Rural Entrepreneurship through Restructuring State Finances : A Note for Policy

If India's rural economy is considered to be demand deficient (due to low per capita income) then there is the need to raise the level of income of rural people through encouraging rural economic activities (both agricultural and non-agricultural); rural entrepreneurship needs to be encouraged. Better rural infrastructure removes supply-side bottlenecks and helps enterprises to grow. For rural infrastructure not only the level of capital outlay has to be increased, but a clear-cut policy also needs to be adopted. If a significant proportion of the capital outlay is diverted towards infrastructure in 'core' urban areas, mitigation of income disparity between rural and urban areas will continue to remain a far-cry.