CAUSES OF SLOW GROWTH OF ENTREPRENEURSHIP IN INDIA

Entrepreneurship developed only in the beginning of the 19th century and though the base for industrialization had been laid a century ago. The following be the main reasons, which could be responsible for lack of initiative and entrepreneurial spirit among the Indians.

1. Caste System: - This decided occupation for members from each caste. The altitudes were restrictive and therefore there were no changes of accumulating wealth and promoting production.

2. Agriculture: - Agriculture was the main occupation. Farmers and cultivators were always in the clutches of the money lenders. The zamindars, nawabs and rajahs exploited the laborers. They spent money on enjoyment and luxury and never risked money in industry. Banking and commercial system was also absent so even if there were savings, they could not be utilized for productive use.

3. Educational System: - Talented young men were prepared to take white collared jobs or join government or professional services. Many were attracted towards politics. The result was that very few young men got attracted towards becoming efficient, industrialists, technicians, managers etc.

4. Colonial Rules: - The British rulers adopted discriminatory policy Rich

Indian businessman had special connections with foreign rulers and both satisfied their self interests. Even the few insurance and banking services catered to the needs of some rich Indian businessman, Britishers in India did also not encourage Industrialization.

5. Managing Agents: - There were just a handful of people who were known to be having managerial skills. On common basis, these agents would lend their skills to some top industries. Industrialists could not manage their own units. They were always at the mercy of the managing agents who filled their pockets with big chunks of the companies’ profits and took full advantage of Indian industrialists till the managing agency system was abolished in 1970.

6. Joint Family System: - Younger members of the family always depended on the Head who never gave any kind of independence or encouraged units other than family business ones. A number of young men were discouraged from diversifying from family business and doing something new and different.

7. Religious attitude: - Indians were very religious mi9nded. They gave more time to religion than to earning material wealth. Religion got priority over business. Some religions even condemned excess earnings and indulgence I in comforts. Industrial activity was, therefore, given secondary consideration by the religious Indians.

8. Mindset: - The mindset of the average Indian was never entrepreneurial. Our religious literature and epics told us to have patience and to keep on working without expecting the fruits of labor. This also killed the drive and desire to get into entrepreneurial activities.

9. Recognition by the society: - In earlier days, the heroes India were the social reformers and the politicians. Now it is the era of sportsmen, models and film stars. It is sad that successful or the struggling entrepreneurs have never been recognized as heroes. Entrepreneurial activity did not get due importance in the Indian society.

10. Family Background: - Empirical studies have shown that a good number of entrepreneurs come from families with industrial backgrounds. Unfortunately, only a few entrepreneurial communities in India made entrepreneurial contribution. These communities could also not make headway in the entrepreneurial field on account of the colonial rule, lack of infrastructure and other facilities. Entrepreneurship development could only take place after independence in India.

COMMUNITIES THAT PROMOTED ENTREPRENEURSHIP IN INDIA

1. THE PARSIS:

Parsis migrated from Persia in the century. They performed artisans, carpenters, weavers etc, in the 17th century. By 18th century, they became wellknown shipbuilders; they had set merchant houses in Bombay, Burma, China and London. Their chief overseas trade comprised of yarn and opium.

They acted as brokers for the European traders at Bombay and Surat. They were regarded as merchants and traders of repute. They emerged as the most prominent trading and financing community or Bombay and Gujarat. Parsees and Gujarat trading castes that controlled even foreign trade become the wealthiest Indian communities by the 19th century.

2. TRADERS FROMSOUTH INDIA:

The trading castes of South India were the chettis. They were dividing into various groups such as the Telugu komatia, the Tamil, Nattukottai Chettis, and Beri- Chettis etc. The Komatia were the chief traders not only in the Telugu districts but also in Mysore, Coimbatore, Canara and other places. The chief financiers are bankers of South India were the Nattukottai Chettis. Trading in drugs grain and cloth was done by the Beri-Chettis. In the early 19th century they were known to be respectable peddlers who traveled in caravans. The communities that traded had trade relations with South- East Asian countries like Burma, Ceylon, and Malaya, Singapore etc. The chettiars established connections with reputed Indian business firms and also made good investments in and property. They became important suppliers of rural credit. The Nattukottai Chettiars were a well- known business community in Burma. Their working funds invested abroad were mainly employed in Burma.

Trading was done by Syrian Christians called Nazrani Mappilas and Mohammedan merchants known as Moplahs on the West coast in South

India. The Nazrani Mappilas financed internal trading activities of Travancore and Cochin. Moplahs traded in Malabar and Canara. They shared the functions of trade with the koknies who conducted banking business in the country.

When the monopoly of the East India Company ended in 1857, a period of boom began for the Christians who prospered as merchants. They played the role of private bankers. The Syrian and Chaldean Christians were active in promoting Joint Stock Banks at the end of the 19th century.

3. THE MARWARI COMMUNITY:

This important and fairly developed business community came from Marwari in Rajasthan. The trading and money lending cases got tremendous development in Gujarat and Rajputana on account of the famous route from Gujarat ports to the historical center of the Great Mughal state.

Rajputana was torn by feudal strife during the first half of the 19th century. It was not the place for large scale trading and money lending operations. Though the local trade was good, it provided a limited scope for development. Trade remained fairly constant and it was because of this that investment crossed the borders of Rajputana. Trade spread in towns throughout the north, east and west of India, especially to the commercial centers of Bombay and Calcutta.

With the rise of British commerce, these traders gradually replaced the Bengalis who served as British agents in Calcutta. The Brahmins and the Kayasthas of Bengal who operated as the British agents started tuning their attention to investments in land. They even got into 9 professions and administrative services. But the Subarna Banika, a Bengal trading community filled the void created by such an occurrence. But Bengal soon became the center for political revolution. The Britishers both rulers and traders did not approve of this. Wherever possible, they tried to replace a Bengali by someone who proved to be more dependable. The Rajasthani traders tried to be more co-operative than the Bengali Commercial castes. It is because of this that the Bengali names in business are relatively un important and where they occur; they mostly represent the professional agent class and not the indigenous trading class.

 Besides the above trading, money- lending communities that could be regarded as the source of entrepreneurs in India. There were the Bhatia’s and Lohanas. These communities carried out local trade and were spread all over the country. The “Khatris’ a community that trade not only in Punjab but also in Afghanistan, Central Asia etc. has also been a source of entrepreneurs. In Maharashtra the contribution of Yajurvedi Brahmins and the Chitapavan Brahmans who took active part in trading, money lending ad indigenous banking cannot be forgotten.

FACTORS INFLUENCING ENTERPRENURESHIP

The emergence of entrepreneurs in a society depends upon closely interlinked social, religious, cultural, psychological, and political and economic factors.

v FAMILY TRADITION:

Individuals who for some reason, initiate, establish maintain and expand new enterprises generate entrepreneurship in society. It is observed that entrepreneurs grow in the tradition of their families and society and accept certain values and norms from these sources.

v RELIGIOUS, SOCIAL AND CULTURAL FACTORS:

Religious, social and cultural factors also influence the individual taking up an entrepreneurial career, in some countries there is religious and cultural belief that high profit is unethical. This type of belief inhibits growth of entrepreneurship.

v PSYCHOLOGICAL FACTORS:

The psychological factors like high need for achievement, determination of unique accomplishment, self confidence, creativity, vision, leadership etc, promote entrepreneurship among individuals. On the other hand psychological factors like security, conformity and compliance, need for affiliation etc restrict promotion of entrepreneurship.

v POLITICAL FACTORS:

The political and also the political stability of country influence the growth of entrepreneurship. The political system, which promotes free market, individual freedom and private enterprise, will promote entrepreneurship.

v ECONOMIC POLICIES:

The economic policies of the government and other financial institutions and the opportunities available in a society as a result of such policies play a crucial role in exerting direct influence on entrepreneurship. In view of the haphazard development of economic zones, Government is encouraging the entrepreneurs to establish their business in backward and tribal areas. This is primarily to arrest the migration of people from the villages to cities and to create employment opportunities locally. Government is promoting such development by giving incentives like tax holidays (both sales and income), subsidized power tariff, raw materials, transportation cost etc.