Paper code – KHU-701

Name of paper –Rural Development: Administration and Planning

Programme: B. TECH. Branches: CE, CSE, IT, and CHE
By
Dr. Kamrul Hasan
Assistant Professor Economics (CF)
ASD, IET, Lucknow, U.P.
 Unit (v)

Technology for rural India

Rural India faces a severe technology deficit. While there are other serious shortages,
power, water, health facilities, roads, etc, these are known and recognised. However, the
role of technology in solving these and other problems is but barely acknowledged, and
the actual availability of technology in rural areas is, at best, marginal. The so-called
digital divide is widely spoken and written about; the technology divide is hardly
mentioned. Yet, the backbone of the rural economy is agriculture, which also provides
sustenance to over half the country population. Science and research have played
important roles in increasing yields. The green revolution of the 1970s was, in fact,
powered by the scientific work in various agricultural research institutions. While some
fault the green revolution for excessive exploitation of water and land resources and
over-use of fertilisers, it did bring about a Science and technology are often hyphenated
and spoken of in the same breath.
One would, however, like to differentiate the two. Technology generally (though not
always) derives and draws from science, and often manifests itself in physical form for
example, as a piece of hardware. Science, on the other hand, is knowledge. In rural
India, there is a dire inadequacy of both. Crop yields are, therefore, far lower than what
they are in demonstration farms, where science and technology are more Power is a key
requirement in rural areas, for agricultural as well as non-agricultural and domestic uses.
Technology is now capable of providing reliable power at comparatively low cost in a
decentralised manner. This needs to be upgraded and scaled in a big way, with emphasis
on renewable and non-polluting technologies. An all-terrain, reliable and low-cost means
of transporting goods and people are an essential need for rural areas. In addition, it must
be robust, low-maintenance and near-free.

Real Success Stories of Young Entrepreneurs in India

Successful Entrepreneurs Stories

In today’s volatile world, the only thing that is constant is cut-throat competition. With a
world population of 7.6 billion, all of them competing to ace in the race of success, there
are two kinds of people: leaders and followers. The followers go along with the
bandwagon, unlike the leaders who carve their own path, map their own road and
embark on a journey of success. There are a plethora of resources like widespread
internet availability and easy access to it, innumerable software and programmes
available at the beck and call of an individual, global network conducive of viral
exchange of information, knowledge, news, etc. it depends on the youth, whether to put
these resources to the best use or lose this opportunity and become stagnant of all the
success stories you have heard of, probably the most enthralling ones are those where
young adults and teenagers put their mark on this world? Their drive to be on the top of
the food chain is what is inspirational. So how did these youngsters take on the world
when their peers were off playing video games and partying?

Ritesh Agarwal

Have you heard of Oravel? No? How about OYO? Yes, this young man is the Founder &
CEO of the budget room provider service – OYO. Ritesh Agarwal has had an interesting
childhood. He was never fond of studies so he dropped formal education out of his
plans. The idea of Oravel Stays struck him when he was 18. The basic idea was a budget
hotel chain that provides B&B. Realizing that no other service offered a room for a
budget traveller, Ritesh took the idea from Oravel stays to OYO rooms and voila!
Agarwal started OYO with 11 only rooms in a Gurgaon hotel. This is one of the
best successful entrepreneur’s stories in India. Today, OYO has 65000 rooms in about
5500 properties across 170 cities in India.
Deepak Ravindran

At the age of 18, Deepak was an ordinary science student. He loved computers but was
also fond of studies. However, he decided to drop out of college to pursue his first
start-up venture. Deepak is the Co-Founder and CEO of Innoz Technologies – a service
that provides a wireless market and gives solutions for mobile search applications –
along with 5 of his friends. He also started SMSgyan, a text message-based search
engine, which works on a format. Deepak started this service in 2011. As of now,
Deepak is working on a new chat-based delivery platform, called Lookup which has
some heavy investors.

Farrhad Acidwalla
When Farrhad was 13, he borrowed about Rs. 1,200 from his father to build an online
community. At the age of 16, he borrowed 500rs to buy an online domain. By 17, this
young man was interviewed on CNN. Now at the age of 24, FarrhadAcidwalla is among
the top successful entrepreneurs of India. Selling his initial business idea to a fan for
about Rs. 25,000, he used the money to start a Web Developing Media Firm called
Rockstah Media. The company is now about a year old and already recognized by many
across the nation. This is one of the best successful entrepreneur’s stories in India.
FarrhadAcidwalla has earned a spot in several listicles of famous publication. He is also
a TEDx speaker and has been the youngest guest lecturer in IIT Kharagpur’s Annual
Entrepreneurship Summit.
Shravan Kumaran and Sanjay Kumaran

Shravan and Sanjay, siblings aged 16 and 15 respectively are the youngest upcoming
entrepreneurs of India. Together, they are the brain behind Go Dimensions. The aim of
the company is to develop a simple technological solution for the digital world. They are
the youngest Mobile Application Developers in India. When asked about how they
managed to achieve this feat, the brothers responded by saying “reading books and
solving the problems given to them”. These two develop applications for both, Android
as well as IOS platforms. Their mission is to have their apps installed on at least half of
the world’s digital phones. The dynamic duo has already developed 11 apps which have
about 60,000 downloads across 60 countries.
King Sidharth

When King was only in his 10th std., he started an online magazine called Friendz to help
students with teenage issues and problems; his first business was a hit.
An artist, entrepreneur, web designer and public speaker, King also organizes Creations
– meets for students to learn bits and pieces about entrepreneurship and more.
King has also authored the book Bhagavad Gita & the Law of attraction. The book takes
you on a journey of spirituality and science and their underlying connection. He’s a true
King of his generation.

Sreelakshmi Suresh
A name to remember, Sreelakshmi Suresh, the youngest web designer and CEO in the
world has many accolades to her name. A recipient of many national and international
awards, she started climbing the success ladder at the mere age of 10, when she
established eDesign – a venture which is now a web designing company that offers SEO,
web design, and other web – related services. Sreelakshmi has developed over 100
websites for renowned institutions and organizations across India. She is currently
pursuing her grade 12 education from a secondary school in Kozhikode, Kerala. Last
year, she achieved her aim of developing 50 websites; this year, she aims to double that
number. With her ideas and hard work, she is sure to achieve it too.

Women Entrepreneurs

Definitions
Women entrepreneurs may be defined as a woman or a group of women who initiate,
organise and run a business concern.
Schumpeter – “Women entrepreneurs are those women who innovate, initiate or adopt a
business activity”.
Government of India – “A woman entrepreneur is defined as an enterprise owned and
controlled by a woman having a minimum financial interest of 51 present of the capital
and giving at least 51 present of the employment generated in the enterprise to women.”
Frederick Harbison – “Any women or group of women which innovates, initiates or
adopts an economic activity may be called women entrepreneurship”.
In short, women entrepreneurs are those women who think of a business enterprise,
initiate it, organise and combine factors of production, operate the enterprise and
undertake risks and handle economic uncertainty involved in running it.
According to Government of India, “A Woman enterprise is the one owned and
controlled by a woman having minimum financial interest of 51% of the capital and
giving at least minimum 51% of generated employment to women”.
According to J. Schumpeter, “Women who innovate, initiate or adopt business actively
are called women entrepreneurs.”

World over 1/3rd of the entrepreneurial ventures are run by woman entrepreneurs. Due to
economic progress, better access to education, urbanization, spread of liberal and
democratic culture and recognition by society, there has been a spurt in woman
entrepreneurship in India. Special incentives and drives have been created in India to
bolster the growth of women entrepreneurs. Schemes like Startup India and Standup also
make special case to promote entrepreneurial drive among women.
Gradually but steadily, world over, women entrepreneurs have emerged as successful
entrepreneurs while earning many accolades for themselves. For e.g. Oprah Winfrey, an
American entrepreneur, television host and media executive received the Presidential
Medal of Freedom in 2013 for her outstanding work in the field of entertainment and
social impact.
Closer to home, Indian woman Entrepreneur, Kiran Muzumdar Shaw, Chairman and
Managing Director of Biocon Limited, received various coveted corporate award and
civilian awards like Padma Shri (1989) and Padma Bhushan (2005) for her remarkable
contribution to health and medicine industry. Other famous Indian Women entrepreneurs
include personalities like Vandana Luthra, Ekta Kapoor, Naina Lal Kidwai and so on.

Women Entrepreneurship – Common Features

Some common features of women entrepreneurs found in India are listed below:
Most women with small income are likely to become entrepreneurs

2. Women with small facilities are likely to become entrepreneurs

3. A majority of women entrepreneurs are married. With the support of their husband
they accepted entrepreneurship.

4. Most spinsters face difficulties in obtaining financial support to start their enterprises.

5. A large number of women with little or no education and training enter into the
business field.

6. Many women become entrepreneurs out of economic necessity.

7. Women’s sincerity and hard work is the cause for sustainability and growth.

8. Women entrepreneurs are security oriented rather than growth oriented

9. Most women prefer stabilization of income and minimization of risk

10. Business enterprises of women lack working capital, this causes low profit margin

Why women become entrepreneurs?

1. To become economically independent

2. To establish their own enterprise

3. To establish their identity in the society

4. To achieve Excellency in their endeavour

5. To build confidence to themselves

6. To develop risk assuming ability

7. To claim equal status in the society

Women Entrepreneurship – Need and Factors

In modern days, particularly in India, there is a great need for women entrepreneurs.
Several factors are responsible for compelling the women members of the family to set
up their own ventures.

These factors suggesting their need can be broadly classified into two groups:
I) Motivational factors or needs and

II) Facilitating factors or needs.

Factor Motivational Needs:

The following are the motivational needs for which modern women are motivated
to become entrepreneurs:
1) Economic Necessity:
In business, the entry of women is relatively a new phenomenon. Because of the
break-up of the joint family system and the need for additional income for maintaining
the living standards in the face of inflation or rising prices, women have started entering
the most competitive world of business. Thus, because of the economic necessity,
women have begun entering business field for earning some income and increasing their
family income in modern days of inflation.
2) Desire for High Achievement:
Another motive force compelling women to enter business world is their strong desire
for high achievement in their life. In modern days, though women are educated, they are
not able to find jobs in the market place or they may not be able to go out of their homes
for working somewhere else because of family problems. Therefore, a woman is tempted
strongly by a desire to achieve something high and valuable and prove herself as an asset
and not a liability to the family. This is the strongest motivating force for a woman to
become an entrepreneur.

3) Independence:
Another strong motive force compelling a woman to become an entrepreneur is to lead
an independent life with self-confidence and self-respect. The ownership and control of
a successful business provides a woman entrepreneur a prestigious status, personal
reputation and a sense of independence in the society.

4) Government Encouragement:

The Government and non-government bodies have started giving increasing attention
and encouragement to women’s economic conditions through self- employment and
business ventures. They have formulated various policies and programmes and
introduced various incentive schemes to promote women entrepreneurs in the country.
Such encouragement and incentive schemes have induced women to undertake business
mentors.

5) Education:
Women have been taking up various kinds of technical, vocational, industrial,
commercial and specialised education so as to qualify themselves to be self-employed in
some kind of trade, occupation, vocation or business. Facilities are also being provided
to women in areas where they can grow and blossom as persons in their own right.
Women have proved in modern days that they are no less than men in efficiency, hard
work or intelligence or even they can surpass men in several fields.

6) Model Role:
Women, like men, are also desirous of contributing their might to the economic
development of their country. Similarly, our women in India would like to play a key
role model. They have already entered other fields like politics, education, social field,
administration, etc. Now they have started entering the business field where they can
also show their importance as in other fields.

7) Family Occupation:
Family occupation is an important factor motivating a woman member to participate in
the family business, along with her husband and other members of the family. There is a
great need for women to undertake economic activity or business of the family and
support their families in family occupation or family business so as to reduce the
expenses of the family business and increase its income.

8) Employment Generation:
Another influencing factor that motivates women to become entrepreneurs is the
creation of employment opportunities. Women entrepreneurs generally take up labour
intensive small scale and village industries or handicrafts and they have high potential in
employment generation. Therefore, they serve as a solution to the widespread problem
of women unemployment to some extent.

9) Self Identity and Social Status:

Women desire to enjoy some social status and recognition in the society. Women
entering business can achieve such a position of self-identity and recognition of social
status because they come in contact with high level officers, ministers, authorities, and
others holding high positions.

10) Growing Awareness:
With the spread of education and the growing awareness among women, the women
entrepreneurs have been increasing, not only in the kitchen extension activities i.e. the 3
Ps viz. pickles, powder (masala) and papad or the traditional cottage industries, such as
toy-making, basket-making etc. as they require less technical know-how, but they are
entering also into engineering, electronics and many other industries which require high
level technical skill. Thus, women entrepreneurs are found in such technical industries as
T.V. capacitor, electronic ancillaries, and small foundries.

Factor Facilitating Needs:

Facilitating needs are the needs for providing various facilities for the successful
working of the women enterprises.

These are given below:

1) Adequate Financial Facilities:
Finance is the life-blood of any business, whether it is run by men entrepreneurs or
women entrepreneurs. The Government has set up industrial estates for women. It
should therefore provide the required financial facilities to the women entrepreneurs so
as to motivate them to start their business or industry in such estates.

Several financial schemes like Mahila Udyam Nidhi, Marketing Development Fund etc.,
have been set up only for women entrepreneurs. In addition, banks and development
finance institutions also provide financial assistance to women entrepreneurs. Women
will be tempted to start their own business ventures when such facilities are easily
available to them.

2) Innovative Thinking:
Innovative thinking in women motivates them to become entrepreneurs. Women who
have entrepreneurial talent and who have innovative thinking are naturally induced to
take up small business or industry to convert their innovating and talent into a position
of entrepreneurship instead of employment.

3) Support and Cooperation of the Family:

Another important factor that induces women to take up entrepreneurship is the full
co-operation and encouragement of the family members, particularly, husband,
father-in-law and mother-in-law, grown-up sons and daughters and other members, if
any. In a modern educated family, women members generally enjoy more liberty and
economic freedom. So naturally, they will be anxious to have their own source of
income from their business.

4) Availability of Experienced and Skilled Women:

Women entrepreneurs would be able to provide experienced and skilled people to family
occupations. Therefore, women will be motivated to become entrepreneurs.

5) Development Programmes:
The Central and State Governments have started several development and training
programmes particularly for women so as to enable them to become entrepreneurs. Such
training and development programmes provide all types of facilities to women to start
their business independently.

Women Entrepreneurship – Areas

Women entrepreneur in earlier years after independence were confined to
entrepreneurship in traditional areas like food, fruits, vegetables, pickles, papads,
tailoring, hosiery etc. However, often, Women entrepreneurs have branched out to
several new areas like engineering, beauty parlours, jewellery, handicraft, electrical,
electronics, chemical and other manufacturing. This shows that entrepreneurial base of
women expanded from traditional 3Ps – pickle, powder and papad to modem 3ES –
Engineering, Electrical and Electronics.

There are vast numbers of industries under small business sector where women are
playing a major role.

Such industries can be listed as under:

1. Agriculture and Allied industries – such as sericulture, horticulture, dairying and
animal husbandry etc.

2. Home based industries-such as handicrafts, Agarbati, Candle making,  bidi industry,

hosiery, and textile, doll making, jewellery pottery, designing etc.

3. Outside home industries – such as electrical and electronics, food processing etc.

Fredrick Horbison has enumerated the following functions five functions of a

woman entrepreneur:
1. Exploration of the prospects of starting a new business enterprise.

2. Undertaking of risks and handling of economic uncertainties involved in business.

3. Introduction of innovations or imitation of innovations.

4. Co-ordination, administration and control.

5. Supervision and leadership.

It is important to note that different scholars have defined different sets of functions of
entrepreneurs, whether male or female entrepreneurs.

However, all these functions can be classified broadly into three categories viz.:
a) Risk-bearing

b) Organisation and

c) Innovation

As an entrepreneur, a woman entrepreneur has to perform all the functions involved in

establishing an enterprise. These functions include idea generation and screening,
determination of objectives, project preparation, project analysis, determination of forms
of business organization, completion of promotional formalities, raising funds, procuring
men, machine and materials and operation of business.
According to Frederick Harbison, like a male entrepreneur, a woman entrepreneur
has five functions – viz.:
1. Exploring the prospects of starting new enterprises,
2. undertaking of risks and the handling of economic uncertainties involved in business,
3. Introduction of innovations or initiation of innovations.
4. Co-ordination, administration and control, and
5. Supervision and providing leadership in all business aspects.
The above functions can be summarised into three i.e., risk bearing, organisation and
innovation. These functions are not always of equal importance. Risk bearing and
innovation are of paramount importance for establishing or diversifying an enterprise.
Organisation is needed for improving the efficiency of operation of the undertaking.

RURAL INDUSTRIALIZATION

One of the central problems impinging significantly on rural development is the

shrinking employment opportunities in rural areas. Seasonal unemployment, partial
unemployment, artisans who are at the margins because the technology they use has
become obsolete is common in Indian villages. Finding jobs to match the skills of the
people is one enormous task for any government. Agriculture is widely found to be
non-remunerative. This has accelerated migration to urban areas in a big way, worsening
the situation of urban poverty. A recent challenge to development in rural areas is
distress departure from agriculture. The paradox is that commercial exploitation of
resources in rural areas is systematically done by corporate interests. The dearth of
access to information, knowledge and technology make rural people to stand away and
watch their resources such as land, sand, soil, water, vegetation, herbs, trees etc. being
exploited by profiteering interests. The unlettered or semi-literate rural people wind up
their business in villages, and get set to depart to urban centres in search of employment
in the cities. Commencing from the mid-1950s, one of the best strategies that India has
been adopting for employment generation, especially in rural areas is rural
industrialization. There are several concepts, models, and experiments that are
successful in rural industrialization and in mass employment generation in several parts
of the country. They are also known as non-agricultural sub-sector. After studying this
unit, you should be able to:

• Explain the significance of rural industrialization.

• Role of rural industries in development.

• Features and types of rural industries in India.

Meaning Industries are places that manufacture goods or articles for the consumption of
the masses. Industries generate employment for the society. Industries contribute to the
economic development of a nation. Rural industries are non-farm activities that depend
on rural resources, and are primarily meant for employment generation through effective
utilization of locally available resources, human power and technologies that are native
or home-grown. These are by nature small-scale. These are usually based in villages.
Hence, they are popularly addressed as: small-scale industries / village industries / rural
industries. Since employment generation is one of the essential objectives of rural
industries, they usually work with the philosophy of production by masses-as opposed to
mainstream industries where goods are mass produced. It aims at reducing
unemployment levels, and enhancing the individual and household incomes. Since the
scale of activities is small, the financial requirement is also usually small. According to
T M Dak, the concept of “rural industries” itself lacks uniform and accepted definition,
is used interchangeably with such terms as, “artisan industries” etc. The Planning
Commission first used the term “rural industries” when it recommended a rural
industries projects programme in the year 1962. In a report on Village and Small
industries sector, the Planning Commission (1988) defined rural industries in the
following lines, “The term ‘rural industries’ connotes such types of industries as khadi,
Village industries, handloom, handicraft, sericulture, coir and tiny and service industries
situated in rural areas”.

Significance of Rural Industrialization

In most developing countries – including India – the rural labour force has been growing
rapidly but employment opportunities have been dwindling. As the land available for
expansion of agriculture becomes increasingly scarce, opportunities for non-farm
employment must expand, if worsening rural poverty is to be checked. Given the
expected growth and composition of large-scale urban industries, they are unlikely to be
able to absorb the rising tide of workers migrating from the countryside to the cities. We
must slow down the process of the urban spread, with its high social and environmental
costs, such as congestion, pollution, skyrocketing land costs etc. Therefore, diversion of
manpower becomes imperative from agriculture sector to industry and service sectors.
Since employment in the service sector, particularly in rural areas is limited, the
development of industrial sector, especially in rural segment is essential. The rural
industrialization is considered as a vehicle for the generation of productive employment
and income for the generation of productive employment and income for the rural poor.
The significance of rural industrialization can be attributed due to following factors:

i) They can slow down urban migration and thereby ease the problems of
urbanization.
ii) They lead to improvement in environment by reducing the concentration of
industrial units in big cities.
iii) They can increase rural income and generate nonfarm employment to the
farmers.
iv) They can reduce both skilled and unskilled unemployment.
v) They can promote balanced industrialization by avoiding excessive industrial
concentration.
vi) They are based on the local needs and can better meet the local consumption
needs. Thus the decentralization of industries to rural areas is one of the best
possible development strategies for thickly populated country like India.

Objectives of Development of Village and Small Industries

According to one of the Five year plan, the objectives of the development of village and
small industries are:

i) to assist in the growth and widespread dispersal of industries; Rural

Industrialization
ii) to increase the levels of earnings of artisans;
iii) to sustain and create avenues of self-employment;
iv) to ensure regular supply of goods and services through use of local skills and
resources;
v) to develop entrepreneurship in combination with improved methods of
production through appropriate training and package of incentives;
vi) to preserve craftsmanship and art heritage of the country

India is principally an agrarian economy about three- fourth of the Indian population
lives in country and out of which 75% remains earning its livelihood from agriculture
and its allied activities. There is a wide gap between the economic activities of the rural
and urban people. Rural Population is more or less dependent on agriculture whereas
industries are exclusively located in urban areas. Moreover, the growth in agriculture
sector is much slow than industry which widens the income level gap between both.
Further, the relationship between the agriculture and industry has a dependency structure
which puts the rural area at more disadvantageous position in terms of gain and thus
leads to poverty and backwardness. Therefore there is a need of the rural development
which can be best done through rural entrepreneurship.

Concept of Rural Entrepreneurship

Rural entrepreneurs are those that perform entrepreneurial activities by establishing

industrial and business units within the rural sector of the economy.(Ajmeri, 2012)
“Rural Entrepreneurship are often defined as entrepreneurship rising at village level
which can take place in a variety of fields of venture such as business, industry,
agriculture and acts as a powerful reason for economic development”. Industries coming
under the purview of Khadi and Village Commission (KVIC) are treated as rural
industries. According to KVIC, “village industry or rural industry means any industry
located in country , population of which doesn’t exceed 10,000, or such other figure
which produces any goods or renders any services with or without the utilization of
power and during which the fixed capital investment per head of an artisan or worker
doesn’t exceed a thousand rupees.” (Misra, 2005)
To enlarge the scope, the definition has been tailored recently by the govt. accordingly;
any industry located in country, village or town with a population of 20,000 and below
and an investment of Rs. 3 crores in plant & machinery is classified as a village industry.
(Source: Government of India) Village industries are grouped into seven categories as
follows:

1. Mineral-Based Industry: e.g stone crushing, cement industries, red oxide making,
wall coating powders etc.
2. Forest-Based Industry: e.g wood products, bamboo products, honey, coir
industry, making eating plates from leaves.
3. Agro-Based and Food-Based Industry: e.g sugar industries, jaggery, oil
processing from oil seeds, pickles, fruit juice, spices, dairy products etc
Polymer and chemical-Based Industries: e.g manufacturing of aloevera gel, ball
pen ink, aggarbatti.
4. Engineering and non-conventional energy-based Industries: e.g agriculture
equipment.
5. Textile Industry: e.g spinning, weaving, colouring, bleaching. — Service
Industry: e.g tractors and pump sets repairs etc.

Types of Rural Entrepreneurship

a. Individual entrepreneurship: It is the type of the entrepreneurship where the single

entrepreneur is the owner or the sole proprietor. The entrepreneur bears the whole risk
and is solely responsible for the business decisions.
b. Group Entrepreneurship: It is mainly classified into three types:

⮚ Private limited company

⮚ Public limited company
⮚ Partnership
1) Private limited company: In this case, minimum two members are required and
maximum members are 50. The financial capital is divided into shares and shares are not
sold to the general public. Therefore such companies are generally small in size and are
owned by the families. Liability of the shareholders is limited in such companies.
2) Public limited companies: in such companies, minimum seven members are required
and there is no maximum limit. Being a public limited, it can raise money from the
overall public. There is separation between the control and ownership. Shareholders are
the owners but they do not take active participation in the running of the business. The
control of the business is in the hands of the board of directors.
3) Partnership: In this case there is no individual owner and the business is handled by
the partners (maximum 20). For the partnership, mutual trust is must and all the partners
should complement each other for common goals and objectives. Partnership companies
are easier to form and provide large resources but it has unlimited liability on the
partners.

c. Cluster formation: it’s a proper and informal group of individuals to realize

common objectives. It includes NGO’s, VO’s, SHG’s & CBO’s.
1) NGO’s (Non-Government organisations): These are the non – profit
organisations sponsored or formed by the government and are registered under the
Society’s Registration act, 1860. A minimum seven people are grouped together for
the socio- economic growth of the people. These are the formal organisations and
usually receive funds from the government.
2) VO’s (Voluntary Organisations): These are the organisations generally initiated
by the individuals to serve the society and for the socio economic development of the
people. These organisations may or may not register under any act. Such
organisations are generally sponsored by the NGO’s or the Government.
3) SHG’s (Self Help Groups): These groups are mainly consisted of 10-20 people
and are formed with the objective to mutually help each other. These groups are
sponsored by the NGO’s, VO’s and sometimes by the Government for the socio –
economic development of the backward people. It is an informal organisation.
4) CBO’s (Community based organisations): They are informal in nature and are
formed with the objective to enhance the bargaining power of the community. People
from the common living are or from the common community come together with the
 common objective of up-liftmen of the community.
D. Cooperative:

 Consistent with the International cooperative alliance (ICA), “a cooperative is an

autonomous association of persons united voluntarily to satisfy their economic, social
and cultural needs and aspirations through a jointly owned and democratically controlled
enterprise. “Need of Rural Entrepreneurship: There is a requirement of the agricultural
entrepreneurship to develop the agricultural economy. Rural entrepreneurship is needed
because of the following reasons:
1. Employment Generation: Rural Entrepreneurship may be a labour intensive and
requires sizable amount of human resource. Therefore, it has a large potential of
employment generation and can reduce the problem of unemployment in rural area.

2. Income Generation: By providing employment, rural entrepreneurship has potential

for income generation and thus bridging the gap between the rural and urban disparities.

3. Rural development: Rural entrepreneurship helps in setting industries in rural areas

and thus leads to the employment generation and income generation which directly help
in rural development.
4. Curbs Rural – Urban migration: Rural development helps in curbing the rural – urban
migration by reducing the unequal growth in cities.
5. Environment Friendly: Rural industries are more environment friendly thus leads to
the development without damage.
6. Builds up Village republics: Development of the rural industries serves as an effective
means to build village republics and thus make them more independent.
7. Improved standard of living: As rural entrepreneurship helps in income generation
which helps in prospering the community and thus improving their standard of living.
8. Balanced regional growth: Rural entrepreneurship will direct the concentration of
industries in rural areas which leads to the balanced regional growth.

Scope of rural entrepreneurship:

⮚ Rural entrepreneurship is active and is opening new scopes for the entrepreneurs
and are discussed as follows:
 ⮚ Rural area has the capacity of small and medium enterprises and these sectors
acts as the economy builders by generating Employment and income for poor
and unemployed people and is contributing more than 52% of the GDP.
⮚ Moreover, there is a rapid expansion in the small and medium industry arena.
Therefore, Repair shops, service centres, PCO, internet café, hiring of agriculture
implements & tractor, computer and other skill training centres have good scope
in cluster of villages.
⮚ Entertainment, cable TV ,rural tourism and amusement parks (near urban areas)
also are a number of the potential areas for rural entrepreneurs in commission
sector
⮚ Various development programs are being executed through Panchayti Raj
Institutions, who are engaging contractors for civil /mechanical works. Rural
youth can start this business.
⮚ Changed consumption pattern has opened up new avenues for trading activities
in rural areas.
⮚ Rural areas are also using large amount of agriculture products like fertilizers,
seeds, pesticides and insecticides etc.

Problems faced in the growth of rural entrepreneurs:

Rural entrepreneurs face sizable amount of problems like illiteracy, risk factor, improper
training and knowledge, limited purchasing power and hard competition from urban
entrepreneurs. Various problems faced by rural entrepreneurs are following.
a) Scarcity of funds: Rural entrepreneurs find it difficult to get external funds due to the
risk involved in the rural industries. Moreover, the procedure to avail loan facility is just
too long and cumbersome that its postponement often disappoints the agricultural
entrepreneurs.
b) Competition: Rural entrepreneurs face tough competition from large scale industries
and therefore the urban entrepreneurs as their cost of production is high thanks to high
input cost.
c) Middlemen: As there is small market available for the rural entrepreneurs so they are
heavily dependent on the middlemen for marketing of their products and thus
Middlemen exploit rural entrepreneurs.
d) Legal formalities: As Rural entrepreneurs are illiterate and ignorant in order that they
find it extremely difficult to suits various legal formalities in obtaining licenses.
Moreover, the legal formalities are so complex and time consuming that it become tough
for the entrepreneurs.
e) Procurement of staples: Arranging raw material is basically a troublesome task for
rural entrepreneur. They may finish with poor quality raw materials and can also face the
problem of storage and warehousing.
f) Risk element: Rural entrepreneurs face tough competition from large scale industries
and don’t have large market available for them. Therefore, have much less risk taking
capacity due to shortage of financial resources and external support.
g) Lack of technical knowledge: Rural entrepreneurs suffer a drag of lack of technical
knowledge because rural people are illiterate and lack of coaching facilities which acts
as hurdle for the rural development.
h) Lack of infrastructural facilities: Though government is putting its best efforts but
the growth of the rural entrepreneurs is not very healthy due to lack of proper and
adequate infrastructural facilities.
i) Poor quality of products: Rural entrepreneurs produce inferior quality of products
due to lack of availability of standard tools and equipment and the availability of poor
quality raw materials.
j) Negative attitude: The environment within the family and society isn’t favourable to
support rural people to require up entrepreneurship as a career. It may flow from to lack
of awareness and knowledge of entrepreneurial opportunities.

Advantages of Rural entrepreneurship:

 Abundance of Resources: Rural areas have abundant natural resources including land,

water minerals and solar power and also wind power. Moreover land is easily available
at cheap rates.
⦁ Easy availability of labour: Semi skilled and unskilled labour is easily available and
low wage rates increases the vulnerability of rural areas for industrialization.
⦁ Tax advantage: Tax burden in rural areas is low, which increases competitive strength
of rural industry.
⦁ Low investment: Rural industries can be started with low investment and Production
can be done at a less cost due to easy availability of resources.
⦁ Employment: Rural Industries generate jobs in the developing countries like India
where the unemployment is the main problem.
⦁ Slow down urban migration: As rural industries create jobs, therefore it slows down
the rural – urban migration which creates problems in urban areas.
⦁ Meet demands: in developing countries like India, where the population is extremely
large, rural industries can help in meeting demands arising from local consumption
needs.
The role of rural industries is of important importance in our country thanks to
above-mentioned advantages.

Developmental strategies for rural entrepreneurship:

While developing strategy for industrial enterprise in rural areas, it is necessary to take
into consideration the totality of rural reality in terms of resources physical and human
as also environmental. It is believed that following approaches are often used for
formulating strategy for rural industrial enterprise:
⦁ Harmonize Govt. efforts: Government should synchronize its initiatives with some
NGO’s or the agencies working for the rural development so that policies can be
implemented in a perfect order for the rural growth.
⦁ Technology development: Provisions should be made to provide the rural population
with the latest technologies so that rapid development can takes place.
⦁ Basic training for prospective rural entrepreneurs: Prospective entrepreneurs must
be identified and basic training should be provided. They should be motivated by telling
the success stories of the different entrepreneurs.
⦁ Skill enhancement training programs: Such training programs should be provided to
the rural population so that skilled workers can be available for the rural industries.
⦁ Modern infrastructure facilities: It is necessary to create modern infrastructural
facilities in the rural areas so that entrepreneurs can be attracted.
⦁ Credit supply: banking and non-banking agencies should provide the funds at cheaper
credit and at short terms and conditions.
⦁ Co-ordination between small and large industries: collaborations should be
encouraged between small and large scale industries so that cheaper products made by
small industries can be marketed at large scale.

Role of NGO in Development of Rural Entrepreneurship

Rural entrepreneurship is one of the most important factors for the rural development to
remove the problem of unemployment and poverty. Therefore, it is the need of the hour.
Government has taken many initiatives for the rural development and started various
self-employments and poverty alleviation programmes like Pradhana Mantri Rozgar
Yojna, IRDP, and TRYSEM etc. but proved ineffective due to the improper execution of
the programmes. For the rural development, one has to be at the grassroots to identify
the problems and then find the solutions and this can be done only when one is in the
contact of the rural population.

Such a situation necessitated the need of the NGO’s to join hands with the Government
and find the problems and thus helps in the execution of the programmes implemented
by the government. Government therefore collaborated with the NGO’s to reach the
actual problems of the rural population.
Today we have large number of the NGO’s working for the rural entrepreneurship. The
main NGO’s are: National Alliance of Young Entrepreneurs (NAYE), World Assembly
of Small and Medium
Entrepreneurs (WASME), Xavier institute for Social Studies (XISS), SEWA of
Ahmedabad, ‘Y’ Self-employment of Calcutta, AWAKE (Association of girls
Entrepreneurs of Karnataka), and Rural Development and Self-Employment Training
Institute (RUDSETIs) based in Karnataka:

NGO’s functioning for the rural entrepreneurship can be classified into three types:

A. Primary level NGO’s

B. Secondary Level NGO’s

C. Grass root level NGO’s.

A. Primary Level NGO’s: These are the NGO’s who assemble their own resources and
implement developmental activities on their own and works at international level.
Example: ACTIONAID, OXFAM, Christian Children Fund, etc. are some of the best
examples of primary level NGOs in India.
B. Intermediate NGO’s: These are the NGO’s who arrange funds from the external
agencies and impart training and conduct workshops for the target group. Example:
SEWA and AWAKE are samples of intermediate NGOs

C. Grass Root Level NGO’s: These are the NGO’s who make direct contact with the
target group and work at the grass root level. Example: Such NGO’s are RUDSETIs,
ANARDE Foundation (Gujarat), Indian Institute of Youth Welfare (IIYW) of
Maharashtra etc.
The training imparted to the agricultural population is often divided into three types:

i. Stimulation: Conducting workshops and trainings for the rural population to stimulate
the entrepreneurial attitude amongst them.

ii. Counselling: Providing counselling and consultancy services to the rural

entrepreneurs regarding Project analysis, selection of an idea, preparation of business
plan etc.

iii. Assistance: Providing help to the target group in financial support and providing
market for their products.
The NGOs can convince be a boon for rural entrepreneurship thanks to following
reasons:
a. NGO’s works at the grassroots level so they are near to the rural population which
helps in understanding them well.
b. their experiments with the community can helps in developing policies.
c. working of the NGO’s is flexible so they help in formulate appropriate solutions and
can tailor to meet the individual needs..
d. NGO’s concerns with the rural poor, so can reach at the remote locations, where it is
not possible for the government to reach.
e. Due to their flexibility, they have the capability to innovate and adapt using
technology transfer and settle them according to the local conditions

(UNIT-III)
 PANCHAYATI RAJ SYSTEM IN INDIA: A WAY AHEAD

INTRODUCTION

India, primarily, is a land of villages and around 72% of the total population of India
resides in the rural areas. The rural areas thus forms the roots for the governance in India
and the democracy should start thereon. Mahatma Gandhi also said that the main
element for the development and for the governance should not be the big cities rather
the village because it is where India resides. In India, we have a unique system for
governance at the village level. The governance of such small unit of India is by the
Institutes, called the Panchayati Raj Institutions. The Panchayati Raj Institute derives
their existence from the Constitution under Part IX under the head The Panchayats. The
story of Panchayat is not just a few decades old; rather it has been prevalent in India
from ages.

In the Rigvedic period, i.e. around 1200 B.C. there were Sabha that has the primary
function of the administration of the area. This concept of Sabha gradually converted to
the panchayat and it was so called because it was headed by 5 people. In the Medieval
period, the panchayati system deteriorated because of the increase in the Zamindari
system in the rural areas. The task of administration slowly got converted to tax
collection as a result thereof. At this time also the village had a separate mechanism for
its administration though the concept of panchayati raj got deteriorated.

With the change in the dynasties ruling India, the concept of Kotwal came with the
Mughal era whose task was to undertake the administration of the area assigned, to
collect tax and other incidental functions. But the concept of Kotwal also got
deteriorated with the inducement of cast system and feudalism in India especially after
the British invention. In the British era, the Government was not in favour of any
decentralization, therefore after the mutiny of 1857, they came with the Government of
India Act, 1858 and removing the decentralization. Lord Mayo in 1870 advocated for
decentralization, but it was unapproved. Subsequently, Lord Rippon advocated for
decentralization but the same was approved till the extent of urban areas. Then came the
Royal Commission in 1907 which advocated for village panchayat but it was not
accepted due to various reasons.
Further in the Montego Chemsford Reforms that were carried out in 1919, right after the
World War I wherein England was not in a strong position, some autonomy to the
provincial government was given to the provincial government and some powers were
given to the elected representatives. There were two separate Lists under the laws, one
for the Governor and second for the elected local representatives. Further, under the
Government of India Act, 1935 all the powers were taken back because both the lists
that were legislated were repealed and therefore the decentralization was again
withdrawn.

Meanwhile, during the formation of the Constitution of India, in the Constituent

Assembly, Panchayati Raj was kept under the heads of Directive Principles of State
Policy under Part IV of the Constitution mainly because of the political instability of the
new government and the paucity of funds and therefore it was not practically possible
for the newly formed India to have a third tier of the Governance which was right at the
lowest tier in the country. 5 After the Indian independence, there were various
committees that tried to give a proper structure to the Panchayati Raj in India. These are:

⮚ Balwant Rai Mehta Committee, 1957: this committee mainly it advocated for the
basic level of administration be at the Block level.
⮚ K. Santhanam Committee, 1963: advocated that the Panchayati Raj Institution
(PRI) be given the powers to levy tax and it should become as the main source
for the funding of the institution.
⮚ Ashok Mehta Committee, 1978: This committee suggested that the Panchayai
Raj Institute shall be a two tier body which should operate at the Zilla level and
the Mandal level. The nodal area would be at the Block Level (taken care of by
the Block Development Officer) and Zilla Parishad shall have an advisory role to
both, the State Government and to the Block level institution.
⮚ G.V.K. Rao Committee, 1985: this committee again advocated for a three tier
system. It said that the PRIs should be at district and local level. The District
Development Officer (DDO) shall be appointed for the main administration of
the village units.
⮚ L.M. Singhvi Committee, 1986: this committee advocated that in order to
establish a governing body for any part of India, it must be given a Constitutional
structure. As a result, 73rd Amendment was made to the Constitution and Part IX
A was inserted as the Panchayats.
STRUCTURE OF THE PANCHAYATS

In spite of the fact that the essential structure of the PRIs is indistinguishable over the
conditions of India; it is portrayed by means of various classifications in various states.
Panchayats in each state has its own attributes and even race strategies to these
establishments are at fluctuation from area to area. A District Panchayat or Zilla
Parishad is established for every region. Every district has one Zilla Parishad. Likewise
Block Panchayats or Panchayat Samitis are established for the said area.

A Block might have a few towns under its jurisdiction; on the other hand Gram
Panchayats are not inexorably co end with every town. Contingent upon the measure of
populace (in actuality, number of voters) a Gram is characterized under the law with a
particular geological zone, which might comprise of a solitary town or a group of
connecting towns. Panchayati Raj Institute has the following bodies under it:

ZILLA PANCHAYAT

Every Panchayat under a Zilla Parishad chooses one/two/three individuals directly

(contingent upon number of voters inside of it). Presidents of all the Block Panchayats
are likewise ex-officio individuals from the Zilla Parishad. In a few expresses the
Member of Legislative Assembly (MLA) and Member of Parliament (MP) of the
locale/body electorate are additionally ex-officio individuals.

BLOCK PANCHAYAT OR PANCHAYAT SAMITI

Every Gram Panchayat under a Block Panchayat chooses one/two/three individuals

specifically to the Block Panchayat. Gram Pradhans are ex-officio individuals from the
Block Panchayats.

GRAM PANCHAYAT

A Gram as characterized under the Act (which means a town or a bunch of towns) is
separated into at least five voting demographics (again relying upon the quantity of
voters the Gram is having). From each of these voting demographics one part is chosen.
Body of these chose individuals is known as the Gram Panchayat. Size of the Gram
Panchayats fluctuates generally from state to state. In states like West Bengal, Kerala
and so on a Gram Panchaya has around 20000 individuals on an average, while in
numerous different states it is around 3000 as it were.
GRAM SABHA

In a large portion of the states, every voting public of the individuals from the Gram
Panchayat is known as the Gram Sabha and every one of the voters of the same body
electorate are individuals from this body. In any case, in a few expresses this is called
Ward Sabha/Palli Sabha and so on. In West Bengal it is called Gram Sansad (town
parliament). Gram Sabha in West Bengal has an alternate importance. Here every one of
the voters of the Gram Panchayat overall constitute the Gram Sabha. Under the
Constitution, there can be just three levels of the Panchayat. The Gram Sabha is not a
level of the Panchayati Raj framework. It doesn't have any official capacity and works as
a suggesting body as it were. Gram Sabhas hold gatherings ordinarily 2 to 4 times each
year; however they can meet as and when important. In a few states dates of these
gatherings are altered (Madhya Pradesh, Gujarat and so on) while in others dates are
settled by the Gram Panchayats. Issues to be talked about in the gatherings can be far
reaching yet the crucial motivation ought to include: Annual Action Plan and Budget,
Annual Accounts and Annual report of the GP, choice of recipients for various social
administration programs (Pradhan Mantri Awas Yojana , various Pension Schemes to
name a few), recognizable proof of plans for planning of Annual Plan for advancement
programs (e.g. MGNREGA) of Gram Panchayat, thought of the Audit reports,
investigations of Gram Panchayat's execution and so forth.

FEATURES OF 73rd AMENDMENT OF THE CONSTITUTION

After the recommendations of the L. M. Singhvi Committee, the Panchayati Raj

Institutions were a given a Constitutional status under Part IX of the Constitution. The
Part was added by the virtue of the Seventy Third Amendment Act. Some of the features
of the Act are:

❖ It did not apply to Schedule V areas of 9 states, schedule VI areas of North East,
Darjeeling District and Jammu & Kashmir.
❖ Panchayati (Extension to Scheduled Areas) Act, 1996 was brought to extend the
Panchayati Raj Institutions to the Scheduled and Tribal areas under Schedule V
areas of 9 states. It also recognises the control of the Panchayati Raj Institutions
over the natural resources of the area.
 ❖ The Panchayati Raj Institutes should be a 3 tier body for the State having
population more than 20 lakhs, making to get some uniformity in the structure in
the country.
❖ The election for the Panchayats takes place every 5 years and the elections are
conducted by the State Election Commission, under the supervision of the State
Election Commissioner.
❖ The Amendment provides for the reservation for women and SC/STs for
effective participation in the rural areas and to make people reinstate their faith in
the governance of the country.
❖ There is a provision for the constitution of the State Finance Commission to
make recommendation to the State Government as far as the fiscal matters and
other allied matters relating to the Panchayats are concerned.
❖ To establish the District Planning Committee.

ISSUES IN PANCHAYATI RAJ TODAY

Even after the implementation of the Panchayati Raj Institutions in India in almost every
state, still there seems to be various issues that are yet to be dealt in order to ensure
effective participation of these institutions. Some of them are:

⮚ In India, there are around 2, 32,278 panchayats at the village level; 6022 at the
intermediate level; 535 at the district level still the panchayats has minimal
powers to generate revenue. They do not have the powers to levy taxes and
therefore they are hugely dependent on the State Government for funding.
Therefore it is just a functional autonomy as it seems to be an extended form for
the State Government and no other governing body even after having a
Constitutional status.
⮚ The recommendations of the State Finance Commission are not accepted. The
State Finance Commission is meant to ensure an effective mechanism for the
Panchayati institutions but it seems as if these institutions are merely on papers
and not otherwise.
⮚ There is no uniform system of election across the country as it is conducted by
the State Election Commission. This leads to a functional deformity as the
Constitution gives them an equal status and therefore there should be uniformity
 in the procedure followed in the functioning of the panchayati institutes
throughout India.
⮚ Out of the total panchayats, 27 lakh people are elected throughout India wherein
37% are women; 19% are SC and 12% are ST.
⮚ Till November 2006, 8 states and 1 U.T. have transferred all 29 functions or
subjects to the PRI. This clearly shows that in India the panchayats are merely an
extension of the State and are not like a separate administrative unit, having a
unique constitutional status. Kerala is the only state which has developed 40% of
its plan outlay to the PRIs. It is important to note that only 13 states and 4 U.T.
have constituted the District Planning Committee.
⮚ Even in the daily functioning of the panchayati there are various lacunas like the
problem of the proxy role exists because there are a few recognized people in the
village that only run the system and not the actual elected candidate.
⮚ Even after the legislative of keeping the panchayats clean from politics, there still
exists influence of the bureaucracy and the political parties.

CONCLUSION AND SUGGESTIONS

The concept of panchayati raj is not a recent one in India. There have been traces
wherein the said system has been found working effectively in administration of the
small units of the countries, like the villages. This concept has been acknowledged by
various Constitutional framers and keeping in mind the Constituent Assembly’s intent in
mind, this has been given a Constitutional status under Part IX by the virtue of the
Seventy Third Amendment. Even after two decades of the working of the panchayati raj
in India constitutionally, there have been various issues in its effective functioning.

It would not be wrong to say that the panchayati raj institutions have started playing
their administrative role in the manner it was thought to be. But the problem comes at
the stage of the input from the major stakeholder, i.e. the public at large. The institution
is today induced by various ill practices like the proxy voting or the corruption at large
or the influence of the political parties.

It is thus important to start the reform initially targeting the people, which include
educating the voters as far as making them competent to understand their rights and
duties. Even the functioning of the panchayat in India needs a structural change as it
does not have any powers to levy tax, and therefore it is dependent on the State
Government for financial assistance and loses its independency. The role of the political
parties is also very persistent in the panchayati raj system and thus these issues needs to
be addressed at the earliest. Therefore, it can be seen that the Panchayati Raj Institutions
have worked a long way in implementing the objective that they were thought with. Yet
there comes various problems today that need to be addressed. In India, the majority of
the population belongs to the rural areas and therefore it is needed that the administration
of such units is made effective.

Self-help group (SHG)

What are Self Help Groups?

Self Help Groups (SHGs) are small groups of poor people. The members of an SHG face
similar problems. They help each other, to solve their problems. SHGs promote small
savings among their members. The savings are kept with the bank. This is the common
fund in the name of the SHG. The SHG gives small loans to its members from its
common fund
SHG is an informal group and registration under any Societies Act, State cooperative
Act or a partnership firm is not mandatory vide Circular RPCD.No. Plan BC.13/PL
-09.22/90- 91 dated July 24th, 1991.
Who helps to form SHGs?

A reasonably educated and helpful local person has to initially help the poor people to
form groups. He or She tells them about the benefits of thrift and the advantages of
forming groups. This person is called an ‘animator’ or ‘facilitator’. Usually, the animator
is a person who is already known to the community.
Any of the following persons can be a successful animator:

⮚ Retired school teacher or a retired government servant, who is well known

locally.
⮚ A health worker/a field officer/staff of a development agency or department of
the State Government.
⮚ Field officer or a staff member of a commercial bank/regional rural bank or a
field staff from the local co-operative bank or society
 ⮚ A field level functionary of an NGO.
⮚ An unemployed educated local person, having an inclination to help others.
⮚ A member/participant in the Vikas Volunteer Vahini (VVV) Programme of
NABARD.

Woman animators can play more effective role in organising women SHGs. The
animator cannot organise the groups all alone. He or she will need guidance, training,
reading material, etc. Usually, one of the following agencies help:

● A voluntary agency or Non-Governmental Organization (NGO).

● The development department of the State Government.
● The local branch of a bank.

What does the animator do?

The animator talks to people in the village or at their homes. He or she explains the
benefits of thrift and group formation. No promise of bank loan is given to anyone. He
or she helps the group members to hold one or two initial meetings. The group finds a
group leader, for holding meetings, keeping books, etc. The animator guides and
encourages the leader and the group members.

Functioning of SHGs

Size of the SHG

❖ The ideal size of an SHG is 10 to 20 members. (Advantage: In a bigger group,

members cannot actively participate. Also, legally it is required that an informal
group should not be of more than 20 people.).
❖ The group need not be registered.

Membership

❖ From one family, only one person can become a member of an SHG. (More
families can join SHGs this way.)
 ❖ The group normally consists of either only men or of only women. Mixed groups
are generally not preferred. Women’s groups are generally found to perform
better. (They are better in savings and they usually ensure proper use of loans.)
❖ Members should have the same social and financial background. (Advantage:
This makes it easier for the members to interact freely with each other. If
members are both from rich as well as poor class, the poor may hardly get an
opportunity to express them.)
❖ Some Common factors for Membership in an SHG

⮚ Women/men from very poor households.

⮚ Those who depend on moneylenders even for daily necessities.
⮚ Those with a per capita income not exceeding Rs. 250 per month.
⮚ Those having dry land holding not exceeding 2.5 acres.
⮚ Common living conditions for the Group Members eg. Living in kutcha
houses, having no access to safe drinking water, Presence of illiterate
adults in the family etc.

Meetings

● The group should meet regularly. Ideally, the meetings should be weekly or at
least monthly. (Advantage: They become closer, if they meet regularly. This
helps them to understand each other’s difficulties better.)
● Compulsory attendance: Full attendance in all the group meetings will make it
easy for the SHG to stabilise and start working to the satisfaction of all.
● Membership register, minutes register etc., are to be kept up to date by the group
by making the entries regularly. (Advantage: This helps you to know about the
SHG easily. It also helps to build trust among the SHG members.)

Keeping of Accounts by the SHG

❖ Simple and clear books for all transactions to be maintained.

❖ If no member is able to maintain the books, the SHG may take outside help. (It
has been seen that a boy or a girl from the village with some educational
qualification does this job enthusiastically. After some months, the group can
 even consider giving him or her a small reward for this job.). Animator can also
help.
❖ All registers and account books should be written during the course of the
meeting. (Advantage: This creates confidence in the minds of members who are
unable to read and write.)

Books to be kept by an SHG

⮚ Minutes Book: The proceedings of meetings, the rules of the group,

names of the members etc. are recorded in this book.
⮚ Savings and Loan Register: Shows the savings of members separately
and of the group as a whole. Details of individual loans, repayments,
interest collected, balance, etc. are entered here.
⮚ Weekly /Fortnightly/Monthly Register: Summary of receipts and
payments, updated in every meeting.
⮚ Members’ Passbooks: Individual members’ pass books in which
individual’s savings and loan balance outstanding is regularly entered.
(Advantage: this encourages regular savings.)

Major Functions of an SHG

Savings and Thrift:

❖ All SHG members regularly save a small amount. The amount may be
small, but savings have to be a regular and continuous habit with all the
members.
❖ “Savings first — Credit later” should be the motto of every SHG member.
❖ SHG members take a step towards self-dependence when they start small
savings. They learn financial discipline through savings and internal
lending. (Advantage: This is useful when they use bank loans.)

Internal lending:

❖ The SHG should use the savings amount for giving loans to members.
❖ The purpose, amount, rate of interest, schedule of repayment etc., are to
be decided by the group itself.
 ❖ Proper accounts to be kept by the SHG.

Discussing problems:

 In every meeting, the SHG should be encouraged to discuss and try to find
solutions to the problems faced by the members of the group. Individually, the
poor people are weak and lack resources to solve their problems. When the group
tries to help its members, it becomes easier for them to face the difficulties and
come up with solutions.

Taking bank loan:

The SHG takes loan from the bank and gives it as loan to its members.

Human Resource Development in Rural Sector (Unit -IV)

INTRODUCTION

The concept of human resource development first introduced by Len Nadler at

American Society for Training and Development in United States of America in 1969.
Len Nadler defines Human Resource Development as an organizational learning
experience with a given period of time with the objectives of producing the possibility of
performance change. Human Resource Development strives to improve quality,
consciousness among individual work force through all its sub-systems. Among the
sub-systems, performance appraisal, training and development are given the highest
priority as they are directly involved in skill building and development. After getting
freedom from British rule, Pakistan has achieved tremendous progress, in almost every
sphere of human life. It may be in Agriculture, Animal husbandry, Horticulture,
Defence, Education Science and Technology. The living standard of the people has
improved significantly.

The literacy rate has also increased up to. The infrastructure like Roads, Electricity,
Schools, Banks, in villages has been developed to a level of satisfaction. It is easier to
purchase car and other luxury items by any individuals. The more important is the
maintained of car in good working condition. The more important is to maintain the
rural infrastructure in good condition. The strategies for rural development have
therefore to be developed, so that Pakistan could not only maintain this achievement but
also reach higher standards in all aspects of rural development.

Concept of Human Resource Development Human Resource Development (HRD) has

become major function of Human Resource Management. This effort will entail more
than the expenditure of money, it will require radical changes in our system of values in
the way we evaluate human resource in their working environment, regardless, of the
type of organization and in the way we view the management function itself, regardless
of the product or service. John Ingalls says, the new concept, which can satisfy the above
problems are HRD. It enables to foster continuous development of increased human
capacity and performance with a competency based management system. Human beings
also have a need to develop themselves professionally. Development of the capabilities
keeps them psychologically sound. This development needs to be mentioned in terms of
marketing it with organizational requirements. According to Lippitt, HRD system
depends on various factors like:

(a) Work itself which generate a higher degree of responsibilities for the employees.

(b) The individual personal and professional growth,

(c) The improved quality output as a result of increased responsibility, and,

(d) Organization as an open system The HRD System should be such that it should
maintain all people involved. It should developed newer and creative qualities in
employees.

The term HRD has become very popular in last decade and particularly the emerging of
international organizations. Most of the organizations started renaming their training and
development department as a Human Resources Development Centre’s and some created
new departments. Later, some other personnel management functions like performance
appraisal, potential appraisal, career planning and development and data storage system
are included as sub-systems of Human Resource Development.

Human Resource Development UNDP (1991)

Defines Human Resource Development as the policies and programs that support and
sustain equitable opportunities for continuing acquisition and application of skill,
knowledge, attitude and competencies which promote individual autonomy and are
mutually beneficial to individual organization, the community of larger environment of
which they are part. Implied in the above conceptualization of Human Resource
Development of many facts of development of people included their physical,
intellectual, emotional, social, moral, political, spiritual, and other forms of
development. Strategies for Sustainable Rural Development Rural development is the
multi-dimensional aspect of rural areas of India. The Strategies for sustainability will
therefore be multi-dimensional. The important dimensions in rural development are:

⮚ Education
⮚ Health
⮚ Women and Child development
⮚ Rural Electrification
⮚ Rural Industries
 ⮚ Infrastructure Development
⮚ Rural Financial institutes
⮚ Rural marketing
⮚ Co-operative societies
⮚ Land Based Programs Agriculture Animal Husbandry
⮚ Horticulture Social Forestry
⮚ Soil and Water Management

HRD AT MACRO AND MICRO LEVEL

Human Resource Development as started earlier, mainly concern development in people.

When we call it as people-oriented concept, the questions should like be the people, be
developed in the larger and National context or in institutional context? Is it different at
the Micro (institutional) and Macro (National) level issues?

Macro Level

A Macro level HRD is concerned with the development of the people for the nation’s
wellbeing’s. It deals with the health capabilities, skills and attitude of the people, which
are more useful for the development of the Nation While calculating the national income
and economic growth perspective HRD concept examines the individual potentialities,
their attitude, aspirations, skills knowledge, etc. and establishes concrete base for the
economic planning and the measures to control inflammation. However, HRD
contribution has not been popularized.

Micro Level

HRD has great concern for gross root development in the organizations. More so it is
well received by the management of the companies as they realized its importance and
foresaw its future contribution for the individual and organization development.
Basically HRD micro level deals with the performance appraisal, potential appraisal,
training and development, career planning and organizational development. There
should be effective orientation for the new employees create a positive impact on the
performance of the employees.

Trainings should be provided to the SMEs firms to generate more innovative products.

❖ Activity for Growth

 ❖ If small firm had the objective of high growth, how would its strategies be
different from business with less ambitious growth plans?
❖ Strategies for growth
❖ Small business can be divided into three broad categories for strategic analysis.
❖ Those likely to cease trading in the near future
❖ These likely to survive, but which will stay very small
❖ Those which will not only survive but will also grow rapidly.
❖ As we have seen, the vast majority of small business falls into the first two
categories. Only a tiny minority turn into the high growth enterprises which
move quickly towards medium size status and beyond.
❖ However their significance to the economy is much greater than their numbers
imply. High growth firms are those that provide most employment prospects over
30 per cent of the new jobs created by small business are provided by the fasts
growing 4 per cent of firms. This section looks at some of the influences on their
grown.
❖ The entrepreneur, the firm and strategy
❖ In a review of the evidence on small business growth, Storey developed a
framework of the characteristics of high growth small firm improving 3
components.
❖ The starting resources of the entrepreneur

Successful Small Business Strategies

In this section various influences on the like hood of, first the survival of a new venture
and secondly, its growth into larger enterprises has been discussed. These have been
divided into external and individual influences and into factors that particularly affect
high growth firms. As growth is one of the key factors in survival, many of the
influences on survival are similar to those that are important for high growth firms. A
composite model of these influences is summarized in critical factors in small business
strategies. Summarized the external factors listed above analyzed the building block of
successful entrepreneurship which make up the individual factors.

Together these factors influence the like hood of success or failure. The overlapping
circle indicate the inter dependence of these force. For example the sector in which the
firm is set up just as the decision on which sector to start a new venture in is influenced
by personal factors and previous experience. Few entrepreneurs develop a business in
which all these factors are favourable disposed. If a complete set of favourable influence
is not attainable, which are the most significant ones to get right? Research into
successful small firm provides some guidance evidence from several studies suggests
that the success of a small firm depend more upon the policies it adopted than the
buoyancy of the market in which it operates. External influences are less important; than
individual factors, particularly the management competencies and the personal attributes
to cope with the small business environment. Some individual’s successes an
entrepreneur when the odds seems stacked against them, whilst other fail when the
conditions for success are relatively good.

CONCLUSION

The inception and development of information technology in last decade of 20th century
has changed the world scenario to great extent. It is so dominating on individual and
social life of the people that the marriages are being arranged through internet. The
approaches towards Human Resource Development are also changing consequent upon
the development of information technology. The scientific innovations are taking place
with the faster speed. The common perception might be that the typical small business is
more often than not at the emergent end of the spectrum, whilst larger organizations are
more deliberate in their strategies process. There is little hard evidence to support this
view. Some commentators view entrepreneurial strategy as more toward the intended
than the emergent end of the spectrum. The focused control of small enterprise certainly
makes the process of formulating strategy easier than in large organization. The sheer
size and complexity of some enterprises means that changing existing pattern to a
deliberate new strategy is a difficult task. In a small business, the owner manger can
embark on a new strategy with minimal consultation and communication

Rural Development Schemes and their Contribution towards the

Human Resource Development

Introduction

The overriding objective of a country’s policy and planning is to raise the standard of
living and enhance the productive capabilities of its people. With over a billion people,
this challenge is particularly daunting for a developing country like India. Because, a
nations development is depends on its Human Resources. If a country’s population is
healthy in all aspects definitely that country would become a developed country that is
why all the countries giving prime importance for their human resources development.
In the world arena, India is the second biggest country in population size and at the same
time it has more young population than the other countries. It means that availability of
younger workforce is more than (52 per cent) than the other countries. It is being as a
positive signal to the nation’s development. India is also facing the problems of poverty,
illiteracy, sanitation, unemployment and the like. Hence, the development of human
resource is prime duty of any country. For the development of Human Resource
Government of India has been implemented many rural development programmes
accompanied with Ministry of Rural Development. Such programmes are Mahatma
Gandhi National Rural Employment Guaranteed Programme, Indira Awas Yozana,
Swarna Jaynthi Swarozhar Yozana, Rural Education, Sanitation and the like. After the
implementation of these programmes there are positive outcomes in the nation’s human
resource as well as economic development.

Importance of Human Resource Development

Human Resource is the most important and vital factor for the Economic Development
or it can be said that humans are the agents of development. The following are the some
of the importance of Human Resource or Human Capital. Country develops if the
Human Resource is developed To enhance economic development, the state constructs
roads, buildings bridges, dams, power houses, hospitals, etc. and to run these units
doctors, engineers, scientist, teachers, are required. So if the state invests in a human
resource it pays dividend in response.

Increase in Productivity the better education, improved skills, and provision of healthy
atmosphere will result in proper and most efficient use of resources (non-natural &
natural) which will result in increase in economic production.

Eradication of Social and Economic Backwardness

Human Resource development has an ample effect on the backwardness of the economy
and society. The provision of education will increase literacy which will produce skilled
Human Resource. Similarly provision of health facilities will result in healthy Human
Resource which will contribute to the national economic development.
Entrepreneurship Increase

Education, clean environment, good health, investment on the human resource, will all
have its positive effects. Job opportunities would be created in the country. And even
business environment will flourish in the state which creates many job opportunities.

Social Revolution

Because of Human Resource development, the socio economic life of the people, their
thinking phenomena and progressive thoughts are endorsed into the minds of the people.
Due to the development of population there are positive outcomes in a country, there are
problems in the developing countries. The Problems like unemployment, Illiteracy,
poverty disturbs the growth of the country. Wherein the case of India to avoid such kind
of problems, Indian government has been implementing various schemes accompanied
with ministry of rural development. Among which there are schemes contribute more to
the human capital empowerment. Such schemes as follows:

An Over View of Various Rural Development Schemes

The Swarnjayanti Gram Swarozgar Yojana (SGSY) is the major on-going programme
for self-employment of the rural poor. The basic objective of the SGSY is to bring the
assisted poor families (Swarozgaris) above the Poverty Line by providing them
income-generating assets through a mix of Bank Credit and Governmental Subsidy. The
programme aims at estab- lishing a large number of micro enterprises in rural areas
based on the ability of the poor and potential of each area. The SGSY also seeks to
promote multiple credits rather than a one-time credit injection. The credit requirements
of the Swarozgaris need to be carefully assessed and the Swarozgaris are allowed, in fact
encouraged, to increase credit intake, over the years. Subsidy under the SGSY to
individuals is uniform at 30% of the Project Cost subject to a maximum of Rs. 7500/-. In
respect of SCs/STs, the subsidy is 50% of the Project Cost, subject to a maximum of Rs.
10,000/-. For groups of Swarozgaris, the subsidy is 50% of the cost of the scheme,
subject to a ceiling of Rs. 1.25 lakh. Since inception, 36.78 lakh SHGs have been formed
out of which 24.09 lakh SHGs have passed Grade I and 11.24 lakhs have passed Grade
II, while 8.36 lakh have taken up economic activities. During 2009-10, till December
2009, 11.65 lakh swarozgaries have been assisted out of which 7.85 lakhs are women
(67.36%).
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

The MNREGA Launched on 2nd February, 2006 as a momentous initiative towards

pro-poor growth. For the first time, rural communities have been given not just a
development programme but also a regime of rights. The National Rural Employment
Guarantee Act, 2005 (NREGA) guarantees 100 days of employment in a financial year
to any rural household whose adult members are willing to do unskilled manual work.
This work guarantee also serve other objectives: generating productive assets and skills
thereby boosting the rural economy, protecting the environment, empowering rural
women, reducing rural urban migration and fostering social equity, among others.

The Act offers an opportunity to strengthen our democratic processes by entrusting

principle role to Panchayats at all levels in its implementation and promises transparency
through involvement of community at planning and monitoring stages. The Act is also a
significant vehicle for strengthening decentralization and deepening processes of
democracy by giving a pivotal role to local governance bodies, that is, the Panchayati
Raj Institutions. In 2009-2010, upto December 2009, an amount of Rs. 18950 crore has
been utilized out of Rs. 39,100 crore, during the same period 160 crore persondays
employment has been generated across the country. At the national level, average wage
paid under MGNREGA has increased from Rs.65 (FY 2006-07) to Rs. 88.48 in FY
2009-10. In FY 2009-10, 36.51 lakhs works were undertaken, of which 51 percent
constituted water conservation, 16 percent rural connectivity, 14 percent land
development and provision of irrigation facility to individual beneficiaries constituted
around 17 percent.

Indira Awaas Yojana (IAY)

Shelter is one of the basic human requirements for survival and dignity. One of the
pressing tasks facing the government is to find out ways and means to cope up with the
problems of housing shortage in the country. To meet the shortage of housing in rural
areas, the Government of India had launched a comprehensive scheme Indira Awaas
Yojana (IAY), the flagship programme for Rural Housing since 1985-86 to help build or
upgrade homes of households below the poverty line. During 2009-10, against the
physical target of 40.52 lakh houses 21.18 lakh houses have been constructed till
January 2010, and 27.53 lakh houses are under construction.
Rural Sanitation Programme (RSP)

In realization of the importance of sanitation for improving the quality of life and its
impact on productivity Ministry of Rural Development has been making concerted
efforts to ensure total sanitation coverage. The ministry has also set for itself the target
of 2012 for achieving total sanitation coverage which is more ambitious than that of the
UN sponsored date which is 2015. In 1999, ‘Total Sanitation Campaign’ (TSC) under
restructured CRSP was launched to promote sanitation in rural areas. Due to the success
of the Total Sanitation campaign, the percentage has gone up to 62.94% of the number
of households in 2001 and 56.57% of the projected population in 2008 as per the latest
available figures.

Contribution of Schemes towards Human Resources Development

Employment Opportunities the MNREGA has provided employment opportunities to the

rural mass in a considerable manner. It leads to the promotion of standard of living,
increase the purchasing power, generating productive assets and skills thereby boosting
the rural economy, protecting the environment, empowering rural women, reducing rural
urban migration and fostering social equity, among others.

Self –Employment

The SGSY Scheme covers all aspect of self- employment like capacity building, subsidy,
and infrastructure facility, and credit, skill up gradation, insurance and marketing. It also
leads to the emerging entrepreneurial activities by way of doing small businesses in
accordance with the availability local resources. Such self-employment programmes
leads to the eradication of poverty and enrichment of the economic status of the public.

Housing Facilities to the Rural Mass

Indira Awaas Yojana is primarily to help construction of dwelling units by members of

Scheduled Castes/ Schedule Tribes, freed bonded labours. Through which the people can
have healthy residential environment and thereby gain social status. Sanitation Facilities
Sanitation is an important one for the human development and this is also a necessary
one for the healthy environment. When the environment is clean the people who are all
living there will be health and safety. If the people are healthy they will contribute more
to their surroundings by their efforts.
Conclusion

Efforts from different parts of society are needed to understand the changes that take
place in human resource development. In accordance with these efforts can influence the
successful implementation of more sustainable development schemes. Though, there are
developments and improvements in the society even now there is no development at all
in the public welfare. Therefore, the Government, by adopting good governance at every
level of the schemes implementation, should be a key player in building of effective
strategies to develop a nation by developing human. Because, Human are the core of a
nation’s development, but their lives and the envier.