Panchayats, the grass-roots democratic institutions, hold the constitutional mandate to promote social and economic development in rural areas. The Rural Business Hub (RBH) initiative is aimed at moving from mere livelihood support to promoting rural prosperity, increasing rural non-farm incomes and augmenting rural employment. The objective of the scheme is to spread the benefits of India’s rapid economic development to the rural areas through the medium of Panchayati Raj Institutions (PRIs). Rural Business Hub is a participatory development model for the rural areas of the country that is built on the platform of 4-P, i.e. Public-Private-Panchayat-Partnership.

The resources required for setting up RBH are to be mobilized primarily through convergence of ongoing Central/State Schemes, programs of partnering institutions etc. However, a token funding is available from the budget of Ministry of Panchayati Raj.

The RBH initiative has been as a 4-P model (Public-Private-Panchayat-Partnership) with clearly laid out roles and responsibilities for each of the partners. Panchayats perform the key role of identifying skills and endowments of people and natural resources, address the concerns of local inhabitants, establish and sustain community linkages, extend institutional support to viable business initiatives that benefit the rural populace and at a later stage, integrate the economic development plan emerging from RBH initiative with the decentralised district planning process. The business partners would perform the roles of identifying local skills / products that have wider market potential, prepare Business Plans acceptable to the community and provide sustainable local employment. The Central/ State Governments would support the initiative through conducive policy regime, dovetailing government schemes, bridging critical gaps in infrastructure etc.

Present Status

In consultation with State Governments, thirty five districts have been identified for focused RBH intervention. Services of reputed organizations have been enlisted as Gateway Agencies for supporting Panchayats in identification of potential RBHs and their development. RBH workshops were held in twenty six districts and champion products were identified.

Revised Guidelines have been issued on August 13, 2009 allowed holding of sub-district level workshop. According to the Guidelines, funds can be provided for setting up of RBH in all the 250 districts covered under the Backward Region Grant Fund scheme of the Ministry of Panchayati Raj and all the districts in the North Eastern Region.

Financial assistance to fifty seven projects under the RBH scheme has been extended so far.

Unique feature of the Scheme

It links rural producer with the wider market through a marketing partner and develops this as an integrated business relation benefitting both sides and is, therefore, sustainable.

Panchayats/Rural Local Self Governments – the democratic grass root level institutions playing the key role of planning and implementing plans for economic development, wherein the plans are based on local resource endowments, felt needs of people and relative absorptive capacity.

The project is located in a rural area and is based on economic activity and generates rural employment and livelihood.

The Scheme is demand-based and there is no State-wise allocation.

Future Plans

To popularize and widen the horizon of the Scheme, currently the Entrepreneurship Development Institute of India, Gujarat, is undertaking a study on Evaluation and Restructuring of RBH.