Prosperous India-14

Higher levels of entrepreneurship

Many of us have a feeling that our people are generally lazy and so there is not much entrepreneurship in the country. We tend to believe that the concept of ‘contentment’ taught to us in the Indian way of life, has obstructed all the initiatives and remained a stumbling block for development. But this is not true. This is one among the many wrong interpretations of Indian life made by the Europeans in order to justify their colonial dominance and suppress the native minds.
Unfortunately this interpretation continues to dominate our thinking even today, as we still do not have a proper understanding of our functioning systems. The large scale poverty, poor standards of living and poorer rates of growth during the British period and the consequent underdevelopment during the time of independence are taken to show that Indians lack the necessary drive to undertake new initiatives. The moderate rates of growth achieved during the initial decades after independence are used to support their argument, little realizing that the country had to start from a very poor base and the people had to struggle against the socialistic framework during those years.
India is an ancient nation. An objective study of her economic history would show that the country remained the most prosperous region in the world for most of the time, till the aliens started interfering in the native ways of lives of people. The country would not have reached such an exalted position without higher levels of enterprising qualities and newer initiatives of the population. So entrepreneurship is not something new to the Indian society and it must have dominated the lives of the people so much so that it remained superior for a very long period compared to any other nation in the world. India was in fact made poor and underdeveloped during the British period.
Studies on Indian economy during the post-independence period reveal that there has been a continuous growth in enterprises during the past sixty years. But what is significant about this growth is that it has not been confined to any particular segment. All sorts of enterprises – tiny, small, medium and big - have been coming up in thousands every year. It only indicates that different sections of people are engaged in entrepreneurial activities and entrepreneurship is not confined to any particular section of the society. As a result, the Indian Brand Equity Foundation notes that India has emerged as a country with 85 million entrepreneurs, perhaps the largest number in the world.
The innate qualities of Indians namely the family orientation, frugal ways of life, tendency to submit to hard work, saving mentality and taking on the burdens and the risks attached for the betterment of the others around motivate them to set up new ventures, even under extremely difficult conditions. We have to remember that the Indian life emphasizes specific duties for everyone and ‘karma yoga’ is considered the best way to lead a purposeful existence. Mahabharata exhorts people to work without expecting results, as being engaged in work is one’s foremost duty. As a result the Indian mind has been conditioned to engage in one or the other productive activities.
The data relating to the different sectors of the economy namely the unorganized sector, small scale industries sector and the corporate sector over all these years testify the growth of enterprises. Let us take for example, the unorganized sector where the people from the ordinary and less privileged sections of the society operate by promoting tiny and smaller enterprises. Economic Census 2005 notes that this sector has grown at the rate of 4.69 per cent per year during 1998-2005, reaching thereby a total of about 41.83 million establishments. The growth of bigger units coming under the corporate sector has been particularly impressive during the recent decades, with the total number of companies limited by shares at work touching 7,86,774 at the end of March 2009. The growth in the case of small and medium enterprises over the past six decades is noteworthy, though sections of these groups have been facing difficulties in the recent years due to government policies and other issues.
Field level studies in different business and industrial centres show that there remains an extraordinary sense of entrepreneurship in many places across the country. For example, Sivakasi situated in southern Tamil Nadu was a small place during the beginning of the 1920s, with people depending on agriculture based on salty water. Two enterprising youngsters, from ordinary agricultural families, promoted the first match factory in the place after learning about the business while working in a company owned by the British in the then city of Calcutta.
But today after about nine decades, Sivakasi is a household name in India and is familiar in many places abroad. The locals proudly note that about 90 per cent of the total cracker manufacture from India and about 80 per cent of the Indian match production take place through Sivakasi. They also claim that about 40 per cent of the sophisticated off-set printing in India takes place there. It is interesting to note that the highest priced diary in the world released in the US was from Sivakasi. Sivakasi entrepreneurs also print cheque books and items of high security such as flight tickets for countries from Europe. What started off as a small venture has transformed Sivakasi into a vibrant business centre, leading to transactions worth crores of rupees and giving livelihood to thousands of families. All this has happened due to the entrepreneurial urge of the native people without much support from the government and other outside agencies.
The growth of the industrial and business centres across the country, be it Rajkot or Karur or Ludhiana or Coimbatore, exhibits a similar pattern. The development of these places has been powered by the entrepreneurial spirit of their people. As a result businesses have expanded and the economy has grown. In the process, some of these places such as Surat and Tirupur have become synonymous with their products throughout the world.
Based on surveys conducted in different countries, Global Entrepreneurship Monitor (GEM) 2002 noted that India was the second most entrepreneurial nation in the world with 17.9 per cent of the population engaged in various entrepreneurial activities. The two most powerful economies of the world namely, the US and China were way below India with 12.3 per cent and 10.5 per cent respectively.
Thus India has moved from a predominantly agricultural economy, to an economy with significant service and industrial activities, mainly due to the initiatives of the people with higher levels of entrepreneurship. It is they who make the economy move forward, in spite of lack of clarity at the policy making levels. Their extraordinary abilities have to be seen to be believed.
1. Annual Report 2008-09, Ministry of Corporate Affairs, Govt. of India
2. Economic Census 2005, Ministry of Finance, Govt. of India
3. Global Entrepreneurship Monitor 2002 Summary Report, Babson College, Ewing Marion Kauffman Foundation and London Business School
4. India Brand Equity Foundation, ‘Hinterland India: The Real Source of India’s Entrepreneurship’,
5. Kanagasabapathi P. and Gopalasamy R. ‘A Study on Supply Chain Practices and Performances in the Printing Industry of Sivakasi’, Unpublished Report, P.S.G.Collge of Technology, Coimbatore, 2006