At a time when established businesses are facing closures and retrenchment in ‘India’, a wave of individual entrepreneurial initiatives in ‘Bharat’ can lead the way forward.

The massive reverse migration of labourers from cities to the Indian hinterland has once again sharply highlighted the disproportionate concentration of economic activities/opportunities (barring agriculture) in the country’s urban areas. The economic model of a few metropolitan cities holding inordinately large businesses and employment opportunities has its faultlines as displayed by the migrant crisis. Consider that the two metro cities of Mumbai and Delhi together account for almost one-tenth of country’s GDP – starkly underlines this imbalance. However, this massive return of our workforce back to their hometowns and villages offers a hidden opportunity for us to reconfigure the employment policy landscape in the country. At a time when established businesses are facing closures and retrenchment in ‘India’, a wave of individual entrepreneurial initiatives in ‘Bharat’ can lead the way forward and pave way for a more democratic distribution of economic opportunities.   

Rethinking the employment landscape by boosting micro enterprises 

Although experts have differed on the exact numbers, but close to 20 million migrant workers have returned, is a reasonably safe estimate. How will this huge mass of people make a living? Certainly, not all of them can depend on the already overburdened agricultural sector. Herein lays both a necessity and an opportunity to encourage entrepreneurship and create an ecosystem that promotes businesses in small towns and rural areas. With a rural literacy rate of around 65% based on a 2014 NSSO survey, Bharat is brimming with possibilities and hope. In rural India, there is a dire need to shift the excessive dependence on agriculture to other more income-generating and sustainable sources of livelihood. In addition to food processing, dairy, livestock, fisheries, warehousing and logistics – all related to agriculture in one way or the other – non-agricultural pursuits such as smaller units of manufacturing, retail, construction and financial services, among others, must be given impetus. The government has pressed forward with its ‘Garib Kalyan Rozgar Abhiyan’ an investment amount of Rs 50,000 crore to address the employment needs of the returning migrants with a focus on rural housing, roads, drinking water, toilets, mandis, cattle sheds etc. However, more needs to be done to create an ecosystem to boost entrepreneurship in villages and small towns. Boosting micro-enterprises in rural areas is key to reimagining entrepreneurship in India.  

• Tax incentives to startups in small towns and villages: Since rural entrepreneurship movement is in its infancy, the government should extend them the same concessional treatment that they otherwise do to new ventures in urban areas in certain critical sectors. While higher tax exemptions and rebates on profits is one way, their turnover threshold should be raised even more for reducing compliance burdens.         

• Boosting microcredit availability: Given the poor footprint of regular banks and their branches in rural areas with inadequate credit availability, the government must incentivise the microfinance institutions and fintech companies further to expand their operations and reach. NBFCs must be encouraged to practice a collateral-free lending procedure with a higher threshold for collateral in place. Provisions must be made in the law to ensure that digitally-disadvantaged can also secure credit and loans easily. The overuse of documentation requirements must also be done away with. 

• Creating clusters for specific economic activities: Following China and elsewhere, the government should mainstream culture of industrial/product/services clustering, operational synchronisation with a long-term aim of scaling and expansion. Locations with an inherent comparative advantage for some products/services must be allowed to develop an ecosystem around those very products or services. This can give a huge fillip to the Make-in-India programme.     

• Upgrading transport and telecommunication infrastructure: Essentially, transport and telecom serve as the operational and logistical backbone of any business and commerce. Unless production centres and markets are connected with proper transport networks, supply chains cannot function smoothly. Similarly, unless the telecom infrastructure is not updated and digitised, rural wantrepreneurs will always be at a disadvantage.             

• Improving the ease of starting a business: While ease of doing business has become an everyday mantra for both governments and business, it is time to focus on ease of starting a business. For simple rural folks, who wish to become an entrepreneur, the entry barriers must be extremely low. While registration and licensing of their businesses must be exceptionally easy through a single-window at affordable fees, the documentation should be limited to a bare minimum. The early processes such as getting electricity, acquiring construction permits etc. should be made an easy task.      

• Imparting business skills to wantrepreneurs in villages: This is perhaps the best time to devise business management programmes and curricula keeping in mind the specific needs and sensitivities of the small town and rural youth who too have big dreams of their own. Lack of access to formal management education must not hinder their entrepreneurial ambitions. With a view to address precisely this need, Bada Business has already crafted an alternative module of management education that can be accessed by anyone and is available in vernacular languages. It is important that governments and industry come together to address this need for imparting business skills to rural youth. For rural India that is raring to go, this entrepreneurial revolution in our countless villages and towns will also address the broader rural-urban disparity in our country.

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