Challenges of rural industrialization
Some of the challenges of rural industrialization are as follows:
i) Multiplicity of Technology– The dualism in technology is posing a great challenge to rural industrialization. For example, on the first hand we have hands spinning and on the other hand, there is presence of power spinning, handloom and powerloom. This diversity is found in many rural industries such as food processing, construction, leather goods, carpentry, blacksmith, paper making, food preservation and processing. Therefore, reservation of certain areas exclusively for SSIs (Small scale Industries) is required and
some protection mechanism issues such as quality standards, production capacities, price subsidy and so on- may be taken into consideration.
ii) Type and nature of employment– The nature of employment requirement varies from one type of rural industries to that of the other. They include self-employment, wage-employment, wage-cum self-employment etc. Therefore, while establishing rural industries, the pattern of employment has to be taken into consideration. According to a study conducted by Algappan shows that employment pattern in rural industries located in
Keerapalayam panchayat concluded that wage cum self-employment pattern of wage payment proved to be effective.
iii) Managerial and Entrepreneurial skills in Rural Entrepreneurs– There is a general lack of managerial and entrepreneurial skill in the rural ind stries. The entrepreneurial acumen among the decentralized industrial zation unit is lacking because of lack of technical manpower at the grassroots. The village artisans and entrepreneurs need to be enlightened on various skills of management.
iv) Access to credit– Access to institutional credit is always a problem for small entrepreneurs. Most of the rural industries are starved of financial resources. With the globalization there is a shift in credit system towards the urban entrepreneur and real estate market keeping the rural entrepreneurs in credit crunch.
v) Marketing infrastructure– Marketing of the products produced by the rural entrepreneurs is a big problem. As long as rural products donot enter the normal supply chain, their products cannot enjoy a good market. Therefore, rural industrialization would be a total fiasco sans sound rural marketing infrastructure. Chelloppan has urged the government to patronize the products produced by selfhelp mechanism and this would serve as a headache balm to give an eternal relief to rural enterprises.
vi) Defining rural industries– Defining rural industries in the context of globalization is the need of the hour. The definition given for tiny industry in 1979 is not suit for institutional village industries. Although total investments in these industries have risen, yet the percapita investment has not risen. T.S Papola favoured redefinition of small, medium, cottage and tiny industries.
vii) Role clarity– The role of central and the state government must be clear with regards to the small scale and cottage industries. Under the Centrally sponsored scheme, the Central government take up certain industries like coir, sericulture, khadi and handicraft. However, the implementation part is left to the state government. In other words, Central government provided funds, fiscal concession and policy support to these industries, while the state government takes care of implementation. However, it is seen that state governments still consider it as duty of central government to promote it. As a result, there is confusion in role clarity between centre and state government.