Redefining Rural Landscapes Startups Paving the Way for Inclusive Development
India is the 3rd largest startup ecosystem in the world, with more than 1 lakh registered
startups (DPIIT – Startup India).
Schemes:
1. 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.
2. Start-up Village Entrepreneurship Programme – Ministry of Rural Development is
implementing Startup Village Entrepreneurship Programme (SVEP) as a sub-scheme
under the DAY-NRLM
3. Skill India Mission – Under this mission, 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.
4. ASPIRE – The scheme implemented by Ministry of MSME aims to provide training
and incubation support to prospective entrepreneurs in agro-rural sector through
Livelihood Business Incubators (LBIs).
Starts ups in Rural India
More than 100 crore Indians, or around 65% of India, live in rural areas. A total of 63% of
workers in rural areas are self-employed, 1.6 times that of urban areas, mostly in agriculture
and allied sectors.
The challenge for startups is to understand the intrinsic values of rural India and make
products and solutions that build trust among the people, cater to their needs and
aspirations, while simultaneously creating employment opportunities for them.
Role of Digitisation
Internet penetration and data accessibility have a huge role to play in developing startup
ecosystems. India has one of the cheapest data rates in the world (USD 0.17 for 1 GB). Over
50% of Indians are internet users, out of which around 40 crore people reside in rural areas.
By 2025, India will have 90 crore active internet users, and 56% of the new internet users
will be from rural areas. Every farmer added to the digital ecosystem presents an
opportunity for the application of new agri-based solutions.
The digitisation of rural areas has been bolstered with government schemes like BharatNet,
Common Service Centers (CSCs), Digital India Campaign, Pradhan Mantri Gramin Digital
Saksharta Abhiyan (PMGdisha), and Digital Finance for Rural India, along with a vibrant
private telecom sector
Types of Rural Startups
1. Founders based in urban areas with solutions catering to rural areas
2. Founders belonging to rural areas with solutions catering to rural areas
3. Self-Help Groups
4. Micro, Small, and Medium Enterprises (MSMEs): In India, over 6.3 crore MSMEs are
estimated, out of which more than 50% are in rural areas
Challenges for Rural Startups
1. Connectivity with Suppliers in Urban Areas
2. Access to Financing
3. Lack of Support System and Ecosystem in Rural India for Startups
4. Difficulty in Finding Early Adopters in Rural Areas
5. Limited Funding Mechanism in Rural Areas
Important Startup Sectors in Rural Areas
S.No Startup Sector Importance for Rural Areas
.
1 Agritech Agritech startups leverage technology for
precision farming, optimising resource use and
increasing yields.
Prominent examples include Fasal and BigHaat,
which use artificial intelligence and data analytics
for providing valuable information to the
farmers.
SaaS based agritech startups like Ninjacart,
DeHaat, and Cropin connect farmers directly
with buyers/retailers/storage facilities, reducing
dependence on intermediaries and ensuring fair
prices.
Other agritech startups like Khetigaadi provide
platforms where one can buy, sell, rent,
compare, and review conventional farm
machinery.
2 Food Food Processing startups like Intello Labs add value to
Processing raw agricultural produce, creating marketable products,
and reducing post-harvest losses.
• Processing enhances the quality and shelf life of
products, especially for crops like millets, thus
expanding their market reach.
• Startups like Millet Magic, Slurrp Farm, and Millet
Amma are actively working in this sector, encouraging
farmers to shift from traditional cereals to millets
3 E-commerce • E-commerce platforms provide rural businesses access
to a larger customer base, boosting sales and income.
• Startups like Meesho have partnered with M/o Rural
Development to sell products of SHGs under NRLM on
its platform.
4 Edtech &Skill EdTech startups like Learning Delight, Hippocampus
Development Learning Centres, Sudiksha Knowledge Solutions,
Paathshala Learning Solutions, and Classle bring
education in local languages to remote areas through
digital platforms, addressing the rural-urban education
divide.
5 Health-tech • Health-tech startups like Medyseva, Gramin Health
Care, Blackfrog Technologies, AI Health Highway, Hesa,
and DigiQure offer remote consultations, overcoming
the lack of healthcare infrastructure in rural areas.
• These startups provide health education and
awareness programmes, addressing preventive
healthcare.
6 Renewable • Startups like AgriVijay provide renewable energy
Energy products for farmers and rural households offering range
of products, including solar, biogas, electric, hydro, and
wind energy.
• Startups like Agringenium Innovations Pvt. Ltd. are
harnessing agricultural waste for clean energy
production, reducing dependence on traditional energy
sources.
7 Handicrafts and Startups in this sector contribute to preserving and
Traditional Arts promoting traditional crafts and arts. These startups also
attract tourists, fostering cultural exchange, and
economic growth.
• Startups like Peetal, Shilpkaari and ThinkGudd provide
training torural artisans, expanding their customer base
and increasing income
8 FinTech • FinTech startups facilitate digital banking and financial
services, ensuring banking access for rural populations.
• Examples include startups like Aye Finance, BankSathi,
BharatPe, KhataBook, and Propelld, which are
revolutionising access to financial services through
online banking, offering a range of services such as
investment platforms, Aadhaar Enabled Payment System
(AEPS), digital ledger apps, and digital payment
solutions.
Redefining Food Processing Sector through
Startups
The food processing sector of an economy is the quintessential example of mutually
reinforcing primary and secondary sectors in terms of demand supply dynamics and forward
and backward linkage effects. This sector is extremely vital for an agrarian country like India.
It not only acts as an effective link between agriculture and industries but also helps in
reducing wastages of perishable agricultural produce, ensuring value addition, and
diversifying and commercialising agriculture, thereby generating incremental employment
and income for farmers.
Importance of Food Processing Sector
Unquestionably, the food processing sector is one of the most important sectors of the Indian
economy, both in terms of its contribution to economic output and also in terms of overall
economic growth.
From 2012–13 to 2020–21, the Gross Value added by the food processing industries at 2011–12
constant prices grew from Rs. 1.30 lakh crore to Rs. 2.37 lakh crore, as depicted in the Annual
Report 2022–23 of the Ministry of Food Processing Industries.
This sector is one of the fastest growing sectors in the country, having grown at 10.3% during 2015–
16 to 2020–21, vis-à-vis the growth rate of 5.1% in the overall manufacturing sector.
This sector is also one of the sectors where consumer dynamism is highly palpable and easy to
comprehend.
Startups: Sunrise and Inclusive Growth
The Union Budget 2023–24 stated that India has the third-largest ecosystem for startups, globally.
In the inaugural event of ‘World Food India 2023’ held in New Delhi on 3 November 2023, the
Hon’ble Prime Minister of India referred to the food processing sector as a ‘sunrise’ sector and
underscored the tremendous inherent entrepreneurial potential of startups in the food sector.
A study by NABARD Consultancy Service Pvt. Ltd. estimated in 2022 the percentage of harvest and
post-harvest loss of perishable food (Table-1).
Table1: Estimated Loss of Perishable Commodities
Perishable Commodities Estimated Loss (in %)
Fruits 6.02-15.05
Vegetables 4.87-11.61
Milk 0.87
Fisheries (Marine) 8.76
Fisheries (Inland) 4.86
Tackling such losses, though challenging, is extremely important, considering the broader objective
of food security for all.
In this context, food processing startups need to be facilitated through specialised interventions that
can ensure the presence of new research and development, technology, innovative processes, and
products, and thereby enlarging the scope of an improved supply chain, value chain, and demand
system in the food sector of the country.
The role of women in food processing industrial startups has always been important. Out of more
than 3.13 crore registered micro, small, and medium enterprises in the country, as many as 19- lakh
are in the food processing sector, of which 33% are owned by women entrepreneurs.
There is a concentration in the southern States of Andhra Pradesh (14%), Tamil Nadu (12%) and
Telangana (10%), which together constitute 36% of all registered food processing factories in the
country.
Besides, there are food processing products approved under One District One Product which range
from coconut-based products of the districts of Andaman & Nicobar Islands and spices of Andhra
Pradesh to walnuts of Arunachal Pradesh and bakery products of Chandigarh.
Table 2: No. of Startups recognised by DPIIT in the Food &
Beverages Sector
2017 2018 2019 2020 2021
170 357 533 643 1010
