A new industrial policy for rural enterprise

This World Entrepreneurs' Day, while we continue to celebrate founders ringing stock exchange bells, let’s also talk about a much larger, quieter class of entrepreneur: the ones running enterprises across India's villages and small towns. They offer the most compelling pathway for how India can convert its demographic dividend into shared prosperity for all.

India's working-age population has just crossed one billion, and the country is just 15 years away from closing the window of its much-celebrated demographic dividend. That is, however, still a meaningful runway (if we use it well) to build the largest productive workforce in the world. But it will need a new playbook. Even with GDP growing at 6–7% a year, an honest assessment of the available avenues will show that traditional engines of employment — manufacturing (whose share of employment has held steady at 11–13% for two decades) and high-end services (skill-intensive, concentrated in cities) — cannot absorb everyone entering the labour force, no matter how much effort and investment are put into this.

While entrepreneurship, as exemplified by Startup India, follows the playbook of innovating new ideas and solutions using cutting-edge technology and unlocking new market opportunity, there is a different kind of entrepreneur, following a different type of playbook, who is transforming village economies. Village after village, at least five inspiring entrepreneurial archetypes stand out. There's the digital connector — often called a "saheli" — who uses a smartphone and her own standing in the community to bring products and services to markets that never had them, becoming her village's storefront to the world. Think Frontier Markets' Sahelis, or 1Bridge's Advisors. There's the aggregator — running the milk or grain collection centre that a larger business depends on for sourcing volumes at a high quality, turning local trust into a formal link to a much bigger value chain. DeHaat or Agrostar's collection centres are a good example of this. There's the value-enhancer, processing and branding a local product, ranging from blended spices to bamboo baskets to handmade pottery, and pushing it into bigger domestic or export markets. The local services provider, converting a high investment asset that could only be afforded by a few into a rental business model thereby unlocking latent demand, such as drone spraying or harvesting. And finally, there's the flexible operator – picking up a business, often in the agricultural off-season, to build a second income stream. The gig workers of Karya fit this model.

What is striking is what these five archetypes have in common: the problems they solve repeat almost identically from village to village, which is exactly why the Global Alliance for Mass Entrepreneurship (GAME) uses the term "mass” entrepreneurship — these are business models that are standardisable and replicable, not one-off. They have low barriers to entry - skill requirements are coachable, not degree-dependent and capital needs are typically modest. These entrepreneurs are becoming key levers of rural growth — unlocking latent demand as incomes rise, making local economies more efficient by aggregating fragmented supply and demand, and opening channels for outside investment through contract models and digital service delivery.

The encouraging part is that some policy attention to these entrepreneurs already exists — the Ministries of MSME, Rural Development, Agriculture and Skill Development have relevant programmes – in the form of Udyam, Drone Didi, Entrepreneurship and Skill Development Program (ESDP), among others. However, these are fragmented and treat every small business the same, without recognising that different archetypes need different boosters for growth and productivity. The opportunity now is to knit these policies together deliberately, and to widen the toolkit beyond finance.

India’s Industrial Policy playbook offers some lessons: pick winner sectors — semiconductors, electronics, solar photovoltaic, GCC — design sector-specific incentives, get states competing, build fit-for-purpose agencies which can cater to the entire lifecycle of the investment, and reconfigure the skilling pipeline to match demand for talent. This approach has reshaped how India thinks about manufacturing and high-skilled services. Rural India deserves the same ambition and the same rigour — this time built around mass entrepreneurship and catering to the myriad archetypes described above. So, what could the Rural Enterprise Policy framework look like?

1. Identify and de-risk. Figure out which sectors — agriculture, allied activities, logistics, warehousing, tourism, renewable energy — and which business models are genuinely ready for take-off: collection centres, irrigation and cold-chain services, last-mile logistics, and fast-emerging bets like solar installation and maintenance and EV-charging outposts. Turn these into playbooks and enterprise archetype playbooks, so entrepreneurs start with a proven value proposition and directional blueprint to run their businesses.

2. Make entrepreneurship aspirational and start early. Bring entrepreneurship into the last mile — through schools, and colleges and revamping institutions like RSETIs — so it's seen as a real career choice, not a fallback to the mirage of a ‘stable government job’. Facilitate a greater matching of entrepreneur (basis ambition, risk-taking appetite, time availability) with different archetypes of enterprise to ensure a greater chance of success.

3. Invest in facilitation on the ground. Every state has an investment facilitation agency for big industry. Rural India needs its equivalent: reimagined District Industries Centres acting as enterprise facilitation hubs at the last mile — engaging with promising entrepreneurs, helping them find the right business model given their ambition and aptitude, facilitating supply chain links to larger industrial players, helping debottleneck the pathways to credit access and enabling ease of doing business and regulatory permissions or licenses.

4. Get more and different kinds of finance into the ecosystem. For enterprises, move beyond collateral-based term loans. Build more products suited to how these businesses actually operate — cashflow-based credit that recognises seasonality, and underwriting based on alternative signals like UPI transaction data. Find ways to offer seed and equity funding for high potential enterprises and more risk guarantees to take care of short-term financial shocks. And direct more investment to innovators (both in rural and urban) who can provide growth platforms and market facilitation for these rural enterprises, players like S4S Technologies or a new hypothetical Rural Company doing what Urban Company did for informal urban entrepreneurs.

5. Put AI and digital public infrastructure to work. Strengthen the data rails that can support alternative underwriting and portable records of a local enterprise's credentials and performance. Use AI/GenAI-models to further amplify productivity gains, e.g., an AI co-pilot enabling an electrician to retrain on the job as a solar technician, in their own language and at their own pace, or the Vyaapar Mitra offered by Leap300 as a business coach for early entrepreneurs.

Many of these ideas have been tried before, in isolation or at pilot scale. What's different today is two-fold: first, there is a growing ecosystem of players (technology, big business, credit, etc.) who have the incentive to meaningfully engage with these enterprises to drive their viability and growth, and second, there is a new array of policy levers that has the potential to serve as a force multiplier – if designed right. The window is narrow, the opportunity is enormous, and the entrepreneurs are already at work. Let’s build the policy architecture and ecosystems they need to thrive.

Aparna Bijapurkar (Managing Director & Partner, Boston Consulting Group) and Simran Ahluwalia (Project Leader, Boston Consulting Group); views are personal