Context

• Startup ecosystem of India has witnessed remarkable growth in recent years, with a surge in innovative ventures addressing diverse challenges. India is the 3rd largest startup ecosystem in the world, with more than 1 lakh registered startups.
• Traditionally centered in urban hubs, the startup culture is now permeating the hinterlands, ushering in a new era of innovation and economic transformation.  
• This phenomenon reflects a broader trend of decentralisation and inclusivity, where startups are leveraging technology to bridge the rural-urban divide.  

Measures by Government to support Rural Entrepreneurs

1. Atal Community Innovation Centres:

• Atal Community Innovation Centres (under Atal Innovation Mission) – AIM’s ACIC initiative was launched in 2020, with the objective of creating community innovation centres for rural entrepreneurs. 
• The initiative encourages grassroots innovation and directly supports community-based entrepreneurs by establishing enabling infrastructure in Academic Institutions and NGOs. 

2. Start-up Village Entrepreneurship Programme:

• The Ministry of Rural Development is implementing the Startup Village Entrepreneurship Programme (SVEP) as a sub-scheme under the Deendayal Antyodaya Yojana-National Rural Livelihoods Mission (DAY-NRLM) with the objective of helping the rural poor to set-up enterprises at the village level in non-agricultural sectors. 

3. Skill India Mission:

• Under this mission, the Ministry of Skill Development and Entrepreneurship (MSDE) has been delivering skills through various schemes viz. the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and the National Apprenticeship Promotion Scheme (NAPS), among others, majorly to rural youths across the country. 
• Third party evaluations of these schemes have shown that 70.5% of PMKVY 2.0 beneficiaries (2016-20) received placement in their desired skill sector.  

4. ASPIRE:

• The Scheme For Promotion of Innovation, Rural Industries & Entrepreneurship (ASPIRE) implemented by the Ministry of MSME aims to provide training and incubation support to prospective entrepreneurs in the agro-rural sector through Livelihood Business Incubators (LBIs). 

Challenges for Rural Startups  

1. Connectivity with suppliers in urban areas
2. Access to reliable and affordable financing
3. Lack of support system and ecosystem in rural India
4. Absence/lack of mentorship, networking opportunities, and incubation centres 
5. Difficulty in finding early adopters in rural areas
6. Limited funding mechanism in rural areas

Conclusion

• Migration of startups from rural areas/Tier 2 and Tier 3 cities to innovation hubs is an inevitable phenomenon, and while it cannot be entirely prevented, the key lies in establishing an enabling innovation ecosystem in rural areas. 
• This ecosystem is crucial for sustaining early-stage challenges and overcoming the valleys of death that startups often face. 
• Fostering an environment that supports and nurtures the growth of startups, particularly in rural areas, becomes imperative for realising the USD 10 Trillion milestone by the year 2030.