M1 - 01 - History of Indian Business

HISTORY
OF
INDIAN BUSINESS
https://www.youtube.com/watch?v=V2BrLi7EVAE
HISTORY OF INDIAN BUSINESS
• In the pre-independence era of India, the
high class farmers and artisans were
instrumental for boosting trade in India.
• In addition to the support that these

workers garnered from the Royals, the
perfection of their art and appeal brought
immense laurels to the Indian craftsman
industry in the past.
• But with the advent of the East India

Company, focus shifted to exporting raw
materials from India and importing
finished goods into the Indian markets.
• .
• In 1600, a group of English businessmen
asked Elizabeth I for a royal charter that
would let them voyage to the East Indies for
a monopoly on trade. The merchants put up
nearly 70,000 pounds of their own money to
finance the venture, and the East India
Company was born.
• The corporation relied on a factory system,
leaving representatives it called “factors”
behind to set up trading posts and allowing
them to source and negotiate for goods.
• Thanks to a treaty in 1613 with the Mughal
emperor Jahangir, it established its first
factory in Surat in what is now western
India.
• India was the world's main producer of cotton
textiles and had a substantial export trade to
Britain, as well as many other European countries,
via the East India Company.
• Over the years, the company shifted its A painting of a British East India Company official
attention from pepper and other spices to riding on an elephant at the end of the 18th century
• In the first wave of entrepreneurship, the textile
industry flourished extensively, dominated
primarily by the Parsi community.
• The Tata’s laid its foundation in 1868 under the

pioneering Indian industrialist Jamsetji
Nusserwanji Tata.
• He is regarded as “The Father of Indian

Industry”, a visionary entrepreneur who helped
pave the path to industrialisation in India by
seeding spearheading businesses in sectors
such as steel, energy, textiles and hospitality to
become one of the biggest conglomerate of all
times.
19 T H CENTURY
• The second wave of entrepreneurship which enhanced the quantum of trade picked
up after the First World War.
• By 1914, India had the third-largest railway network, the world’s largest jute
manufacturing industry, the fourth-largest cotton textile industry, the largest canal
system, and 2.5% of world trade.
• Between 1913 and 1938, our manufacturing output grew 5.6 % a year, well ahead of
the world average of 3.3%.
• Even, the worldwide Great Depression of 1929 had little direct impact on India, with
only slight impact on the modern secondary sector. However, the worst
consequences involved deflation, which increased the burden of the debt on villagers
while lowering the cost of living.
• By 1947, industry’s share doubled from 3.4% national output to 7.5%.
• This was a direct result of the Swadeshi campaign that emphasized on the use of
indigenous goods.
• This coupled with the emergence of the Managing Agency System in 1936 aggravated
the growth of start-ups in the country. In April 1970, the managing agency system
was finally abolished by the Indira Gandhi government. But much before that, by the
INDIA BUSINESS FROM 1947 TO 1991
• On the midnight of August 15, 1947, when Pandit
Nehru announced the freedom of India, a feeling
of euphoria traversed across the country. People
were looking forward to development and
growth within their lives and their country.
• Five year plans were introduced in 1951, with the

first five year plan (1951-56) focusing on the
growth of the primary sector.
• The entrepreneurial role of the state was evoked

to develop the industrial sector during the
second five year plan.
• But development of India didn’t happen as

expected. We were not doing well as compared
to other South and South-East Asian countries.
• With nationalization of our banks in 1969 and the

passing of the Monopolies and Restrictive Trade
Practices (MRTP) Act of 1970, the license Raj
was further strengthened.
INDIA BUSINESS FROM 1947 TO 1991
• However, this was also a period when India
witnessed a surge of entrepreneurs who
established conglomerates like Aditya Birla
Group, Bajaj Scooters, Satyam Info way,
Reliance, Godrej, Ranbaxy, etc.
• Work was being done to strengthen the

financial well-being of the lower class and
measures were taken to liberalize the market
so that more players could come up in the
market.
• Yet, things were not happening as expected

and even the government could not provide
enough support to raise the living standards of
the general public.
• Too many taxes, restrictions on the companies,

ban of international players in Indian markets
etc., became a hindrance towards the growth
of a giant country like India.
• Then, came the government headed by Mr.

INDIAN BUSINESS POST 1991
History of Indian Business

INDIAN BUSINESS POST 1991
• The economic reforms of 1990s were wide
ranging and were essentially based on the
trinity of liberalisation, privatisation and
globalisation.
• This was aimed at ending the licence-permit
raj by decreasing the government intervention
in the business, thereby pushing economic
growth through reforms. The policy opened up
the country to global economy. It discouraged
public sector monopoly and paved the way for
competition in the market.
• The policy, which met with wide opposition
from within the Congress and even the
domestic industry, was seen as the only way
out for India after the balance of payments
crisis that brought the country to its knees.
FLOW OF INDUSTRIAL ACTIVITIES POST
INDEPENDENCE
 1947: The Industrial Disputes Act, governing organized industrial labor, is passed.
 1949: The Reserve Bank of India (RBI), previously a shareholders’ bank, is nationalized.
 1953: Air India is nationalized.
 1956: Life insurance is nationalized, and the Life Insurance Corporation (LIC) established.
 1958: Dhirubhai Ambani establishes the Reliance Group as a trading house called Reliance Commercial
Corporation 1958:
 1958: The first Hindustan Ambassador car is produced.
 1967: The first commercials are aired on Vividh Bharati.
 1968: The Foreign Investment Board is established.
 1973: Coal mines and oil companies are nationalized.
 1973: The longest rail service in India, from Mangalore to Delhi, is inaugurated 1974.
 1977: Reliance Industries launches its initial public offering (IPO)
 1978: Housing Development Finance Corporation Ltd, or HDFC, the first specialized mortgage company in
INDEPENDENCE
 In 1980: India’s first credit card, Central Card, is introduced by the Central Bank of India
 1981: Infosys Ltd is incorporated by N.R. Narayana Murthy and six other co-founders.
 1982: Indian Oil Corporation commissions India’s first public sector petroleum refinery in Guwahati 1983:
 1983: The first batch of Maruti cars rolls out, priced at about Rs47,500 a piece.
 1987: India’s first debit card is introduced by Citi Bank, first ATM installed in Mumbai by HSBC.
 1992: Reliance Group becomes the first Indian conglomerate to raise money in international markets.
 1992: The Harshad Mehta scam roils markets but lays the path for tighter market regulation
 1993: Infosys launches an IPO.
 1995: Cellular phone services are inaugurated as West Bengal chief minister Jyoti Basu makes the first call
from Kolkata. 2006:
 2009:The Satyam scam erupts.
 2011: 2G scam is exposed.
 2017: Passage of the Goods and Service Tax Bill ushers in a uniform tax structure throughout the country.
INDEPENDENCE

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HISTORY

• In addition to the support that these

• But with the advent of the East India

• The Tata’s laid its foundation in 1868 under the

• He is regarded as “The Father of Indian

• Five year plans were introduced in 1951, with the

• The entrepreneurial role of the state was evoked

• But development of India didn’t happen as

• With nationalization of our banks in 1969 and the

• Work was being done to strengthen the

• Yet, things were not happening as expected

• Too many taxes, restrictions on the companies,

• Then, came the government headed by Mr.

History of Indian Business

 1953: Air India is nationalized.

 1958: The first Hindustan Ambassador car is produced.

 1967: The first commercials are aired on Vividh Bharati.

 1968: The Foreign Investment Board is established.

 1973: Coal mines and oil companies are nationalized.

 1977: Reliance Industries launches its initial public offering (IPO)

 1993: Infosys launches an IPO.

 2009:The Satyam scam erupts.

 2011: 2G scam is exposed.

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