Government has recognized the need to develop rural entrepreneurship since independence. Various five-year plans have emphasized the need to develop rural entrepreneurship because of umpteen benefits given away by the rural industrialization. Creation of employment, dispersal of income equitably, utilization of resources etc. is possible if our rural industries develops. Inspite of efforts made by government, the growth of rural entrepreneurs is not very healthy. We can attribute its reasons to the following factors:
(i) Lack of infrastructural facilities ;
(ii) Non-supportive attitude of financial institutions which works more on papers. The procedure to avail the loan facility is so time consuming that its delay often disappoints the entrepreneurs.
(iii) Lack of technical know-how ;
(iv) Lack of communication facilities and market information. Information technology has penetrated into rural areas through Internet but rural areas have hardly availed its benefits.
(v) Lack of warehousing facilities. The dilapilated condition of industrial estates proves it and location of these houses hasn't been proper.
(vi) Incentives offered are many.Banks do provide concessional loans but their rules are very rigid. Their reluctance to grant loans for the working capital adds to the problems of the rural entrepreneurs.
(vii) Lack of Quality management.
According to Ninth Plan, the major problems faced in developing entrepreneurship in rural areas are :
(i) Inadequate flow of credit.
(ii) Use of obsolete technology, machinery and equipment.
(iii) Poor quality standards.
(iv) Inadequate infrastructural facilities.
Thus we see that rural industrialization is important for the country’s prosperity since India lives in villages. Development of village industries in rural areas is the solution to alleviate rural poverty. Such industries are an integral part of the village economy and help in the upliftment of rural masses through diversification of their occupational base.