From Pre-British period till Independence

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Evolution of Business Environment in India

• From Pre-British period till Independence

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CASTE SYSTEM IN INDIA

• The caste system developed in India over 3,000
  years ago.
• There are four caste corresponding to their
  profession and occupation
• Brahmins (Priests)
• Kshatriya (Warrior)
• Vaishya (Merchants)
• Shudra (Scheduled castes)
• Each caste had its own specific occupation.
• The occupation system in the pre -British era was
  almost hereditary.
• Individual talent , aptitude , enterprising
  skills and abilities were accordingly groomed
  rights from their births.

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Joint Hindu Family Business/ Hindu Undivided
Family (HUF)

• This type of business prevails only in India.
• It is according to prevailing Hindu law.
• The elder member of the family is known as the
  Karta.
• It is male dominated family business.
• It is carried on from generation to generation.
• Features of HUF
• Karta
• Co-parceners
• Liability
• Management
• Inheritance
• Legal aspects
• Womens rights
• Membership

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Introduction

• Evolution of business refers to origin and growth
  of business activities over a period of time.
• Business activities started since the days of
  early civilization around 5000 B.C.
• Exchanges of goods for goods is known as Barter
  System.
• Barter System cannot be called business because
  there was no intention of making profits.
• Actual business started from the time of Indus
  valley civilization.

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Indus Valley Civilization (3300 BC to 1700 BC)

• The first known civilization is the is the Indus
  valley civilization from where the roots of
  business actually started.
• Its citizens practiced agriculture, domesticated
  animals, made sharp tools and weapons from
  copper, bronze and tin and traded with other
  cities.
• Agriculture was the predominant occupation of the
  populace and satisfied a village's food
  requirements besides providing raw materials for
  hand based industries like textile, food
  processing and crafts.
• Besides farmers, other classes of people were
  barbers, carpenters, doctors (Ayurvedic
  practitioners), goldsmiths, weavers etc.

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Indus Valley Civilization (3300 BC to 1700 BC)

• Evidence of well laid streets, layouts, drainage
  system and water supply in the valley's major
  cities, Harappa, Mohenjo-Daro etc. reveals their
  knowledge of urban planning.
• Religion, especially Hinduism, played an
  influential role in shaping economic activities.
  The caste system restricted people from changing
  one's occupation and aspiring to an upper caste's
  lifestyle. Thus, a barber could not become a
  goldsmith and even a highly skilled carpenter
  could not aspire to the lifestyle or privileges
  enjoyed by a Kshatriya (person of a warrior
  class). This barrier to mobility on labor
  restricted economic prosperity to a few castes.
• In the joint family system, members of a family
  pooled their resources to maintain the family and
  invest in business ventures. The system ensured
  younger members were trained and employed in the
  family business and the older and disabled
  persons would be supported by the family.

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Maurya Empire (321 BC to 185 BC)

• During the Maurya Empire, there were a number
  of important changes and developments to the
  Indian economy.
• It was the first time most of India was
  unified under one ruler.
• With an empire in place, the trade routes
  throughout India became more secure thereby
  reducing the risk associated with the
  transportation of goods. The empire spent
  considerable resources building roads and
  maintaining them throughout India.
• The improved infrastructure combined with
  increased security, greater uniformity in
  measurements, and increasing usage of coins as
  currency enhanced trade.

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Maurya Empire (321 BC to 185 BC)

• During this time, the Arthasastra ("science
  of the state") was written by the Chanakya, an
  adviser to Chandragupta Maurya. The Arthasastra
  is one of the most important ancient texts on
  economics, politics and administration. It was a
  treatise on how to maintain and expand power,
  obtain material gain, and administer an empire.
  It covers both theory and implementation and
  contains many clear and detailed rules regarding
  the governing of an empire.
• Surplus of Indian manufactures, like shawls
  of Kashmir, steel and iron works, silk, and other
  textiles and handicrafts, agricultural products
  like pepper, cinnamon etc. were exported to
  Europe, the Middle East and South East Asia in
  return for gold and silver.

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The Islamic Sultanates (1206 to 1596)

• During this period, India was the richest
  classical civilization, with a flourishing
  international trade and the only known diamond
  mines in the world.
• Muslim trading communities arrived in Kerala from
  the Arabian peninsula, through trade links via
  the Indian Ocean and they settled throughout the
  coastal South India.
• Organized Banking started in India. Hundis
  (traditional form of bills of Exchange) were
  widely used in trade.
• Important centres of trade and industry like
  Delhi, Lahore, Bombay, Ahmedabad etc. were
  developed with large population residing in these
  areas.

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The Islamic Sultanates (1206 to 1596)

• Items of export consisted of silk, gold
  embroidered silk caps, finely designed clay pots
  and pans, guns, knives, scissors, sugar, oil,
  ivory, sandalwood, spices, diamonds and other
  precious gems.
• Items of import consisted of horses from Kabul
  Arabia, dry fruits and precious stones.
• India enjoyed a favorable Balance of Trade
  position.
• Ship building industry was developed in coastal
  towns.

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The Mughal Era (1525 to 1725)

• In 1526, Babur, a Turco-persian came from the
  Khyber Pass and established the Mughal Empire in
  India which lasted for over 200 years.
• During this period, Mughal India was the second
  largest economy in the world.
• The annual revenue of Emperor Akbar's treasury in
  the year 1600 is estimated at 17.5 million, in
  contrast to the entire treasury of Great Britain
  in 1800, which totalled 16 million.
• In 1617 emperor Jehangir granted permission to
  East India company to trade in India. Over a
  period of time the East India company with its
  influence got permits from Mughal emperor Farukh
  Siyar for duty free trade in Bengal in 1717.

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The Mughal Era (1525 to 1725)

• During emperor Aurangzebs tenure India became
  the worlds largest economy. Uniform customs and
  tax administrations was started throughout the
  kingdom.
• During this period Malabar on the western coast
  of India became a important centre for foreign
  trade.
• The items of exports comprised of textile
  fabrics, jewels, embroideries, woven and silk
  manufacturers, pepper and a few spices.
• Items of import consisted of gold, horses, metals
  such as copper, tin, zinc, lead, silver, amber
  and precious stones.
• Agriculture was the main occupation of the people
  in the country.

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Marathas Empire (1750 to 1818)

• During 1750 to 1775 the Maratha empire expanded
  to almost 34 of the Indian landscape.
• The Marathas adopted the tax administration
  system.
• Different Maharajas were fighting among
  themselves.
• Slowly East India company conquered almost the
  whole of India.

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Pre- British India

• Before the advent of the Britishers Indian
  economy was like a Golden Bird.
• It was an independent economy with its trade
  relations extending as far as Arabic nations and
  Rome.
• The Indian economy was divided into province and
  kingdoms.
• The village community and the subjects handed
  over every year to the ruler or to his nominee a
  share of the years produce.
• India was one of the most advanced countries of
  the world upto 18th century.

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British Rule in India

• The Britishers entered India as traders through
  the route of East India Company and they ruled
  over India.
• The land revenue system imposed by the Britishers
  looted the cultivators.
• By the 1850s, the East India Company controlled
  most of the Indian sub-continent, which included
  present-day Pakistan and Bangladesh.
• Their policy was summed up as Divide and Rule,
  taking advantage of the enmity festering between
  various princely states and social and religious
  groups.
• The Indian Industries were destroyed. Raw
  materials from India was
• exported to England and finished products from
  England was imported to India and sold in Indian
  markets.

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British Rule in India

• Along with the Britishers, French and Dutch
  people also started developing their colonies in
  India in places such as Goa, Pondicherry, etc.
• Britishers bribed the kings and the Emperors and
  illegally exercised control on their kingdoms.
• India was officially a British colony and was
  divided into three administrative zones
• Bengal
• Madras
• Bombay

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(1) 1757 to the end of the 18th century the
Mercantilist phase

• The artisans were charged high prices for the raw
  materials and the prices of the finished goods
  were also dictated.
• The economic plunder took place in 3 main forms-
• Profit from oppressive land revenue policy,
• Profit from monopolist trade,
• Extractions made by the East India companys
  official.
• There was drain of wealth from India to England
  from 1883-1892 of Rs. 30 to Rs. 40 crore per
  annum as per the study made by Shri. Dadabhai
  Nowroji in 1897.

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(2) During the 19th century Period of
Industrial Capital developed.

• With the advent of Industrial Revolution in
  England many textile industries developed over
  there.
• India was made the suppliers of raw materials for
  the fast growing textile industries in England,
• Indian industries were destroyed and artisans
  were converted to the status of unemployed
  people.
• People were forced to take up agriculture for
  their living.
• British looted farmers and cultivators by
  imposing heavy land revenue system.

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(3)From Closing decade of 19th Century to 1947
Finance Capitalism

• The British capitalist retained a dominant
  control over banking systems and commerce in
  India.
• The capital investment was undertaken by the
  Britishers in two main forms
• Through Direct private foreign investment in
  India in coal and mining companies, jute mills,
  tea, coffee rubber plantations sugar.
• By ways of loans raised by the secretary of State
  in England on behalf of Indian government and by
  semi- public organizations for investment in
  railways, ports, irrigation, electricity and
  other sectors.

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CONCLUSION

• If the history of British rule in India was to be
  condensed to a single fact, it is this India was
  reduced to a status of feeder economy for
  Britains rapidly growing industrial sector.
• India was looted and converted from riches to
  rags with poverty, illiteracy, unemployment,
  diseases, famines, war, riots and internal
  conflicts etc. before Britishers finally left
  India in 1947.

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Evolution of Business Environment in India from
Independence till Globalization and
Liberalization.
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MAJOR DEVELOPMENTS IN INDIAS BUSINESS
ENVIRONMENT SINCE INDEPENDENCE TILL 1964. (Nehru
Period)
INTRODUCTION

• The pre-independence period was a period of
  stagnation for the Indian economy.

• Indian economy was rural and agricultural.

• 85 of people lived in village.

• 84 of the people were illiterate.

• Governments main aim was to make an economic
  policy.

• Partition of India and Pakistan took place.

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• India got 91 of the total number of industries
  with Mineral Resources and Agricultural Raw
  materials.

• Industries that were developed in India were
  iron, steel, jute and paper.

• Employees State Insurance Corporation was
  established with other employee welfare laws in
  October 1948.

• The factories act of 1948, Minimum wages act of
  1948, The Employees Provident Fund Act of 1952
  was passed.

• On 26th January, 1950 the Constitution of
  Republic India came into force.

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• First five year plan was launched in April 1951.

• The bad condition of economy after Nehrus term,
  forced Indians to take foreign help.

• In 1956, The Companies Act was passed.
• Trade Merchandise Marks Act was passed in 1958.

• Second five year plan was launched in 1956.

• Third five year plan was introduced in 1961.

• In 1951, Government passed Industries
  Development Regulation Act, Tariff Commission
  Act.

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MAJOR DEVELOPMENTS IN INDIAS BUSINESS
ENVIRONMENT DURING INDIRA GANDHI PERIOD.

• Indira Gandhi became the Prime Minister Of India.

• Fourth five year plan was launched in 1969.

• The Monopolies and Restrictive Trade Practices
  Act (MRTP) was passed in 1969.

• Foreign Exchange Regulation Act (FERA) was
  passed in 1973.

• Control of prices.

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• Urban consumers, agriculturists and organized
  sector employees got relief due to no increase
  in the prices of goods.

• Fifth five year plan was launched in 1974.

• The Mini- Plant fetish.

• Indigenous availability and Essentiality.

• 1/5th of the population was urban in 1995.

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DEVELOPMENTS IN INDIAS BUSINESS ENVIRONMENT
DURING RAJIV GANDHI PERIOD TILL
LIBERALIZATION AND GLOBALIZATION.

• Rajiv Gandhi took over as Prime Minister in 1984.

• Policy liberalizations began to be introduced.

• Reduction in price controls and reduced
  corporate taxes.

• Decline in foreign exchange.

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• Economic crisis occurred.

• New Industrial policy, 1991.

• The World Trade Organisation was established on
  1st January 1995.

• Since 1991 India has emerge as one of the
  wealthiest (rich) economies in the developing
  world.

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GLOBALISATION.
DEFINITION Globalisation may be defined as the
process of integrating (combine) a countrys
economy with the world economy, with a view to
take benefit of the global opportunities for the
countrys growth and development.
CHARACTERISTICS OF GLOBALISATION

• Large scale production and marketing.

• Inter-linking of economies of countries.

• Competition

• Interdependence of countries.

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GLOBALISATION.
CHARACTERISTICS OF GLOBALISATION

• Benefits to participating countries
• Competition
• Domination (influence) of multi-national
  corporations and developed countries
• Transfer of capital and technology
• Acquisitions and Mergers
• International Restrictions
• Participation of global agencies
• Trading Blocs

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