Union Budget 2019: ASPIRE’ng 75K Rural Entrepreneurs And Bharat-Net To Boost Rural Entrepreneurship

Besides the INR 70K Cr announced as recapitalisation for the banking sector, there was hardly any new fund allocation in the Union Budget 2019 announced on July 5. However, yesterday’s Budget must not be seen from an independent allocation perspective, rather, an extension of the Interim Budget 2019 where then interim finance minister Piyush Goyal already made all the big announcements.

Addressing farmers’ issues, Goyal had announced the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) programme under which vulnerable landholding farmer families, having cultivable land upto 2 hectares, will be provided direct income support at the rate of INR 6K per year. An outlay of INR 75K Cr for PM-KISAN for the FY 2019-20 was already allocated under the Interim Budget. Similarly, Goyal had announced the extension of Kisan Credit Card scheme (KCC) to animal husbandry and fisheries farmers.

On July 5, Nirmala Sitharaman did not have too many funds for allocation, but rather this budget was more about the implementation. Clearly, the 127-minute-long budget speech was rich in terms of words and past achievements, thin on forward-looking announcements and funding allocation.

This is also true for the agriculture sector, which provides 44% of the total employment in the country. The Modi government for the past few years has been working on making farmers, more self-sufficient, where they could explore more out of farming such as the farm-to-fork movement in order to generate more profits.

The Union Budget 2019 is important in this regard and helps understand the government’s perspective towards Indian villages, rural India. As Sitharaman in her speech said,

At the centre of everything that we do, we keep “gaon, garib, aur kisaan”. (village, poor and farmers)

Digitising Rural India

Around the theme of ‘Rural Entrepreneurship’, the government has taken multiple steps to boost the rural infrastructure and ecosystem in India. While the Modi government, in 2018, had announced the eNAM (National Agricultural Marketplace) project which enabled an online trading platform for agricultural commodities, in the Interim Budget 2019, Goyal announced plans of creating 1 lakh Digital Villages in India.

In the Union Budget 2019, Sitharaman didn’t even mention Digital Villages mission, but said under the Pradhan Mantri Gramin Digital Saksharta Abhiyan over 2 Cr rural Indians have so far been made digitally literate. To bridge rural-urban digital divide, Bharat-Net is targetting internet connectivity in local bodies in every village in the country. This will be expedited with assistance from Universal Service Obligation Fund and under a public-private partnership.

Commenting on the budget, Kalyan Krishnamurthy, CEO, Flipkart Group said, “The government’s vision on bridging the rural-urban divide with internet penetration will be pivotal in transforming India into a $5 trillion economy.”

Pradeep Dadha, founder & CEO Netmeds.com said the Budget’s focus on Bharat Net providing internet to every village in the country will help take healthcare initiatives to every nook and corner, providing much-needed quality medicines and affordable healthcare services such as online medicine delivery, remote doctor consultation to rural India.

Seconding Dadha, Vivek Gupta, cofounder, Licious said that India is the world’s second largest fish and seafood exporter. The country’s 7K+ Kms long coastline and diverse produce, contributes significantly to the forex reserves. The government’s initiative for developing fisheries management network is truly a long-term vision. This coupled with the schemes supporting agro-rural entrepreneurship will help upgrade the ecosystem, Gupta maintained. Indian consumers should get better quality fish and meat products, he added, which is a strong imperative for agribusinesses.

The budget addresses the aspects of rural entrepreneurship. On the question of whether these steps would be enough to create an ecosystem for entrepreneurship, there’s more time needed before it can be answered with any confidence.

Towards Rural Entrepreneurship 

A majority of mills and factories pertaining to agro products are established in rural part of India. To help them renovate and expand their business, SItharaman announced the ‘Scheme of Fund for Upgradation and Regeneration of Traditional Industries’ (SFURTI) which aims to set up more Common Facility Centres (CFCs) to facilitate cluster-based development to make the traditional industries more productive, profitable and capable for generating sustained employment opportunities.

While the government in 2018 had launched National Bamboo Mission, under SFURTI, the focus will be on bamboo, honey and khadi clusters. According to Budget 2019, the SFURTI envisions setting up 100 new clusters during 2019-20 which should enable 50,000 artisans to join the economic value chain.

Further, to improve the technology of such industries, the Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship’ (ASPIRE) has been consolidated for setting up of Livelihood Business Incubators (LBIs) and Technology Business Incubators (TBIs). The Scheme contemplates to set up 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs) in 2019-20 to develop 75K skilled entrepreneurs in agro-rural industry sectors said Sitharaman.

While Abhishek Ray, head, legal and compliance, ePayLater saw the budget as overall well-balanced, Anuj Golecha cofounder, Venture Catalysts sees the extension of LBIs and TBIs for the agro-rural industry as a potential for startup boom in rural India.

Golecha added that the Indian startup community will soon be witnessing another wave of startups from rural geographies as the government will be launching a dedicated startup TV channel along with the LBIs and TBIs for rural artisans.

However, the bigger question is are these announcements too little considering the grand Startup Vision 2024? Are these steps enough to create a startup economy at the village level?

The Modi government has repeatedly iterated that it wants to build a startup ecosystem in every district and every village in order to enable 50K new startups by 2024. But these rural entrepreneurship measures seem rather basic and don’t delve deep into issues such as funding or tech adoption among rural entrepreneurs.