Brief overview of Indian Government policies aiding rural entrepreneurship

Saturday January 01, 2011,

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The words that best describe the agricultural practices in India are – enormous, untapped, traditional and unchanging. The word that best connects and corrects them, to have them fitting into the economic progress measures in the best possible ways, is Rural Entrepreneurship.

Rural entrepreneurial ventures, characterized by the above mentioned categories mostly come under the banner of Small Scale Industries. Ministry of Small Scale Industries (SSI) is the nodal Ministry for formulation of policy, promotion, development and protection of small scale industries in India. It designs and implements the policies through its field organizations for the promotion and growth of small scale industries and also performs the functions of policy advocacy on behalf of small scale industries (SSI) sector with other Ministries/Departments. Following is a brief overview of the recent policy initiatives and other reforms undertaken by the Indian Government through the Ministry of Small Scale Industries:-

  • KVIC. The Khadi & Village Industries Commission (KVIC) established by an Act of Parliament is a statutory organization engaged in promoting and developing khadi and village industries for providing employment opportunities in the rural areas, thereby strengthening the rural economy.
  • Coir Sector. The coir industry is a labour-intensive and export-oriented industry. It uses coir husk, a by-product of coconut. India is the largest coir producer in the world accounting for more than 80% of the total world production of coir fiber. The coir sector in India is very diverse and involves households, co-operatives, NGOs, manufacturers and exporters. The Coir Board, a statutory body established under the Coir Industry Act 1953, looks after the promotion, growth and development of the coir industry, including export promotion and expansion of the domestic market. The Coir Board implements a number of schemes which include assistance for participation in exhibitions, training for skill development and assistance under Mahila Coir Yojana, training, financial assistance for modernization of existing units, undertaking R&D activities, etc.
  • The Ministry of Agro and Rural Industries (ARI) implements two nation-wide employment generation programmes, namely, Rural Employment Generation Programme (REGP) and Prime Minister’s Rozgar Yojana (PMRY). Both these programmes are credit-linked capital subsidy schemes which are implemented through commercial banks. While the REGP is implemented by the KVIC, the PMRY is implemented by the State Governments through the District Industries Centers (DICs).The Prime Minister’s Rozgar Yojana (PMRY) was launched on 2nd October 1993 to assist educated unemployed youth in setting up self-employment ventures.
  • The main objectives of REGP are to generate employment in rural areas, develop entrepreneurial skills and aptitude among rural unemployed youth, achieve the goal of rural industrialization and facilitate participation of banks in the village industries sector so as to ensure higher credit flow to these industries.
  • In the National Common Minimum Programme (NCMP), the UPA government has proposed to revamp the Khadi and Village Industries Commission (KVIC) and launch new programmes for the modernization of coir, handlooms, power-looms, garments, rubber, cashew, handicrafts, food processing, sericulture, wool development, leather, pottery and other cottage industries.
  • In pursuance of the NCMP declaration and the announcement of Finance Minister in his Budget speech of July 2004, a scheme titled the “Scheme of Fund for Regeneration of Traditional Industries” (SFURTI) has been notified in October 2005 for the integrated development of traditional clusters of khadi, coir and village industries, including leather and pottery. Under SFURTI, Annual Report 2006-07 it has been proposed to develop around 100 clusters (25 clusters for khadi, 50 clusters for village industries and 25 clusters for coir industry) over a period of five years commencing 2005-06.

The above initiatives of the Indian Government have been designed to facilitate the farmer to think beyond his fields and farms. Although, the policies have been formulated taking into consideration the rural scene in India, the pertinent question that remains is – Is rural India aware of these policies?

Rural Intrepreneurship
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