelerate entrepreneurship and also to promote startups for innovation in agro-industry.
Entrepreneurship and Agro-Industry organization of the M/o MSME, one-time grant of 100% of the cost of Plant & Machinery other than the land and infrastructure or an amount up to Rs.100 lakhs whichever is less to be provided
In case of incubation centers to be set up under PPP mode with NSIC, KVIC or Coir Board or any other Institution/agency of GoI/State Govt., one- time grant of 50% of the cost of Plant & Machinery other than the land and infrastructure or Rs.50.00 lakhs, whichever is less to be provided
Assistance towards the training cost of incubates will be met out of the ATI scheme of the Ministry as far as possible for both centres
Objective Of The Scheme
Create new jobs and reduce unemployment
Promote entrepreneurship culture in India
Grassroots economic development at district level
Facilitate innovative business solution for un-met social needs
Promote innovation to further strengthen the competitiveness of MSME sector
Startup India Seed Fund Scheme (SISFS)
this is basically because the Easy availability of capital is essential for entrepreneurs at the early stages of the growth of an enterprise. The capital required at this stage often presents as a make-or-break situation for startups with good business ideas.
commercialization. Rs. 945 crore has been sanctioned under the SISFS Scheme for period of 4 years starting from 2021-22.
It will support an estimated 3,600 entrepreneurs through 300 incubators in the next 4 years.
The objective of the schemes
The Scheme aims to provide financial assistance to startups for
proof of concept,
prototype development,
product trials,
market entry
Expansion of women-led SHGs
In order to increase the participation of the women workforce in economic decision-making, financial inclusion plays an important role. Prime Minister Narendra Modi also addressed in a webinar on the Union Budget 2022 with the theme of "Leaving No Citizen Behind", he emphasized the importance of women to the rural economy of India.
additional efforts are needed to ensure that more and more startups be established in India's rural areas.
emphasized the importance of increasing women's engagement in self-help groups (SHGs)
set a goal of providing around four crore connections under the Jal Jeevan Mission
Fund of Funds for Startups (FFS) Scheme
As a monitoring agency DPIIT and Small Industries Development Bank of India (SIDBI) as an operating agency for FFS, the government has built FFS with a corpus of Rs. 10,000 crore for the funding needs of startups.
corpus of Rs. 10,000 crore is envisaged to be provided over the 14th and 15th Finance Commission cycles based on the progress of the scheme and availability of funds
Aim not only made capital available for startups at an early stage, seed stage and growth stage but also played a catalytic role in terms of facilitating the raising of domestic capital
reducing dependence on foreign capital and encouraging homegrown and new venture capital funds.
The conclusion
Despite the initiative of the government to boost the startup in rural areas. Entrepreneurship education also plays an important part in developing a positive mindset and creating awareness about the initiative. They should also work toward making the process easy as possible to reach a large set of audience. Apart from that, it's important to understand that funding plays an important role in any startup development and entrepreneur's life, that is why all these initiatives somehow connected with funding to the startup at a different stage.
At flyboat, we believe that a startup has a lot to consider in a short span of time and numerous roles to juggle in between, a significant factor like funding becomes a make-or-break situation for the startup at some stage of the lifecycle. We are working in a direction to use the expertise of the best resource to make the startup funding journey easy and smooth as possible.
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also read :INDIAN STARTUP ECOSYSTEM BOOSTER SHOT