A WALK DOWN MEMORY LANE FOR THE INDIAN ENTREPRENEUR

India is celebrating its 78th year of Independence today. Over the years, India has made the journey from being a poster child for poverty to that of economic growth and development. Let us look back at the numerous economic transitions India has undergone, and how entrepreneurship has evolved through each one of those:

Pre-Independence: Seeds of Entrepreneurship

India was one of the world’s largest economies for a large part of the second millennium, particularly until the 18th century. India dominated the global markets in agricultural and artisanal products, until the colonial policy of resource extraction reduced India to a feeder nation and a captive market for British goods. Decline in royal patronage put the Indian artisan in disarray, relegating scope for indigenous businesses to just trading and money lending.

While legacy businesses set up by the Tatas, Birlas and Wadias emerged during this time, a more grassroot level shift towards Indian entrepreneurship was only seen after World War I. European industries were busy fulfilling wartime needs, therefore, local businesses stepped in to fill the vacuum that had emerged in the Indian market. Here began the ascendance of Indian entrepreneurs which carried on throughout the inter-war period. The Swadeshi Movement also played a major role in amplifying the demand for domestic goods.?

Post-Independence: Advent of Industrialization

In the post-independence years, Nehru’s prime focus was on protecting the markets from foreign competition in order to grow domestic industries. The embryonic private sector and the influence of socialist principles on Nehru led him to consolidate industrialization in the hands of the government. The state invested heavily in large industries and ensured that more than half of all industrial output in India was under state owned enterprises.

Citizens needed licenses to operate a business in the country, which were often quite difficult to obtain. The situation became widely known by the pejorative term ‘License Raj,’ a reference to the bureaucratic controls reminiscent of the ‘British Raj’. while on the surface it may seem that the entrepreneurial spirit was stifled, but the highly protected domestic market provided many lucrative opportunities. One of the largest private sector companies in India, Reliance Industries, was founded during this period.

Economic Reforms of 1991: A step towards Globalization

When foreign exchange shortage threatened a crisis in the 1970s, foreign remittances from newly migrated Indians to the Persian gulf saved the Indian economy. A similar crisis emerged in the 1990s and the government had no unlikely saviors this time. By then, the general consensus had also shifted towards allowing the private sector a greater role in the nation building process.

Subsequently, the government put into motion a 3 step plan involving liberalization, privatization and globalization. Under the plan, 80 percent of the industry was taken out of the licensing framework and Industries reserved for the public sector were narrowed down from 17 to 8. Red Tape surrounding businesses was removed and increasing global integration was welcomed.

The resulting availability of global technologies, better infrastructure, low regulatory challenges and increasing foreign investments, all contributed to creating a more conducive environment for the Indian entrepreneur. The concurrent internet boom also ushered in the rise of the Indian IT industry. During this period, companies like Infosys, Wipro, and HCL Technologies drove significant growth in the Indian economy.?

Present: A tale of growth and acceleration

Entrepreneurship has rallied considerably in India in the 21st century. This momentum is fueled by a confluence of economic growth, growing talent pool, increasing financing options and favorable policy changes. Introduction of initiatives such as Make in India has had tremendous impact in both tangible and intangible terms. While such initiatives have improved ease of doing business in India, they have also brought in a paradigm shift in psychosocial factors.

Armed with better education, accessible resources and growing markets, an average Indian citizen today has far more confidence in their entrepreneurial abilities than ever before. The precedent set by many new age entrepreneurs in the past two decades nicely sits as the cherry on top. With Indian enterprises now focusing on tapping into global trends with distinctly Indian products, we can be hopeful that India regains the top-spot it once held in global trade.