Tamil Nadu Rural Transformation Project (TNRTP): A Push To Rural Entrepreneurs

In partnership with the World Bank, the Tamil Nadu government has launched a rural transformation project to support rural entrepreneurs in the farm, off-farm, and non-farm sectors. The World Bank contributes 70% of the funding, with the remaining coming from the government.

The Focus on poverty alleviation and enterprise promotion

The Tamil Nadu Rural Transformation Project (TNRTP) now has an official brand name: VazhndhuKattuvom, and it seeks to create a business ecosystem that enriches skills and encourages entrepreneurship among self-help groups (SHGs) and their households, in addition to poverty alleviation.

Operational Areas For Project

In total, 3,994 village panchayats in 120 blocks in 31 districts are part of the project. "The project is a paradigm shift from concentrating on poverty alleviation to enlisting entrepreneurs and those who want to relocate beyond livelihood strategies to envision entrepreneurial ventures, attempting to create more job opportunities in rural areas, and also supporting migrants who've already returned to their villages during the COVID-19 period," a senior government official said.

The Vision of Tamil Nadu to be  a trillion-dollar economy by 2030

To realize Chief Minister M.K. Stalin's vision of establishing Tamil Nadu a trillion-dollar economy by 2030, enterprise groups and a business-driven ecosystem at different levels would need to expand. According to the official, the project aims to make women a crucial stakeholder in the development and growth trajectory. It focuses on enterprise promotion at the individual and collective levels through numerous subsets.

The Major Stakeholders

The Enterprise Group (EG) is one subgroup — a group with common ownership and control over company operations, a shared profit and loss, and the goal of lowering the cost of production, improving quality, and boosting revenues. At the village level, each EG will have 10-30 members and will be established as a Micro Small Medium Enterprise (MSME) Registration/Partnership Firm/Limited Liability Firm.

Producers of a certain commodity in a village come together for aggregation, productivity enhancement, and collective activities to boost revenue in the Producer Group (PG) model. A PG is established by mobilizing between 30 and 150 members. Based on their business proposals, each PG receives a start-up grant of up to Rs 75,000 in financing.

The Producer Collective is yet another entrepreneurship model. It brings together a large number of producers for aggregation, value addition, advertising, and service providing to achieve economies of scale, and membership is typically between 300 and 3,000 producers.

For certain commodities especially in sparsely populated tribal areas, the size of a PC can vary between 150 and 300 producers, with eligibility to a start-up grant of up to 30 lakh to address problems in commencing commercial operations and covering operating expenditures.

Another component is the Matching Grant Program, which aims to close the demand-supply gap in access to financial credit for rural enterprises such as producer companies, first-time businesses, and women-led businesses, all of which are deemed to be high-risk. The partnering financial institutions would disburse 70% or more of the approved loan, while the remaining 30% would be subsidized by the bank.

At the block level, there is also MahalirVazhvaadharaSevaiMaiyam, a one-stop small company facilitation-cum-incubation center. In addition to channeling the Matching Grant Programme, it provides business development assistance services to individual and group firms.

Community skill schools, as part of the program, give instruction in traditional arts and crafts and highly remunerative trades through locally accessible master craftsmen/expert practitioners. This can aid in the search for a job.

Furthermore, community farm schools attempt to transfer learnings and knowledge from the lab to the land and vice versa. It aims to create a cadre of technical service providers in agricultural and associated sub-sectors known as Skilful Personal Ability Attitude Resourceful and Knowledgeable (SPARKs) to increase skills within the community.

Similarly, the Migrant Support Centre (MSC), a joint effort of TNRTP and Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDUGKY) aims to provide assistance to migrants inside the state. The MSC service collaborates with companies to utilize skilled staff to make to the state's GDP, in addition to assisting migrants in accessing better services and offering information on health, education, financial literacy, and social security skills.

The Project involved 53% of Total beneficiaries

Until February, the project has served 3,77,367 people, with women representing 53% of the total. The enterprise project builds on a prior program that emphasized women's empowerment and poverty reduction in rural regions through a community-driven development approach.

 The key successes of previous were empowering women by establishing strong community organizations like village poverty reduction committees and panchayat level federations, as well as assuring employment for rural women. Some of the women worked for Intimate Fashions, which has a factory in Chennai and manufactures clothes for the globally recognized lingerie brand Victoria's Secret.

According to the official, the current enterprise project builds on key learnings from the previous project, such as participatory identification of the target group, decentralizing training to the habitation level for mobilizing members, making sure participation of women in decision-making, and increasing women's involvement in Gram sabha meetings.