Mahatma Gandhi believed “The future of India lies in its villages”.  As per the 2011 Census, there are 6,49,481 villages in India. Around 833 million Indians, which is more than two-thirds of India’s population, reside in rural areas. Rural-urban distribution is 68.8% – 31.1% in India. Rural entrepreneurship will facilitate the growth of rural areas through the maximum utilisation of available local resources (Nwankwo, F.O., & Okeke, C.S., 2017). Rural entrepreneurship eliminates poverty and unemployment, improves rural infrastructure, and fosters rural economic development. In India, to build rural entrepreneurship and achieve the Government of Tamil Nadu, collaborated with the World Bank, and initiated the Tamil Nadu Rural Transformation Project – the Vazhndhu Kattuvom Project (TNRTP-VKP). The primary goal of the project is to enhance financial inclusion and reduce poverty and vulnerability among disadvantaged sections of society. The key components of TNRTP-VKP are rural enterprise ecosystem development, enterprise business plan financing, skills and job opportunities, and project management. The project was implemented in 3,994 village panchayats in 120 blocks among 31 districts in Tamil Nadu. To achieve sustainable entrepreneurship, TNRTP focused on key areas, viz., Producers Group, Enterprises Group, Producer Collectives, Enterprise Community Professionals, One Stop Facility Centre, Business Facilitation Centres, Matching Granting Programme, Nano Enterprise Financing Funds, Business Innovations, Community Skill Schools, Community Farm Schools, Skilling convergence, etc.

Covid Assistance Package and the Rise of Tamil Nadu
Tamil Nadu has emerged as the second largest state in India which accounts for 6% of the nation’s total population and 10.6% are urban population (Census 2011). Tamil Nadu is the second largest contributor to Nation’s GDP. During Covid, it is observed that there was a decline in India’s GDP accounting for 24% during April-May 2020.  Rural people were very badly affected by loss of income and livelihood. To enhance Indian Economy, Tamil Nadu Government introduced Covid-19 Assistance Package to support rural economy in 120 TNRTP blocks covering 31 districts with a tune of Rs.300 Crores assisting 1,39,574 beneficiaries comprised of SHGs/SHG Households in varied categories. Towards Individual Enterprise category, a total of Rs.159.76 crore has been released assisting 49,666 beneficiaries, a sum of Rs.26.47 crore has been given to Producer Group, assisting 1765 existing producer groups benefitting 1,11,789 members. An aggregate of Rs.3.60 crore was dispersed to Enterprise Resource Group assisting 240 enterprises benefiting 4670 members, while a sum of Rs.5.00 crore has been despatched assisting 50 producer collectives benefiting 50,481 members. Around Rs. 49.92 crore has been provided as an aid to individuals and to support livelihoods of 33,617 differently abled and vulnerable sections. Start-up fund of Rs.50.10 crore was dispersed to start new enterprise by skilled youth migrant returnees assisting 5,066 beneficiaries. Thus, to kick start the Economy, CAP Scheme has paved the way and stimulated the culture of Entrepreneurship. Thus, CAP revolutionalized Tamil Nadu to be ranked as the most economically Free State in India by the Economic Freedom Rankings for the States of India.

Growth of Tamil Nadu through Producer Groups
Agriculture is the backbone of our country. By educating people on the value of locally-produced food, administrators, and local, state, and national leaders help create new jobs, strengthen the local economy, and build vibrant rural communities for years to come. India today has a bigger base of fertile land than China’s and an agricultural labour force of the same size, Community Farm Schools (CFS) initiative by Government of Tamil Nadu   provides training and capacity-building support to small farmers on best practices in agriculture, natural resource management, and entrepreneurship as a means of improving the agricultural productivity and livelihoods of farmers in rural areas. CFS develops a cadre of service providers (SPARKs- Skillful, Personal, Ability, Attitude, Resourceful, Knowledgeable) in selected agriculture and allied sub-sectors. Today, the country spends only 0.7% of its agriculture GDP on research and development, less than half the global average. Given how far behind India lags its peers, there is a lot that basic knowledge and education can achieve. If India can become a global agriculture leader, it will not only secure the country’s food demand, it will enable the industry to become a significant global force and a significant contributor of the nation’s economic track over the next fifteen years. As a result of the training given by CFS, farmers have been able to enhance their yield, resulting in an increase and income, a reduction in farming costs, and an increase in decision-making power for women farmers. CFS has helped farmers to earn incremental income and adopt the usage of natural fertilizers which helps India’s agriculture sector to grow US$1.1tn to the country’s economy by 2030.  CFS has helped to shape 5392 trainees in learning about farming. CFS not only trained around 1,32,009 women but also enabled 1,64,128 producers were trained in various agriculture techniques through 5,392 schools. CFS also supports existing producers, 21,774 in terms of training in 706 CFS Centers, while 1,25,738 producers are currently undergoing training in 4,153 CFS. Additionally, 16,616 producers in 533 CFS are yet to undergo training. As a part of CFS training, 25 manuals have been developed, covering various crops such as black gram, groundnut, maize, as well as dairy management, etc. Thus, CFS not only helps INDIA to become the platform for the development of India’s agricultural sector, rather it also helps to establish India as the next generation agricultural nation.

In financial year 2022, Gross Domestic Product from agriculture sector of the southern Indian state of Tamil Nadu amounted to over 1.1 trillion Indian rupees. TNRTP-VKP disbursed 26.47 crore to 1,765 Producer Groups, community-based organizations comprising of 30 to 150 producers benefiting 1,11,789 individuals with a onetime capital grant of Rs.75,000/. TNRTP-VKP also extended financial and technical support to start-up grants to 3,235 producer groups, with a tune of Rs. 24.26 crore. As a means of promoting sustainability in Tamil Nadu, TNRTP-VKP supported 2,505 producer collective groups with 68% female and 40% of backward section of society & 20% focusing on disadvantaged sections of society.  Under TNTRP-VKP, around 1,93,270 women producers were supported which is a development for Indian Economy particularly Tamil Nadu’s Gross State Domestic Product (GSDP) grew at 8.19% for the year 2022-23 as against India’s GDP growth rate of 7.24%. The project has made significant progress towards achieving its objectives, and its efforts have had a positive impact on the lives of rural communities in the state. Hence, TNTRP-VKP CFS-Producer’s Group will help India’s agriculture sector which would be worth US$6tn, and become one of the growth engines of an economy that it helps expand to nearly 12%.

The Power of Enterprise Group in Tamil Nadu
Education is the most powerful weapon which we can use to change the world by Nelson Mandela emphasis the fact that through systematic training we can improve a country. South Asia which includes India can benefit with an economic gain of $97.8 billion which will result in an 821% increase in the GDP if basic educational skills are provided properly. TNTRP-VKP established 1619 Community skill schools (CSS) in local communities that offered vocational training and capacity building support to 22,711 individual (70% women) and group enterprises which enabled them to start their own business. CSS provided training on a variety of skills, which includes tailoring, welding, Masonry plumbing, electrical work, and other nonfarm skills. CSS is committed in promoting gender and social inclusion by ensuring the participation of women, marginalized groups, and people with differently abled in the training programs which will contribute to in the fiscal development of a country. In CSS training, 37.5% of trainees were from most background followed by 26% from disadvantage section. Through CSS, 68% of the schools have completed the training, 30% of the schools are currently implementing the training. 

Tamil Nadu’s Gross State Domestic Product (GSGP) grew at 8.19% for the year 2022-2023 as against India’s GDP growth rate of 7.24% during the same period. This is due to the multiplier effect of the support provided by TNRTP-VKP-CSS to start-ups by releasing the fund of Rs. 75,000 to 760 Enterprise Group worth 5.70 crores with a onetime start-up capital grant of 1,50,000 under CAP benefitting 4,670 individuals across 240 Enterprise Groups. The per capita income of Tamil Nadu in 2021-2022 was 1.55 lakh per annum and it increased to 1.67 lakh per annum. This was 1.67 and 1.69 times when compared to per capita income of India at 92,583 in 2021-2022 and was 98,374 in 2022-2023 at constant prices. Tamil Nadu is able to scale up to great heights in terms of per capita income due to the TNTRP-VKP initiative in supporting 152 Enterprise groups thereby reaching the cumulative achievement of 1000 EGs project has made progress by supporting 2,120 members covering 93% women beneficiaries.

Tamil Nadu has a mixture of different sectors like manufacturing, automobiles & auto components, engineering, pharmaceuticals, garments, textile products, leather products, chemicals, plastics, etc. TN ranks first among the states in terms of the number of factories and industrial workers.  In TNTRP-VKP support towards Enterprise Group, Tailoring has the highest number of EGs with 290 groups. Food Processing is the second most popular activity with 150 EGs. Handicrafts and Retail Sales are other popular activities with 117 and 64 EGs. Handloom, Dairy Products, Pottery, Cottage Industries, and Sanitation Products also have a significant number of EGs, ranging from 32 to 54. Non-Farm enterprises comprise the majority, accounting for 94% of the total enterprises, while Off-Farm enterprises account for only 6%. In future, these Enterprise Group will be converted in enterprise Cluster Form. In Nutshell, TNTRP-VKP-CSS enabled Enterprise Groups helps to achieve with the UN’s Sustainable Development Goals which can immensely contribute to economic gain of a country (INDIA).

Matching Grant Program – A boon to Indian Economy
Financial Instrument has a positive effect on a country’s Economic Growth. TNTRP-VKP MGP acts as the backbone for India’s economy. They are essential to creating jobs, encouraging innovation, and boosting the GDP of the nation. But access to funding is essential if these businesses are to prosper and realise their full potential. Matching Grants Programs (MGP) in India has emerged as a powerful tool, enabling the businesses to grow, create jobs, and drive economic development. Matching Grant Program (MGP) is a financial instrument which has partnered with Financial Institutions (PFIs) to finance the enterprises nurtured by Vazhndhu Kattuvom Project. MGP Provides a capital subsidy, 30% grant & 70 % loan to encourage financial inclusion for entrepreneurs in TamilNadu. In MGP, under various categories loans were sanctioned. Around 99.17% of the loan were disbursed to Nano category, 83% covering Micro, and small enterprises. MGP not only stimulated Indian Economy in terms of entrepreneurship but also provided Grants to 1,443 enterprises, to 956 women entrepreneurs (67%) worth Rs. 14.54 crores contributing 49% to service sector, 27.03% to trade, 20.65% to Manufacturing sector, while 2.22%  to Agri-allied Activities and 0.90% to agriculture sector. It is imperative to note that Commercial banks extended credit amounting to Rs. 48.46 crore to enterprises from self-help group (SHG) households.

Around 493 business enterprises were supported by MGP while 950 existing enterprises were handholded by providing loans. To bring equality in entrepreneurship to all sections of society, around 40.68% Grants were disbursed to entrepreneurs who belong to Backward Community while 28% of the grants were disbursed to disadvantage sections of society.

In nutshell, TNRTP-VKP has made significant progress in stimulating rural entrepreneurship and generating livelihood opportunities in rural regions, impacting the lives of more than 4,50,226 individuals. TNRTP-VKP has strived to achieve SDG Goal through financial and technical support in which 58,754 individuals received training. Further, TNRTP-VKP has created Multiplier Effect in Indian Economy by collaborating with  Tamil Nadu Agricultural University (TNAU), Coimbatore, Tamil Nadu Veterinary and Animal Science University (TANUVAS), Chennai, Madras School of Social Work (MSSW) and Entrepreneurship Development Institute of India – Tiruchirappalli Agribusiness Incubation Forum (EDII-TABIF) which would link ‘lab to land and land to lab’, and assist women farmers to increase productivity and reduce input cost in farming livestock and allied sectors which will in turn increase GDP in India. Vazhndhu Kattuvom Project not only encourages entrepreneurship also reduces pressure on agriculture, curb emigration of rural people, disperse large scale industrialization, reduces investment cost and generate employment in mass scale for skilled and unskilled sections of the society which in turn reduces regional disparity. If villages perish, India will perish too. It is evident that VKP strongly demonstrated the success of rural entrepreneurship which is coinciding with Dhirubai Ambani’s statement “The Success of the Young Entrepreneur will be the key to India’s transformation in the New Millennium”.

Article by
Dr. N. Padmavathy
Dean, School of Arts, Humanities and Management
Jeppiaar University, Chennai