Home Social group Startups can break the chains of poverty

Startups can break the chains of poverty


It is indeed a matter of pride that India has become the third largest startup ecosystem in the world after the United States and China with over 65,861 startups recognized as of March 14, 2022. There are over 100 unicorns in the country, 42 of which were created only last year. According to the Global Entrepreneurship Monitor (GEM) India Report 2021-22, India’s entrepreneurial activity in 2021, with its total entrepreneurial activity rate, the percentage of adults aged 18-64 who starting or running a new business, increased to 14.4%, from 5.3% in 2020.

According to the Union Ministry of Trade and Industry, nearly 50% of recognized startups originate from Tier I and Tier II cities. Recognized startups are spread across more than 640 districts and have reported the creation of over seven million jobs. About 700 start-ups from agriculture and related sectors have also been selected under the “Innovation and Agro-Entrepreneurship Development Program”. This is a completely bullish situation.

Agriculture is very important to our country. It is the mainstay of our rural terrain.

About 60% of our population, mostly in rural areas, depends on agriculture for their livelihood. It contributes about 20% to the gross domestic product (GDP) of the country. By making the most of technology, agriculture has been totally transformed in countries like China, Israel and the United States. Hybrid seeds, precision farming, big data analytics, artificial intelligence, geolocation and satellite monitoring, mobile apps and farm management software have made significant inroads into agriculture in most advanced countries. India is also gearing up to drive agriculture digitally to increase agricultural productivity and income. Given the small land holdings of nearly 90% of farmers, they need every possible incentive to have surplus income that they can invest in the health and education of their children.

There are three critical segments – rural areas, agriculture, and self-help groups (SHGs) – where startups can aggressively engage. They are linked to each other in more ways than one. Part of the rural population is socially, educationally and economically disadvantaged. An overwhelming percentage of agricultural workers come from the weakest sections of society, consisting of SCs, STs, OBCs and members of minority communities. Startups can play an important role in their financial empowerment. Due to multifaceted constraints, most of them fail to break out of the vicious cycle of poverty. Generation after generation, they continue to struggle to achieve their ends. This is a painful situation and also a serious stumbling block in our collective efforts to achieve the goal of inclusive and sustainable development. The problem of disparities stems from people’s inability to make the most of national resources and opportunities, and these inabilities cause perpetual socio-economic deficiencies and insufficiencies, making life difficult for the poor.

Startups can break the chains of poverty by monetizing the time and talent of rural people in multiple ways. The challenge is how to engage them in income-generating activities. They have plenty of time to use after completing their daily routine tasks. Billions of hours of small farmers and agricultural workers are lost every day in our country for lack of any other commitment to them. They will get a critical financial boost even if 25% of those hours are fully utilized. Each village or group of villages offers a plethora of opportunities for startups if they accept or are encouraged and incentivized to work in rural areas.

Rural development is directly linked to the country’s agro-economy, but it must be understood that well-to-do village farmers are an entirely different social group. Each of them dominates the rural ethos and value system. There is no comparison between them and smallholders and agricultural workers. The socio-economic gap between them is permanent and must be bridged as soon as possible.

Similarly, Self-Help Groups (SHGs) should be encouraged and guided to expand their operations and market reach to obtain better prices for their products. This is another area, which offers unlimited opportunities for start-ups. To date, more than 75 lakh SHGs have been trained across the country under the Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM), a flagship program of the Ministry of Rural Development.

Since an overwhelming percentage of them come from the weakest sections of society, their financial empowerment means a lot. More income means slightly better education and food for their children, which will be a big boost to their overall improvement. Thus, getting started with them will be a win-win situation for startups and SHGs. In 250 backward districts, all SHG women are eligible for bank loans of up to Rs 3 lakh at an annual interest rate of 7%. An additional interest subsidy of 3% per annum is granted to them, reducing the effective interest rate to 4%. If startups show up to help them, our SHGs will undergo a total makeover in more ways than one.

Fortunately, most Indian states are working hard to promote the startup ecosystem. According to the results of the third edition of the Ranking of States on Supporting Startup Ecosystems, Gujarat and Karnataka were found to be the best performers. For the purposes of the rankings, the states and union territories have been classified into five categories, namely, High Performers, Top Achievers, Leaders, Aspiring Leaders, and Emerging Startup Ecosystems. Participants were assessed in seven broad areas of reform comprising 26 action points ranging from institutional support to promoting innovation and entrepreneurship, market access, support for incubation, funding support, mentorship support and capacity building for facilitators. Meghalaya won the highest honor among UT and North Eastern (NE) states. Maharashtra, which was categorized as “Leaders” in the 2020 ranking, improved its position and was praised as a “Top Performer” state along with Telangana, Kerala and Odisha.

Let’s focus on developing the startup ecosystem in blocks, subdivisions and districts with the help of all startup-related programs from central government and state governments. There is a great opportunity to democratize the startup ecosystem. Government initiatives such as JAM or Jandhan, Aadhaar, Mobile, Digital India, GatiShakti and Ease of Doing Business are driving the startup ecosystem. They should be directed to rural India, the goldmine of opportunities and possibilities. Every stakeholder should come forward to bridge the urban-rural divide. A start must be made the sooner the better. Governments – central or state – will continue to do their part but others cannot and should not turn a blind eye to our villages. People who live in remote villages are simple, upright and meaningful. They adapt to all odds to stay afloat, but that doesn’t mean other stakeholders won’t join in and help them achieve their aspirations in the new India!

(The author is a senior journalist, author and columnist. Opinions expressed are strictly