Entrepreneurship in India–Evolution and Transformation

Introduction

The evolution and transformation of entrepreneurship in India began in the early times when the ‘Barter System’ was a common means of exchange. However, before going forward with evolution, let’s understand what entrepreneurship is. Entrepreneurs are those individuals or groups that produce new business and employment opportunities and, at the same time, bear the risks of the business. Entrepreneurship is the ability of the entrepreneur to drive and operate the business with goal-oriented objectives. In this article, we will focus on the following specific areas.

  • Evolution of Entrepreneurship in India and their classification at the various ages.
  • How the Entrepreneurship in India transformed into a greater sector.
  • Detailed analysis of all these topics.
Entrepreneurship in India
May 11, 2022
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Table of Contents

Evolution of Entrepreneurship in India

Medieval Age

To discuss the evolution or growth of entrepreneurship in India, you should understand that India has the oldest and most civilized trade history. During the Harappan Civilizations around 2700 BC, there was an internal and external trade culture. Also, due to this, most foreign counties recognize Indian entrepreneurial skills. Moreover, the boost in trade occurred during the era of the Mughal Regimes. The popularity of Indian products generally, art, crafts, Vedic tools, foods, and more got the deserved attention from different parts of the world. The mainland of Arabs, Western Colonial Counties, and African Countries were the major parties involved in the trade.

In the same timeline, various counties like the UK, France, and Portugal expanded their colonies in different parts of the world. However, the major entrepreneurial change was when East India Company started their business from the Bay of Bengal and later captured some Bengal parts. This indirectly connected the whole Indian state in a trade ecosystem. There were some major negative aspects of the England Colonial mindset. However, it also played some good aspects in the evolution of Entrepreneurship in India. The medieval age in India ends here.

Modern and Pre—Independence

This was the age of industrialization in India, where some of the best entrepreneurs of India rose to the opportunity. In the 19th century, the British had a major role in the country’s internal politics. Moreover, it was also creating hurdles in giving rise to National Development. But due to some of the major big events and industrial development, there was a bit of confidence in modern entrepreneurial activities. The major events are as follows.

  • The first Cotton textile mill by an Indian entrepreneur, Cowasji Dowar, in the year 1854 was revolutionary. It was one of India’s boldest steps in the modern evolution of entrepreneurship development.
  • Jamsetji Tata set up the company Tata Group in the year 1868. With the foundation of Tata Group, he has created a bar for entrepreneurship development in India.
  • 1874 Cotton Mill by JRD Tata, TISCO by Dorabji Tata, 1932 Tata Airlines, Tata Steel Plant, and more were high-rate businesses in India. Also, it has played a major role in various independence initiatives too.
Entrepreneurship Details
1888 Kirloskar Group Lakshman Rao Kirloskar founded it

Working as a sole Indian company in the energy business

1919 Birla Group Birla sets the first and foremost jute Mill in Calcutta.
1932 Bajaj Group Jarnanalal Bajaj’s first automobile company in India
1945 TELOC and Wipro were also set up by the time

Post-Independence

Entrepreneurship in India, along with the national economy, was ground-dwelling post-independence. There was not much left in the Indian economy at that time. Moreover, India had an interim British Government alongside the Indian parliament as per the treaty. Also, it was active in internal politics and became a hurdle in full pace development. However, the government was able to overcome the situation. Some of the major steps to support the growth of India are as follows.

  • PM Nehru adopted the Soviet Union’s economic structure line. However, it was not a great success, but it played a major push for the new Industrial Policy of 1956. Similarly, this policy liberalised the bar and standards set up by the British government, which was the ultimate hurdle in industrial development.
  • Economic reforms were done at the initial stage of governance. Also, the major economist adopted the Mahalanobis model, which has the prime objective of supporting entrepreneurs.

As all these impactful policies were in action, some major industries, unlike traditional textile and natural resources industries, were set up. Some of the emerging scopes of entrepreneurship at that time are as follows.

Date Entrepreneurship Development in India
1957 AMUL was the first-ever dairy-based company founded in India

It was in Anand, Gujarat, and under the shadow of Dr Verghese Kurien

1966 Dhirubhai Ambani set up the reliance Textile Industries
1955 The formation of SBI with the government bodies emerged as the top bank in India.

Evolution of Entrepreneurship in India: Final Thoughts

From Post Independence, there was a rough growth in entrepreneurship in India. However, it may seem that most of the top entrepreneurs were already in business. But the reality was a bit different. The economic policies were not supporting the entrepreneurs much, due to which there was rough growth. However, the transformation of entrepreneurship began in 1990, which we will discuss.

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Transformation of Entrepreneurship in India

The above is all about the evolution, which continued until 1990. However, the major transformation of entrepreneurship in India began with the ‘Economic Policy Reform’ led by Dr Manmohan Singh. Moreover, the economic reform was very beneficial and most important at the time when the whole world was against our country. Furthermore, the policy was extended more in the reign of BJP led PM Modi. So you can easily classify the major transformation of Entrepreneurs in India by these two policies and events.

New Economic Policy

The New Economic Policy 1991, bought by Dr Manmohan Singh under the governance of P.V Narshimha Rao-led Congress, was a huge turning point. This policy has included three major aspects, which are as follows.

Aspects Role
Liberalization Providing some provisions in different parts of the industry

It boosts the private sector, including banks and the stock market

Privatization Disinvestment of Public Firms to reduce the burden

Promote the national entrepreneurs for good business

Globalization Welcoming FDIs, and FPI

Creating SEZ and Economic Corridor for foreign companies

These all were the most important roles of the major aspects included in the New Economic Policy. However, these all had played an important role in the growth of entrepreneurship in India. For example, from 1981 to 1991, Infosys had an average growth of less than $5 million. But after the implementation of the policy, the company has advocated an average growth of $6 Billion in the last 20 years. Some of the benefits that transformed it through this policy are as follows.

  • It provides a green signal to the private banks and non-Indian Banks to operate without disruption. Also, this was the sole reason for the huge circulation of money in the economy. And finally, it led to increased loans and supported the new entrepreneurs.
  • Due to the policy, foreign companies could find the best alternative to invest their money. This led to huge FDI and FPI in India and helped understand the new and advanced technology.
  • The emergence of India as a tech hub in the startup world where Indian tech guys were the best alternative for US, UK, France, and other country’s projects. Also, it even brought a revolution into the tech world.

Aftermath

Has the New Economic Policy served its purpose? So for this question, yes, it has served its purpose. Moreover, the major purpose was economic reform, but it has also served in the transformation of entrepreneurship. Before the policy, the entrepreneurship of India was based on the model of traditional industries, agricultural industries. However, after the policy came into action, major changes were seen in technology. There was the emergence of Infosys, TCS, Wipro, HCL, and more. Also, in automobiles, Maruti, Tata, Mahindra, Bajaj, and more were emerging. But this policy has a limitation because it is very supportive of big companies and does not provide chances for a small and new startup to land.

Startup Initiative

In 2016 Indian government, led by PM Modi, took some startup initiatives. This startup initiate has some major aspects which have the prime motto of providing and lending support for entrepreneurship development in India. Till the year 2015, startups in India were on a great scale. Moreover, India is also known as the ‘Poster Child of Emerging Market. Some of the major aspects of the startup initiatives of 2016 are as follows.

  • Ministry of MSME gets into action, supporting the small and micro startups and firms.
  • Make in India initiative allows entrepreneurship to remain in India and work on its development.
  • Niti Aayog scheme was introduced as well. It has the objective of developing skills and providing training for becoming a skilled resource.

In recent times, the new startup has cured at 12%. In the FYI 2021, about 15% of unicorn companies are from India-based Companies. Similarly, new innovators and potential entrepreneurs are assisting their businesses in the Indian market day by day. If you consider the growth of entrepreneurship from the year 1990, you will see a steep rise every year.

The current Indian entrepreneurship world is becoming a highly favourable market for any company to invest in. Also, most Indian companies have marked their potential in international business and showed the growth of entrepreneurship in India. However, among all other top startups and companies, the IT sector of India is on the boom. It alone handles the major chunk of the entrepreneur’s growth representing India.

Limitations

There were some negative aspects of the startup initiative as well. Since the unplanned introduction of GST and Demonetization, startups have faced difficulty. Also, there was an unfair practice to Indian companies in the FDIs where FDIs were mostly less taxable and had some special provisions. So it is a hurdle to market dominance.

Conclusion about Entrepreneurship in India

Entrepreneurship in India has been on a rough to the steep path. Also, it has seen the era of the most civilised and oldest trading to the dominance of the British. Moreover, post-independence, there was a terrible impact on it. However, with the policies and hard work, our country was able to overcome it in a time. Now with innovative minds, India is getting its dominance in the market. And there are going to be entrepreneurship opportunities in India.

Read More – India’s Top 10 Successful Entrepreneurs in India and Their Businesses

Frequently Asked Questions (FAQ) about Entrepreneurship in India

Q1. Which entrepreneur is the best in India?

Ans. There are many gems of entrepreneurs in India. However, some of the best entrepreneurs in India are as follows.

Entrepreneur Founding Company
Jamsetji Tata Tata Group
JRD Tata Air India
Dhirubhai Ambani Reliance
Narayana Murthy Infosys
Ghanshyam Das Birla Birla Group
Azim Premji Wipro
Shiv Nadar HCL
Ardeshir Godrej Godrej Group
Jarnanalal Bajaj Bajaj Group

Q2. Who is the youngest entrepreneur in India?

Ans. Ritesh Agarwal is the youngest entrepreneur in India. He is the co-founder and CEO of Oyo, a hotel Service Company. Moreover, he founded the company at a very young age, and it was a massive success in the Indian Market, too.

Q3. What is the status of entrepreneurship in India?

Ans. As per recent statistics, about 5% of Indian adults have already established their businesses. Moreover, 11% of the adults are somehow involved in the early entrepreneurial stage. So this shows the availability of adults in entrepreneurship in India. Moreover, there is a surge in involvement if you compare the recent year in terms of entrepreneurial activities.

Q4. Who is the no one entrepreneur in India?

Ans. In the business scene, Mukesh Ambani is the no one entrepreneur in India. He is the wealthiest person in India as well. However, according to humanitarian views, Ratan Tata is no one entrepreneur in India due to his great personality.

Q5. Can I become an entrepreneur?

Ans. Yes, you can become an entrepreneur, but you have to find the best innovative problem-solving idea. Then you can get into the business and work and become an entrepreneur. Also, some of the major steps involved in becoming an entrepreneur are.

  • Problem Identification
  • Research Market
  • Raise Funds
  • Explore Market
  • Start the Business

 

 

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