ENTREPRENEURSHIP DURING PRE-INDEPENDENCE

sunandaC

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ENTREPRENEURSHIP DURING PRE-INDEPENDENCE


The evolution of the Indian entrepreneurship can be traced back to even as early as Rigveda, when metal handicrafts existed in the society. This would bring the point home that handicrafts entrepreneurship in India was as old as the human civilization itself, and was nurtured by the craftsman as a part of their duty towards the society. Before India came into contact with west, people were organized in a particular type of economic and social system of the village community. Then, the village community featured the economic scene in India. The Indian towns were mostly religious and aloof from the general life of country. The elaborated cast based diversion of workers consisted of farmers, artisans and religious priests. The majority of the artisans were treated as village servants. Such compact system of village community effectively protecting village artisans from the onslaughts of external competition was one of the important contributing factors to the absence of localization of industry in ancient India.

Evidently, organized industrial activity was observable among the India artisans in a few recognizable products in the cities of Banaras, Allahabad, Gaya, Puri & Mirzapur which were established on their river basins. Very possibly this was because the rivers served as a means of transportation facilities. These artisan industries flourished over the period because the Royal patronage was to them to support them. The workshops called ‘kharkhanas’ came into existence.

The craftsmen were brought into an association pronounced as ‘guild system’. On the whole, perfection in art, durability beyond doubt and appeal to the eye of the individual were the distinguishing qualities inherent in the Indian craftsmanship that brought much everlasting laurels of name and fame of the illustrious India in the past. To quote, Bengal enjoyed worldwide celebrity for Corah, Lucknow for chintzes, Ahmadabad for dupttas, and dhotis, Nagpur for silk boarded cloth, Kashmir for shawls and Banaras for metal wares. Thus, form the immemorial till the earlier years of the 18th century, India enjoyed the prestigious status of the queen of the international trade with the help of its handicrafts.

Unfortunately, so much prestigious Indian handicraft industry, which was basically a cottage and small sector, declined at the end of the 18th century for various reasons. These may be listed as-

1. Disappearance of the Indian royal courts who patronized the crafts earlier.
2. The lukewarm attitude of the British colonial govt. towards the Indian crafts.
3. Imposition of heavy duties on the imports of the Indian goods in England.
4. Low priced British made goods produce on large scale which reduced the competing capacity of the product of the Indian handicrafts.
5. Development of transport in Indian facilitating the easy access of British product even to far-flung remote part of the country.
6. Changes in the tastes and habits of the Indian, developing craziness of foreign products.
7. Unwillingness of the Indian craftsmen to adapt to the changing tastes and needs of the people.

Some scholars hold the view that manufacturing entrepreneurship in India emerged as the latent and manifest consequence of east India company advent in India. The company injected various changes in the Indian economy through export of raw materials and import of finished goods in India. Particularly, the parsis established good rapport with the company and were much influenced by the company’s commercial operations. The company established its first ship building industry in Surat where from 1673 onwards the parsis built vassals for the company. The most important was shipwright Lowjee Nushirvan, who migrated to Bombay around 1935. He belonged to a Wadia family which gave birth to many leading ship-builders of Bombay. In 1677, Manjee Dhanjee was given a contact for building the first large gun powder mill in Bombay for the east-India company. Besides, a Parsi foreman of a gun factory belonging to the company established a steel industry in Bombay in 1852. On the basis of these facts, it can be stated that the east India company made some contribution towards entrepreneurial growth in India. But whether the company did it deliberately for the growth of entrepreneurship in India or it was just a coincident that people came in contact with the company and entered the manufacturing, nothing can be said with certitude.

The actual emergenced of manufacturing entrepreneurship can be noticed in the second half of the 19th century. Prior to 1850, some stay failure attempts were, indeed , made by the Europeans to setup factories in India. In the beginning, the Parsis were the founder manufacturing entrepreneurs in India.

Ranchodlal chotalal, a Nagar Brahman, was the first Indian to think of setting up the textile manufacturing on the modern factory lines in 1847, but failed. In his second attempt, he succeeded in setting up a textile mill in 1861 at Ahmadabad. But before this, the first cotton textile manufacturing unit was already setup by a Parsi, Cowasjee Nanabhoy Dabar in Bombay in 1854 fallowed by Nawrosjee wadia who open his textile mill in Bombay in 1880. The credit for the expansion of textile industries upto 1915 goes to the Parsis. Out of 96 textile mills existing in 1915, 43% (41) were set up by parsis, 24% (23) by Hindus, 10% (10) By Muslims and 23% (22) by British citizens. Later, the Parsis invaded other fields, mainly iron and steel industry, also Jamshedjee Tata was the first Parsi entrepreneur who established the first steel industry in Jamshedpur in 1911.

In the first wave of manufacturing entrepreneurship, except parsis, all others hailed from non-commercial communities. Why the well-known commercial communities, namely, Jains and Vaishyas of Ahmadabad and Baroda, lagged behind in entrepreneurial initiative throughout the nineteenth century can be explained by two factors. Firstly, the improvement of business climate in the countryside during this period results in an increase in the quantum of trade which assumed quick returns on investments. This proves the commercial activity more lucrative during the period, Secondly; it can also be attribute to their conservative attitude to change from commercial entrepreneurship to industrial entrepreneurship.

The Swadeshi campaign, i.e., emphasis on indigenous goods, provided, indeed, a proper seedbed for inculcating and developing nationalism in the country. It was the influence of Swadeshi that Jamshedji Tata even named his first mill 'Swadeshi Mill'. The spirit of indigenousness strengthened its roots so much in the country that the Krishna Mills in its advertisement of Tribune of April 13 made the following appeal: "Our concern is financed by native capital and is under native management throughout"."

The second wave of entrepreneurial growth in India began after the First World War. For various reasons, the Indian Government agreed to 'discriminating' protection to certain industries, even requiring that companies receiving its benefits should be registered in India with rupee capital and have a proportion of their directors as Indians. The advantages of these measures were mostly enjoyed by the Indians. The Europeans failed to harness the protectionist policies to their interests." These measures helped in establishing and extending the factory manufacturing in India during the first four decades of the twentieth century. During these decades, the relative importance of Parsis declined and Gujaratis and Marwari Vaishyas gained that pendulum in India's entrepreneurial scene.

The emergence of Managing Agency System which made its own contribution to the Indian entrepreneurship can be traced back to 1936 when Carr, Tagore & Co. assumed the management of Calcutta Steam Tug Association. The credit for this initiation goes to an Indian, Dwarkanath Tagore, who encouraged others to form joint-stock companies and invented a distinct method of management in which management remained in the hands of the 'firm' rather than of an 'individual' . Historical evidences also do confirm that after the East India Company lost monopoly in 1813, the European Managing Agency Houses entered business, trade and banking. And, these houses markedly influenced eastern India's Industrial scene. It is stated that the Managing Agency Houses were the real entrepreneur for that period particularly in Eastern India. Brimmer" holds the opinion that Agency Houses emerged to overcome the limitations imposed by a shortage of venture capital and entrepreneurial acumen though all may not agree squarely with this view.
 
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