Transforming Rural Economies- National Rural Economic Transformation Project (NRETP)- 2019

Policy Update
Sana Ansari

The National Rural Economic Transformation Project (NRETP) is a significant initiative aimed at empowering women in rural India. Launched in 2019 by the Ministry of Rural Development, the project is supported by a $250 million agreement between the World Bank and the Government of India. It builds on the foundation of the National Rural Livelihoods Project (NRLP), which began in 2011.

The NRLP has successfully mobilized over 8.8 million rural women into 750,000 self-help groups across 13 states, 162 districts, and 575 blocks.The NRETP focuses on promoting women-owned and women-led enterprises in both farm and non-farm sectors. It helps women develop viable businesses and access finance, markets, and networks. The project supports rural women and youth through enterprise development programs and startup financing. It also emphasizes digital financial services to scale up small producer collectives and enhance market engagement.

A key element of the NRETP is skill development for rural youth, aligned with the Deen Dayal Upadhyaya Grameen Kaushalya Yojana. Peer-to-peer learning, a proven strategy under the NRLP, is also integral to the project. Additionally, the NRETP aligns with India’s broader rural development goals and global commitments like the Sustainable Development Goals (SDGs), particularly SDG 1 (No Poverty), SDG 5 (Gender Equality), and SDG 8 (Decent Work and Economic Growth).  

Key Features

  • Promotion of Women-Led Enterprises
     NRETP focuses on supporting women-owned and women-led farm and non-farm enterprises across value chains, enabling them to build businesses that facilitate access to finance, markets, and networks. The project provides access to financing for startup ventures and facilitates the development of both individual and collective businesses. It draws lessons from successful programs like the Start-up Village Entrepreneurship Program (SVEP) and international models such as BRAC and the Village Enterprise Model. 
  • State Livelihood Support
    NRETP focuses on strengthening rural livelihoods by increasing economic activities such as value chain development, enterprise promotion, and skills enhancement. The project collaborates with State Rural Livelihoods Missions (SRLMs) to support select districts by mobilizing and strengthening producer collectives. Investments are made in infrastructure for sorting, grading, food handling, hygiene, storage, and small-scale processing, which improve productivity. 
  • Skill Development and Training
    NRETP aims to enhance the availability of skilled labor within rural value chains and enterprises. The project aligns skill development initiatives with the objectives of enterprise and value chain growth, enhancing job opportunities for rural poor women and improving their income through upgraded self-employment skills. The use of Rural Self Employment Training Institutes (RSETIs) ensures that training programs are aligned with national standards, equipping participants with relevant, industry-recognized skills.
  • Integrated Support Strategy
    NRETP employs an integrated support strategy that combines financial, technical, and social assistance to strengthen rural entrepreneurship. This holistic approach ensures that participants receive comprehensive support, enhancing their capacity to succeed in the marketplace. Through collaborations with the private sector and peer learning across states and communities, the project fosters a knowledge-sharing environment that enables rural producers and entrepreneurs to thrive.  
  • Digital Financial Services
    Digital financial services play a key role in NRETP’s strategy to promote financial inclusion. The project develops digital financial products tailored for small producer collectives and rural enterprises, improving their market access. It also supports higher-order financing for micro-enterprises, using technology to enhance growth and financial opportunities.

Performance

The National Rural Economic Transformation Project (NRETP) has greatly improved rural livelihoods, especially for women and youth. The project has helped over 2.5 million women entrepreneurs by providing skills, market access, and financial support. It has also supported more than 1.5 lakh producer collectives to strengthen value chains and connect to high-value markets.

Over the past decade, rural women’s participation in non-farm jobs has increased. This growth has been supported by NRETP’s focus on developing rural enterprises. The project has introduced digital financial services to over 1 million women. This has reduced their reliance on informal loans by giving them access to better financial products. It has also created credit histories for SHG members, helping them secure larger loans.

NRETP works with state-level projects like BTDP, JOHAR, and TNRTP to support rural economies. It has introduced climate-resilient practices and new technologies to both farm and non-farm sectors. The project has shown that education and skills can transform lives. For example, a 10% rise in women’s education has been linked to an 18% increase in entrepreneurship. These efforts show the lasting impact of NRETP on rural communities.

Impact 

  • Gender
    NRETP has empowered women by promoting their participation in rural enterprises and producer collectives. It enhanced women’s skills and provided access to financial literacy and self-employment opportunities. Over 2.5 million women have been supported, improving their economic independence and reducing reliance on informal credit systems. The project also created platforms for women to advocate for social safety nets and entitlements.
  • Environment
    The project introduced environmentally sustainable practices into livelihood activities. Environmental safeguards ensured compliance with regulations, while awareness programs promoted better resource management. By integrating sustainability into its design, NRETP encouraged the adoption of eco-friendly practices that minimize adverse impacts on natural resources.
  • Climate
    NRETP addressed climate risks by diversifying rural incomes and integrating adaptive strategies. It supported high-value crops, better land management, and livestock health practices to mitigate the effects of droughts, floods, and extreme temperatures. These measures helped build resilience among rural communities and reduced vulnerabilities to climate hazards.
  • Technology
    The project utilized technology to drive financial inclusion and improve rural livelihoods. Digital payment systems and transaction-based credit histories provided women with access to formal financial products. These innovations empowered rural entrepreneurs and reduced dependency on informal lending.
  • Citizen Engagement
    NRETP fostered citizen participation through community-led planning and monitoring. Women-led village organizations and producer collectives created action plans and tracked outcomes. Feedback mechanisms like helplines and public hearings addressed grievances and ensured transparency. These efforts strengthened rural governance and empowered communities to take charge of their development. 

Emerging Issues

The National Rural Economic Transformation Project (NRETP) has faced several criticisms and challenges since its inception. One significant issue is the persistent lack of employment opportunities for rural women. Over the past decade, while 27 million women transitioned from farm to non-farm sectors, the decline in agricultural jobs was not adequately compensated by other employment avenues. Consequently, many women withdrew from the labor force due to factors such as safety concerns, job immobility, lack of skills, and increased male earning potential.

The NRETP’s implementation has also been critiqued for its scalability and effectiveness. A qualitative analysis of community-level facilitation in Bihar revealed that as the project scaled from its first to second phase, challenges emerged in maintaining the quality of implementation. The study found that differences in project phases affected the dynamics of community participation and the effectiveness of interventions.

Furthermore, the project’s focus on digital financial services, while innovative, has faced hurdles due to limited digital literacy among rural populations and inadequate infrastructure. These challenges have impeded the seamless adoption of digital financial products, potentially limiting the project’s reach and impact. 

Way Forward 

The way forward for the National Rural Economic Transformation Project (NRETP) involves addressing key challenges to ensure its long-term success. First, enhancing employment opportunities for women requires a focus on sustainable and safe employment options, skill development, market access, and addressing safety concerns. Empowering women through entrepreneurship needs targeted training, finance access, and mentoring.

Second, strengthening digital financial inclusion by improving digital literacy and infrastructure in rural areas is essential to make financial services more accessible. Third, integrating climate-resilient practices into rural economic activities is crucial to mitigate the impacts of climate change. This includes diversifying income sources, adopting climate-smart agricultural techniques, and improving disaster preparedness, especially for vulnerable groups like women. Finally, scaling the project while maintaining community participation is vital. Ensuring quality implementation and continued capacity building at the grassroots level will sustain the impact and ensure inclusivity.

Conclusion 

The NRETP has successfully laid the groundwork for transforming rural economies and empowering women through various economic, social, and technological interventions. However, for it to achieve its long-term goals, it is critical to address emerging challenges in employment, digital inclusion, and environmental sustainability. By continuing to adapt and refine its strategies based on lessons learned and community feedback, NRETP can drive substantial and lasting improvements in rural India. 

References

About the Contributor– Sana Ansari, researcher at IMPRI pursuing Master’s in public policy from St. Xaviers college Mumbai. 

Acknowledgement– The author would like to thank IMPRI for the opportunity and Arjun and Devananda  for reviewing the article.

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