Lok Sabha Question No. 1979 (UNSTARRED), answered on 2025-03-11
Subject: Rural MSME Cluster
Ministry: RURAL DEVELOPMENT
Asked by: Dr. Prabha Mallikarjun

## GOVERNMENT OF INDIA MINISTRY OF RURAL DEVELOPMENT DEPARTMENT OF RURAL DEVELOPMENT

## LOK SABHA UNSTARRED QUESTION NO. 1979 ANSWERED ON 11/03/2025

## RURAL MSME CLUSTER

## 1979. DR. PRABHA MALLIKARJUN:

Will the Minister of RURAL DEVELOPMENT be pleased to state:

- whether the Government has explored transforming rural areas agro-industries, promoting  rural  startups,  and  encouraging  skill-based  local enterprises, particularly in light of the post-pandemic trend of
- (a) into employment hubs by incentivizing reverse migration;
- (b) whether the Government is aware that rural areas continue to struggle with digital banking infrastructure, if so, the initiatives taken  to  achieve  full  financial  inclusion  by  expanding  digital banking,  micro-financing,  and  fintech  solutions  in  unbanked villages;
- (c) whether  the  Government  has  considered  innovative  water conservation  models  such  as  underground  aquifer  recharge, community rainwater harvesting, and providing incentives for drip  irrigation  to  address  frequent  droughts  in  many  parts  of Karnataka, especially in Davanagere district; and
- (d) whether there is  any  plan  to  establish  a  Rural  MSME  Cluster Davanagere's strong base in agriculture and textiles to support local entrepreneurs, weaving cooperatives, and agroprocessing industries?

## ANSWER

MINISTER OF STATE IN THE MINISTRY OF RURAL DEVELOPMENT (SHRI KAMLESH PASWAN)

(a):      With a view to ensure overall socio-economic development of rural  areas  of  the  country  and  check  migration,  Ministry  of  Rural Development (MoRD) is implementing a number of schemes/programmes with the main focus on increasing livelihood opportunities, empowering rural women, providing social safety net,

skilling of rural youth, infrastructure development  etc.  These include  Mahatma  Gandhi  National  Rural  Employment  Guarantee Scheme (MGNREGS), Pradhan MantriAwaasYojana-Gramin (PMAYG), Pradhan Mantri Gram SadakYojana (PMGSY), DeendayalAntyodayaYojana  -  National  Rural  Livelihoods  Mission (DAY-NRLM), DeenDayalUpadhyayaGrameenKaushalyaYojana (DDUGKY),  Rural  Self  Employment  Training  Institutes(RSETIs)  and National  Social  Assistance  Programme  (NSAP)  and  Watershed Development Component of the Pradhan MantriKrishiSinchayeeYojana (WDC-PMKSY). Under DAY-NRLM, efforts have been made to promote Farm and Non-Farm enterprises through  the  MahilaKisanSashaktikaran  Programme  (MKSP)  and Start-Up  Village  Entrepreneurship  Programme  (SVEP).   RSETI  is  a bank-led,  MoRD  funded  training  institution  which  provides  training for skill and entrepreneurship development.

In  addition  to  this,  Ministry  of  Micro,  Small  and  Medium Enterprises  (MSME)  is  implementing  Prime  Minister's  Employment Generation Programme (PMEGP), which provides financial assistance  to  both  urban  and  rural  entrepreneurs  to  set  up  new ventures. Ministry of Agriculture and Farmers' Welfare is implementing  a  Central  Sector  Component  'Establishment  of  Agriclinics  and  Agri-Business  Centres'  to  supplement  the  efforts  of public extension, support agricultural  development  and  create gainful self-employment opportunities to the youths with qualification  in  agriculture  and  allied  sectors.  Further,  Agriculture Infra  Fund  (AIF)  has  been  instrumental  in  transforming  rural  areas by  strengthening  rural  infrastructure,  promoting  agribusiness,  and generating  employment  opportunity.  It  aims  to  enhance  farmers' income by developing modern post-harvest infrastructure, reducing losses and ensuring better price realization. It focuses on farm-gate storage,  logistics,  and  value  addition  through  warehouses,  cold storage, sorting  units,  and  ripening  chambers,  enabling  farmers  to access larger markets with fewer intermediaries. Further, Pradhan Mantri  MUDRA Yojana (PMMY) provides loans to small businesses and entrepreneurs. These measures are aimed at creating sustainable employment  opportunities in rural areas, reducing migration, and enhancing local economic development.

- (b): The  Government  is  aware  of  the  challenges  faced  in  rural areas  in  digital  banking  infrastructure.  To  address  this,  various initiatives  are  being  undertaken  to  achieve  full  financial  inclusion. The Pradhan Mantri Jan DhanYojana (PMJDY) has been instrumental

in providing universal banking services for every unbanked household.  Government,  Reserve  Bank  of  India  (RBI)  and  Banks have  taken  various  measures  to  promote  and  create  awareness about  digital  banking  services  such  as  (i)  The  Digital  Finance  for Rural  India  -  Creating  Awareness  and  Access  (DFIAA)  Scheme  for conducting awareness sessions on digital finance options available for rural citizens; (ii) Pradhan MantriGramin Digital SakshartaAbhiyaan  Scheme  is  implemented  as  a  Central  Sector Scheme  by  Ministry of Electronics & Information Technology through  Common  Service  Centres  (CSC)  e  -  governance  services India Ltd with active collaboration of all the State governments and Union Territories (UTs); (iii) RBI conducts Electronic Banking Awareness and Training Programmes through its regional offices to create awareness about digital payments; (iv) RBI has been carrying out  multi-channel  public  awareness  media  campaigns  to  sensitise public about how to be vigilant while using digital banking. RBI has also  carried  out  multi  lingual  media  campaigns  on  themes  like Convenience of Digital  Banking,  Safety  of  Digital  Banking  etc.;  (v) RBI  conducts  Financial  Literacy  week  every  year  since  2016  to propagate  financial  education;  (vi)  Banks  conduct  special  camps through  their  Financial  Literacy  Centres  (FLCs)  on  'Going  Digital' through  Unified  Payments  Interface  (UPI)  and  *99#  (USSD);  (vii) Rural Branches of Banks conduct camps covering all the messages of Financial Awareness Messages Booklet and two digital platforms i.e.  UPI  and  *99#  USSD;  and  (viii)  Banking  Correspondents  also create awareness while facilitating transactions in the rural areas because of their familiarity with local population.

Furthermore,  the  India  Post  Payments  Bank  (IPPB)  extends banking  services  to  rural  areas  through  post  offices,  enhancing access to financial services. DAY-NRLM of MoRD is also providing last mile delivery of financial services in remote rural areas where people  do  not  have  much  access  to  banking  services,  through promotion  of  digital  finance  and  deployment  of  SHG  Women  as Banking Correspondent Sakhi (BC Sakhi), with the support of banks and Common Service Centres.

(c): The  Government  is  committed  to  addressing  the  issue  of water scarcity, including Karnataka. As informed by Department of Water  Resources,  River  Development  and  Ganga  Rejuvenation, Central  Ground  Water  Board  (CGWB)  has  completed  the  National Aquifer  Mapping  (NAQUIM)  Project  in  the  entire  mappable  area  of about  25  Lakh  sq.  km  in  the  country.  The  Aquifer  maps  and

management  plans  have  been  prepared  and shared with the respective  State  agencies  for  implementation.  The  management plans include various water conservation measures through recharge  structures.   MoRD  is  implementing  WDC-PMKSY  which primarily  focuses  on  development  of  rainfed/degraded  lands.   The activities  undertaken  in  the  scheme, inter  alia, include  ridge  area treatment, drainage line treatment, soil and moisture conservation, rainwater harvesting, nursery raising, pasture development, livelihoods  for  asset-less  persons  etc.   The  measures  taken  under WDC-PMKSY supplement the effort of the Government to increase the  area  under  cultivation.   Similarly,  Ministry  of  Agriculture  and Farmers' Welfare is implementing a Centrally Sponsored Scheme of Per Drop More Crop (PDMC) which focuses on enhancing water use efficiency at farm level through micro irrigation systems.

(d):      The  Government,  through  Ministry  of  MSME  is  implementing Scheme  for  Registration  of  Traditional  Industries  (SFURTI)  for making  traditional  industries  more  productive  and  competitive  by organizing  the  artisans  into  clusters  to  provide  support  for  their long-term sustainability and economies  of scale. This  scheme focuses upon physical infrastructure creation, technology upgradation, training, product development, innovation, design interventions,  marketability,  improved  packaging,  and  marketing infrastructure with aim to improve artisanal income of the Traditional Industries. The Traditional industries have been broadly categorized as Khadi industries, Village Industries and Coir Industries.  As per the official website of the Ministry of MSME, one cluster  namely  the  HariharaKhadi  Cluster  is  under  operation  in textile sector in Davangere District of Karnataka.

*****