A step forward: rural transformation through enterprise promotion

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The project promotes rural enterprises in the agricultural, off-farm and off-farm sectors

The project promotes rural enterprises in the agricultural, off-farm and off-farm sectors

The government of Tamil Nadu has undertaken a rural transformation project in partnership with the World Bank to promote rural enterprises in the agricultural, off-farm and off-farm sectors. While the World Bank provides 70% of the financing, the rest is borne by the State.

The Tamil Nadu Rural Transformation Project (TNRTP) now has an official brand name, Vazhndhu Kattuvom (We’ll Live and Show), and looks beyond poverty alleviation to develop a business ecosystem that nurtures skills and fosters entrepreneurial capacities among Self-Help Groups (SHGs) and their households.

The project is operational in 3,994 village panchayats in 120 blocks in 31 districts. “The project is a paradigm shift from focusing on poverty alleviation to enlisting entrepreneurs, and those who want to go beyond livelihoods to visualize entrepreneurship, create more opportunities employment opportunities in rural areas and also support migrants who have returned to their villages during the COVID-19 period,” a senior government official said.

Achieving Chief Minister MK Stalin’s vision of making Tamil Nadu a trillion dollar economy by 2030 would require expanding business clusters as well as a business-driven ecosystem at different levels. The project aims to make women a key partner in the trajectory of development and growth, the official added. It focuses on promoting businesses in various subsets at individual and collective levels.

A subset is the enterprise group (EG) – a group with joint ownership and control of business activities, with shared profit and loss and with the aim of reducing production costs, improving quality and increase income. Each EG will have 10 to 30 members at the village level and will be registered under the Micro-Small and Medium Enterprise (MSME)/Partnership Company/Limited Liability Company Registry.

In the producer group (PG) model, producers of a particular commodity in a village come together for aggregation, improved productivity, and collective actions to increase income. About 30 to 150 members are mobilized to form a PG. Each PG receives a start-up grant of up to ₹75,000, depending on their business plan.

Another model of entrepreneurship is the Producer Collective (CP). Under it, a large number of producers come together for aggregation, value addition, marketing and provision of services for economies of scale, and membership is usually between 300 and 3,000 producers. .

For some commodities and in sparsely populated tribal areas, the size of a CP can be in the range of 150-300 growers with an entitlement for a start-up grant of up to ₹30 lakh to address challenges related to the launching business activities and meeting operational expenses. Another component is the matching grant program to bridge the gap between supply and demand in access to financial credit for rural enterprises such as production companies, new entrepreneurs and businesses run by women. women, who are perceived as a high-risk category. In this framework, 70% or more of the approved loan would be disbursed by partner financial institutions, while the remaining 30% would be disbursed through bank grants.

There is also Mahalir Vazhvaadhara Sevai Maiyam, a unique block-level small business facilitation and incubation center. It provides business development support services to individual and collective enterprises, in addition to channeling the Matching Grants Program (MGP).

Under this scheme, Community Skills Schools provide training through locally available master craftspersons/expert practitioners on traditional arts and crafts and high paying trades to build skills. This can help find livelihoods.

In addition, community agricultural schools aim to transfer learning and knowledge from the laboratory to the land and vice versa. It aims to develop a cadre of technical service providers, called Skilful Personal Ability Attitude Resourceful and Knowable (SPARKs), in agriculture and related subsectors to build skills within the community.

Similarly, the Migrant Support Center (MSC), a collaborative effort between TNRTP and Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDUGKY), aims to provide services to migrants within the state. The MSC service works with industries to utilize skilled labor to contribute to the state’s GDP, in addition to helping migrants access better services, providing health information, education, financial literacy and social security skills.

Until February, the project covered 3,77,367 beneficiaries, 53% of whom were women. The business project is a step up from a previous initiative that focused more on empowering women and reducing poverty in rural areas through the community development approach.

The previous Vazhndhu Kattuvom Project was implemented from 2005 to 2017 in 4,174 village panchayats covering 120 backward blocks in 26 districts at a cost of ₹1,871.85 crore, benefiting 9.8 lakh rural families.

One of the main successes of the previous project was the empowerment of women through the creation of strong community institutions such as village poverty alleviation committees and federations at panchayat level and the guarantee of jobs for women. rural women. Some of the women were employed by Intimate Fashions, which has a factory near Chennai and manufactures clothes for internationally renowned lingerie brand Victoria’s Secret.

The official said that the current enterprise project builds on the main lessons of the previous project, such as participatory identification of the target group, decentralization of training at the house level to mobilize members, ensure participation of women in decision-making and the strengthening of women’s participation. in gram sabha meetings.

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