Emergence of Entrepreneurial Class in India


Since ancient times, the Indian entrepreneurial class has been world-renowned for its art-skills and business proficiency. Chinese traveler Hiuen Tsang has praised India’s industrial splendor, handicrafts and craftsmanship in his travel descriptions. The industrial and artistic crafts of India are unmatched in the world. India’s artisans, craftsmen, artisans and entrepreneurs have been rewarded generation after generation for their art-skills. Indian artistry has been appreciated all over the world. For example, Korah of Bengal, dhotis and dupattas of Ahmedabad, silk fringed garments of Nagpur, shawls of Kashmir, brass, copper and metal utensils of Banaras, Mumbai, Poona and Hyderabad have been very famous abroad. Marwari entrepreneurs of India have been known in different countries for their business acumen, integrity and hard work.

Entrepreneurial class

Development of Entrepreneurial Class


After a careful study of all these facts, we can say that the major factors affecting the emergence of the entrepreneurial class are as follows:

1. Caste – History in India is a witness to the fact that most of the entrepreneurial class in our country has originated on the basis of caste. Certain religions or castes encourage entrepreneurial dexterity; For example, Agrawal, Khandelwal, Parsi, Marwari, Gujarati, Jain, Sindhi, Maheshwari etc. These castes still have a monopoly on the industries of India.

2. Family Background- Family background has played an important role in the emergence of entrepreneurial class. Most of the large industries in our country are monopolized by certain family groups; Like- Reliance Group, Birla Group, Tata Group, Bajaj Group, Singhania Group, Modi Group etc. Elevating one’s family, doing independent work, employing family members to earn a lot of money, foresight, earning prestige etc. have encouraged the emergence of entrepreneurial class in many ways.

3. Occupational Background- Professional background has played an important role in the emergence of entrepreneurial class. As far as being attracted towards entrepreneurship is concerned, people from professional background are more attracted towards entrepreneurship than in agriculture sector. Actually entrepreneurship is not limited to any particular profession but it requires qualities like instinct, passion, courage, skill, technology, vision etc.

4. Religious Background- Religious background has also influenced the emergence of entrepreneurial class. According to Max Beaver, Protestant ethics has led to the development of entrepreneurial spirit among Christians.

5. Education and Technical Knowledge – Today it is a difficult task to establish an enterprise without education and technical knowledge. Education and technical knowledge have an important contribution in the emergence of entrepreneurial class. It is a well known truth that today without educated people cannot establish industries. Nowadays, a large number of youth are entering professional and industrial institutions from schools, colleges, technical institutes, management science institutes, training institutes etc. Business and industrial scenario is getting complex day by day due to many reasons, due to which the importance of education and technical knowledge automatically increases in the emergence of entrepreneurial class.

6. Migratory Character: Migration character plays a major role in the emergence of the entrepreneurial class. If we survey the establishment of industries of different states in India, then it is found that the industries there have been established not by the local people but by the people who came from outside the states. The Marwari society of Rajasthan is a prime example of this. This society is spread in different states of the country.

7. Individual Factor – Personal tact, skill also majorly influences the emergence of the entrepreneurial class. When a person plans to start a new business, he has to mobilize the necessary resources, manage, plan for development, face various challenges by taking risks and develop his personal abilities, qualities. And by efficiency, that undertaking has to be made profitable.

8. Form of Ownership – The form of ownership plays an important role in the emergence of the entrepreneurial class. Under the nature of ownership, sole business, partnership company etc. At present, due to the various formalities in the establishment of the company, priority is given to the establishment of partnership form. Solitary business has not been successful due to not being favorable to the present circumstances.

Although before independence, commercial entrepreneurship was concentrated in only a few communities in our country, but after independence due to economic planning, an integrated and balanced development of entrepreneurship has gained momentum. The story of the development of entrepreneurship in India starts with its ancient art of entrepreneurs and reaches to the construction of large industrial houses.

The contemporary analysis of the development of the entrepreneurial class in India can be divided into the following two parts-

(A) Development of entrepreneurship before independence

Indian society has been divided into different classes since ancient times. Entrepreneurial work was done only by the people of Vaishya Varna. Other communities were indifferent to commercial activities. Gradually, due to the decline of the varna system, people of other castes also became members of the business community. Gujarat and Saurashtra provinces were such developed urban areas in India in which foreign trade was also done. Bania community (Jain and Hindu) and Muslim trading community (Bohra, Khoja and Khichi etc.) were prominent in these states, who were maintaining their trade relations with countries like Africa, Malaysia, Arabia, Indonesia, Malaya etc.

In the 18th century, Parso came to Gujarat from Persia and started working as a craftsman, khadi, weaver etc. Their foreign trade was mainly of cotton and opium. In the 18th century, they started doing shipbuilding work and established their trading houses in Mumbai, Burma, China and London. Many Parsis were also acting as agents of European traders. Thus by the 19th century the Parsi and Gujarati merchant castes had become the wealthiest in India, in whose hands the entire foreign trade of India was concentrated. The ‘Khatris’ were prominent in the adventure class in southern India, which were divided into different classes, such as the Telugu Kaumati, Tamil Nadu Khatri, Bari Khatri etc. In the south on the western seaboard, most of the trade was concentrated in the hands of the Sorian Christians and Muslim merchants, known as Moplah. He did trade, industry and banking work with British employers, but gradually Bengali merchants started investing in real estate instead of their wife’s business. The most successful entrepreneurs in the field of business and industry are Marwaris of Marwar region of Rajasthan. He had established a good hegemony in the business by opening his firms in Rajasthan, Gujarat, Mumbai, Kolkata and Uttar Pradesh.

The rise of industrial entrepreneurship in India did not take place before 1850 due to the absence of a sound industrial structure. Although some artistic objects were made by handicraft in cities like Banaras, Gaya, Puri, Mirzapur etc., there was lack of industrial activities due to lack of initiative by foreign power and various structural problems. Many merchants from India were settling in other countries like Varma, Malaya, Singapore, Kenya, China, Hong Kong etc. Lack of worship, lack of political unity, tax barriers, etc. were the main reasons for the lack of early development of entrepreneurship in India.

With the advent of the ‘East India Company’, manufacturing entrepreneurship emerged in India. This company encouraged various changes in the Indian economy. The Parsis had established good relations with the English by establishing the first shipbuilding factory of ‘East India Company’ in Surat in 1673. In addition to this factory, in 1677 Manji Ghanji also got a contract for the East India Company to set up a gun powder mill at Bombay. A Parsi foreman also started a steel company in Mumbai in 1852. Agency houses have also played an important role in the progress of Indian entrepreneurship. After the monopoly of the East India Company ended in 1813, these agency houses started banking, trade, steam shipping etc. in Kolkata, Mumbai and Chennai. He made a significant contribution in discovering new methods of production, new sources of raw materials, new products and new markets.

The modern factory system in India was introduced in 1850, while Kawasji Nanabhai Davar, a Parsi entrepreneur, established the first textile mill in Mumbai. The proper establishment of the textile industry is considered to be from 1875. By 1915, Parsi entrepreneurs had contributed to its development. By 1915, out of 96 mills, 41 were established by Parsis, 23 by Hindus, 10 by Muslims and 22 by British adventurers. Parsi entrepreneurs had proved their prominence not only in the textile industry but also in the iron and steel industry. In the last two decades of the 19th century, J. N. The Tatas had established a monopoly in the field of iron and steel.

The second wave of entrepreneurship development began during and after the First World War. Sugar and cement industries developed rapidly during these years. Gujarat and Marwari entrepreneurs started emerging faster than Parsi entrepreneurs. Gujarati businessmen gained prominence in the field of production and Marwaris in spreading entrepreneurship throughout India. The bold progress in India was further boosted by the Second World War. During the war, many inspirations were provided for the establishment of new industries. Entrepreneurs also earned considerable profits and reapplied them. Before independence, only textile, jute, sugar, tea industries remained prominent for the entrepreneurs. The development of basic industries till then was negligible. Thus it is clear that till the attainment of independence, the number of entrepreneurs in the country was very less and people of only a few castes and regions had adopted entrepreneurship.

(B) Entrepreneurship development during the planning period

After independence, industrialization was encouraged in areas other than traditional industries due to industrial planning made related and systematic efforts for commercial entrepreneurship in India. The development of entrepreneurship during the planning period can be explained as follows:

(1) In the First Five Year Plan (1951-56), through public entrepreneurship, many basic establishments, such as the fertilizer factory of Sindar, Hindustan Shipyard, Hindustan Machine Tools etc. were established. Establishment of various specialized institutions, such as National Industrial Development Corporation (NIDC), Industrial Credit and Investment Corporation (L.CL.CL), Industrial Finance Corporation (LEC) and finance corporations in various states for the development and assistance of industries in the private sector. done.

(2) In order to develop basic industries in the Second Five Year Plan (1956-61), the government passed the Industrial Policy in 1956, three new steel factories were established in the government sector. Heavy electrical goods and heavy machines, tools, industries and heavy machine building and heavy engineering industries were established. tools of power to assist entrepreneurs; For example, the development of mineral oil, coal, hydropower etc. was emphasized. The cotton textile and jute industries were modernised. Along with this, many programs were started for the training of employees and development of a new class of industrial managers.

(3) From the Third Five Year Plan (1961-66) various incentives and facilities were provided to the adventurers to develop the capabilities of the existing industries. The government promoted small scale industries by providing facilities of capital, technical knowledge, market land and raw materials etc. to small entrepreneurs. For the development of new entrepreneurs, the government established many institutions, such as the Directorate of Industries, Small Industries Corporation, Small Industries Service Institutes, Finance Corporations etc. Unit Trust and Industrial Development Bank were established in 1964. Industrial adventurers were provided with special facilities for industrial research. The registered number of small adventurers increased from 1,21,619 in 1966 to 1,90,727 in 1970.

(4) In the Fourth Five Year Plan (1969-74), many changes were made in the Industrial License Policy to encourage new entrepreneurs. In the license policy of 1970 and 1973, several classifications of industries were made, such as core sector, heavy investment sector, medium sector and small scale sector. . Industrial Reconstruction Corporation (LR.C.L) was established in 1971 for the revival of sick units. Special incentives were given to the entrepreneurs of industries like aluminum, motor vehicles, parts, petroleum refining products, heavy power equipment etc.

(5) In the Fifth Five Year Plan 1974-79, emphasis was laid on rapid development of important industries and increasing the production of export-oriented goods. ₹ 9,691 crore was spent for large and medium industries and ₹ 510 crore for rural and small scale industries. The list of reserved items for small scale industries was increased. Various organizations for the development and promotion of entrepreneurs, such as Small Industries Farmers Organization (SIDO), National Small Industries Corporation Limited (NSICL), Small Industries Extension Training Institute (SIETI), National Testing House, Central Equipment and Training Center, Central Tool Design Institute, Hyderabad, Research Development Board etc. played a special role.

(6) In the Sixth Five Year Plan (1980-85), priority was given to increase the production of consumer goods as well as agricultural reforms and capital goods by increasing investment capacity in public and private sector industries. The focus was on development of new areas for production along with optimum utilization of existing capacity. The development of electronic industry was also considered important during this planning period, new projects were also made for nitrogen fertilizers and phosphate fertilizers based on natural gas.

(7) Special attention was paid to the development of entrepreneurship in the Seventh Five Year Plan (1985-90). While only ₹ 43 crore was spent on the development of rural and small scale industries in the First Five Year Plan, there was a provision of ₹ 2,752 crore in the Seventh Plan (1985-90). Many programs were also conducted for the development of women entrepreneurs. In order to develop the institutional infrastructure for entrepreneurship development, the Industrial Development Bank of India in collaboration with other institutions established the Entrepreneurship Development Institute of India in Ahmedabad.

(8) The policy of economic liberalization was adopted by the government for the development of entrepreneurship in the Eighth Five Year Plan (1992-97). Unnecessary controls and rules were removed for the development of the industrial sector and the interference of the state was reduced. In the field of industrial development, the plan outlay of ₹ 430 crore was allocated in 1995-96 as compared to ₹ 276.50 crore in 1994-95.

(9) In the Ninth Five Year Plan (1997-2002) also, a broad base was prepared to encourage entrepreneurship. During January-November 2000, 2,789 Industrial Entrepreneurs Memorandums (IEMs) and 192 Letters of Intent were filed with proposed investment intent of ` 69.814 and ` 961 crore respectively. An increasing trend was observed in FDI during January-November 2000 and FDI proposals worth ₹32,843 crore were approved as against ₹26,652 crore in January-November, 1999.

(10) In the tenth five year plan (2002-07), the policy of foreign direct investment was adopted for entrepreneurship development. Along with this, the Reserve Bank has reduced the rate of interest on loans very low so that industries can get capital at low interest for entrepreneurship development.

(11) In the Eleventh Five Year Plan (2007-12), commendable efforts were made for entrepreneurship development. Under this scheme, a total outlay of ₹ 185,633 crore was made on industry and mineral development in the public sector. Under this plan, the average target of annual growth in industries was set at 10.5%, but the average of actual growth was 6.9%.

Previous articleWhat is meant by redemption of preference shares?
Next articleMethods of redemption of preference shares

LEAVE A REPLY

Please enter your comment!
Please enter your name here