In a bid to boost the rural economy, the government has launched the Startup Village Entrepreneurship Programme to foster 1.82 lakh entrepreneurs over a period of four years, in 40 blocks across 14 states. This programme is worth an estimated $72 Mn (INR 484 Cr.).
The programme will be a sub scheme under the National Rural Livelihood Mission and was announced in the 2014 Budget.
In response to questions during a recent Rajya Sabha session, Rural Development Minister Birender Singh said, “SVEP supports the rural startup entrepreneurs by training them to choose the right enterprise to start and run it.” He also added that, loans will be made available through Self Help Groups for starting the enterprise and subsequently linking them to banks for additional funds. The groups will support them for the initial six months of their businesses to ensure sustainability.
As part of this programme, the states undertake the initial baseline and market potential study of their respective blocks with help from the approved Programme Implementing Agency for fostering startups and taking care of the financial aspects for the entrepreneurs.
Welcoming this move, Prajakt Raut, co-founder of Applyifi and founder of The Hub for Startups, said, “Glad to see the Government of India take steps to educate, enable and assist aspiring entrepreneurs in rural India. It is important that the government goes beyond ‘VC fundable ventures’ and includes businesses that can be built the traditional way of building a strong business.”
“I hope that the programme goes beyond ‘massively scalable ventures’, which is one key criteria that VCs look for, which have become the definition of the word ‘startup’, and is able to encourage and enable sustainable businesses that can be modest in size and scale,” he added.
He hopes that the programme also explains that entrepreneurship is about starting a ‘business’ that will create value and generate employment. They need to understand that ‘wealth through valuation’ is a by-product of building a strong business, not the goal. “I am worried when I read headlines like ‘Young people have dreams to create billion dollar valuation companies’, and then they go searching for a concept that can get them there. I hope the Government’s programmes are designed to build strong businesses, and not a platform for starry-eyed aspirants to try to create billion dollar dreams.”
14 of the 17 states that showed interest in this programme were granted approval and the scheme was rolled out in each of their 40 blocks, last month. The Minister also said that the states were also asked about the kind of entrepreneurship they require.
Under this scheme, the entrepreneurs will also be helped to enhance the sustainability quotient of their ventures by later linking them to the Centre’s Pradhan Mantri MUDRA (Micro Units Development and Refinance Agency) Yojana. The scheme will ensure funding to these entrepreneurs and save them from being exploited from shady money lenders.