Role of Small Business in Rural India

Rural households in developing countries were traditionally seen as being engaged only in agriculture. There is now growing evidence that this is not so — rural households can and do have varied and multiple sources of income, taking part in a wide range of non-agricultural activities such as wage employment and self-employment in commerce, manufacturing and services, alongside the traditional activities of farming and agricultural labour. This shift owes a great deal to the policy initiatives of the Government of India to encourage and promote agro-based rural industries.

The emphasis on village and small scale industries has always been an integral part of India's industrial strategy, especially after the Second Five Year Plan. Cottage and rural industries play an important role in providing employment in rural areas, particularly for traditional artisans and the weaker sections of society, and their development can also prevent the migration of rural people to the cities in search of work. …