Abstract : Today, increasing cost of chemical fertilizers along with declining yield response to increased fertilizer application and degradation of soil, limit the soil fertility choices available to farmers. Even if part of the increased demand for fertilizers could be met from bio-fertilizers, it is likely to result in savings for farmers. This is especially important for developing countries such as India where farming will continue to be in the hands of small farmers, who cannot afford high priced fertilizers (even though there is already a nearly 80% subsidy being given to the fertilizer industry). Literature on innovation systems points out that pro-poor innovation in rural areas is most likely to occur through small-scale ventures and entrepreneurs. Biofertilizers as cheap and safe inputs for farmers provides lot of scope for local employment through decentralized rural infrastructure, more skills and capacities to address technology, research and production capacities of soils.