Emergence of Entrepreneurial Class in India

Emergence of Entrepreneurial Class in India

Emergence of Entrepreneurial Class in India

Emergence of entrepreneurial class can be easily understood with reference to the history of industrial development in India on the one hand and emergence of various other factors. History of industrial development can be broadly into the following periods:

  1. Handicraft Stage:

    This was the first stage of emergence of entrepreneurs. Its period dates back from time immemorial to the beginning of the 18th century. Under this system entrepreneurs were called artisans lived in villages. They produced goods for local consumption. Methods of production were very crude and simple. These were labour intensive techniques and as such did not require much capital. The business was also not risky as the goods were produced to meet the local demand which could be ascertained easily. The production was also not innovative as the artisans produced goods of daily use i.e., necessities of life. The handicraft industries flourished due to the patronization by the Kings and Maharajas.

  2. Guild System:

    The guilds system was the second stage of emergence of entrepreneurs in India. The system was not much different from the handicraft system. The only difference was that the artisans formed associations called guilds to protect and promote their interests. These guilds were formed on the lines of merchant guilds i.e., association of merchants. Later on separate guilds were formed by the artisans for different crafts or trades such as weaver guild, feather workers guilds. These guilds regulated the quality and skill of the members. The guilds were also required by local laws to appoint officials to inspect the quality of the goods produced by the members of the guilds.

These craft guilds helped the members in training and professional development. Beside these guilds also restricted the entry of new members. The regulations made by the guilds were enforced by the wardens appointed by the Mayor of the town. Indian handicrafts were known for their quality, design and reputation all over the world. Aligarh’s locks, Meerut’s scissors, Dhaka’s Muslin. It is remarked (said) that a dhoti of Muslin could pass through a finger ring. Banarasi sarees and Moradabad’s metal wares were also well known. These handicrafts were the products manufactured by cottage and small scale industry.

With the onset of the last decade of the 18th century the Indian handicrafts industry declined rapidly. The important reasons for their decline included:

  • The decline of Maharajas who usually patronized these handicrafts.
  • Discriminatory freight policies of the British Colonial Government e.g., low railway freight on raw materials from up country towns to part towns and vice versa.
  • Low railway fights on finished goods from port towns to up country towns and vice versa to promote British industries at home.
  • Imposition of heavy duties on the goods imported by British buyers.
  • Decline of international trade in the 17th and 18th centuries.
  • Increasing competition from machine made goods of British industries.
  • Emergence of industrial revolution.
  1. Pre-Independence Period:

    Entrepreneurial development in India in the pre-independence period was a matter of accident and design. With the advent of the East India Company there was a redical change in the Indian economy which enjoyed monopoly of trade between India and England. The East India Company exploited the natural resources of the country. It treated India as a supplier of raw materials to feed the British industries and a market place for the sale of finished goods produced by the British industries. To promote British industries it adopted discriminatory freight policy so that raw materials could be exported to England at cheaper rates and finished products could be imported at cheaper rates so that their total cost of production cold be low to compete with costly goods produced by the Indian handicraft and small scale sector.

The East India Company with a few Parsi families started the ship building industry in the then state of Bombay. A few Parsi families like, Tatas in Steel, Wadias in Ship Building, made a humble beginning. The Parsis played a leading role. Cowasji Davar, established the first cotton textile mill in 1854 in Bombay. It was followed by another cotton textile mill established in 1880, that too by a Parsi. Nowrosji Wadia Birlas started the first Jute mill in 1919 in Calcutta. In the beginning of the 19th century somewhere around 1813 the monopoly of the East India Company was abolished. Therefore, most of the industrial units were started in collaboration with British Anaging Agents who played the role of promoters, financiers and managers of these undertakings.

  1. Post Independence Period:

    World War-II ended in 1945 but it had caused heavy destruction all over the world. Reconstruction work after war, needed cement, steel and other infrastructural facilities for rebuilding activities. It gave fillip to the emergence of new class of entrepreneurs. India’s Independence in 1947 gave further impetus to the Indian industries. The Swadeshi movement accelerated the tempo of industrial activities headed mostly by indigenous entrepreneurs. A large number of entrepreneurs emerged on the Indian industrial scene in the form of managing agents They started promoting, financing and managing industrial undertakings, notably among them were Tatas, Birlas and Dalmias.

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