Despite rapid urbanisation, 64% of the population still lives in villages, with 80% of the rural population relying on agriculture and allied sectors for their livelihood. However, they are unable to increase their income through agriculture, and it is unable to provide sustainable employment. Although the government is implementing numerous schemes to develop rural areas, fundamental problems, such as poverty, unemployment, migration, malnutrition, inadequate education, limited medical care, and inadequate access to drinking water, persist. Approximately 70% of people living in poverty in the country reside in rural areas. The eradication of poverty remains a dream. In these situations, Agriculture and agro-allied industries are crucial in overcoming these problems in rural areas and for rural development, primarily through small-scale industries. They employ many people with low investment and in a short time. Micro and Small-scale industries (MSEs) play a crucial role in enhancing the skilled workforce in rural areas, offering sustainable employment opportunities, reducing migration, increasing the purchasing power of rural residents, enhancing rural infrastructure, and ultimately improving the living standards of rural people. This paper analyses the role and necessity of Micro and Small-Scale enterprises in rural development.