From the reassuring certainty of the five-year plans and liberalisation to the sweeping economic policies such as Make in India, Goods and Service Tax, Digital India and much more, the 75 years of independent India’s history have been marked by events that reveal a young nation in search of an effective development model.

As we celebrate Indian Independence from British colonial rule, let us delve into the history of Independent India’s business ecosystem and financial world and see which events shaped the course of our nation’s economy.

Highlights of business since Independence till date

Starting from 1947, the Central Legislative Assembly, a precursor to the contemporary Indian Parliament, enacted the Industrial Disputes Act to govern organised industrial labour. In 1949, the Reserve Bank of India – RBI- previously a shareholders’ bank, was nationalised and was made the central bank.

The year 1950 marked a genuinely Indian legislative era in which the Parliament made the laws. In 1950, the Planning Commission was constituted as a central planning body, and in 1951, the government presented the First Five-Year Plan. In this decade itself, in 1956, the Industrial Policy Resolution was passed by the Indian Parliament, marking the beginning of the Licence Raj.

West Bengal, India’s sixth largest state in terms of economic size, is emerging as a leading IT and electronics hub. Being the eastern hub of business and finance sector, the state primarily depends upon agriculture and medium-sized industry. Major industries are located in and around the state capital, Kolkata, mineral-rich areas and Haldia port region. The market of the state varies from tea, sugar, jute to chemicals and fertilizers, giving a wide scope of doing business in the sector.

West Bengal – Ease of Doing Business

There are around 10,000 factories registered in the state. The government has also opened a single window system, Silpa Sathi, to provide all facilitations and handholding support to the investors intending to start a business of operating a business in the state.

The West Bengal Government has brought various industry friendly policies to ensure ease of doing business in the state. Another such initiative is the Geographic Information System (GIS) mapping that has been recently announced by the state government.

What is the GIS Mapping Initiative?

As micro, small and medium enterprises (MSMEs) are the key sectors of West Bengal’s economy, the state government initiated a GIS mapping of the existing 570 MSME cluster. Over the past 10 years, the MSME sector has evolved into a crucial contributor to the state’s economy. Earlier there were only 30 MSME clusters. With the constant support of government in the form of facility centers, creating storage facilities and providing necessary machinery and infrastructure the number of MSME cluster has gone up to 570.

The initiative is to assess the availability of infrastructure and skill workers in these industrial facilities and help improve ease of doing business in the state.

Tourism and hospitality companies, including Airbnb, EaseMyTrip, OYO and Yatra, have jointly formed the Confederation of Hospitality, Technology and Tourism Industry (CHATT), an industry association to strengthen and support small businesses in the sector.

The Minister of Culture and Tourism, Prahlad Singh Patel, launched the association on 24th June 2021. The creation of the CHATT is a historic decision to promote the development of the local tourism industry and support primary partners, owners and agents associated with the sector. The organisation’s objective is to support the development of small businesses and technological advancements for tourism and hospitality enterprises.

The Start-Up India Seed Fund Scheme (SISFS) is an initiative by the Government of India to spur entrepreneurship across India via an extensive network of home-bred start-ups. With the devastation that the COVID-19 pandemic continues to cause, the need for Start-up India Seed Fund Scheme is more important today than ever.

India’s entrepreneurial community is formed by a large mix of MSMEs, emerging tech-driven businesses that are easing the traditional ways of doing companies and catalysts for start-ups that guide and aid entrepreneurs – the start-up incubators.

The Trade Receivables Discounting System (TReDS) is an MSME program that acquires trade accounts receivable from corporate funds and other buyers (including government agencies and public sector entities) to aid MSMEs. TReDS plans the establishment and implementation of the funding processes for MSMEs.

Small and medium-sized businesses have shallow profit margins and need to receive goods immediately to avoid a lack of money. In the absence of bargaining power on SMEs, their working capital is typically tied to commercial claims as they operate in an unorganised cycle of loans and services offered to business buyers. The goal of TReDS is simply to fight the loopholes in the system for small businesses.

In India, the government has launched a revised insolvency resolution strategy for small and medium-sized businesses. There are currently 7,00,000 companies in India that are officially classified as MSMEs. With the new Pre-Packaged Insolvency Resolution Process (PPIRP), most of these businesses will have a new insurance framework and benefit from this policy change.

The Food Safety and Standards Authority of India (FSSAI) issued a letter/notification/order/circular on January 7, 2021. This is a policy revision for the Auto Generation of FSSAI licenses as well as for the auto rejection of registration applications (case of non-response) and they wanted it to be implemented with immediate effect. 

What does this policy change imply?

This policy implies that if a food business has applied for license or registration renewal and if the authorities do not respond on time, said license/registration will be auto renewed. Essentially, FSSAI has resolved the timeline issues surrounding the renewal of licenses/registrations for food businesses. 

It also implies that when an applicant submits his application for renewal of his food license to the licensing authority, the latter has a time of 60 days during which they must renew the license. In case of inadequacy detected, they will need to notify the business owner within this time frame. Failure to do so will lead to the auto renewal of said license. However, in the case of a potential rejection, the query from the licensing authority and simultaneous response from the food business must take place within a time frame of 30 days, otherwise the application is auto rejected. 

For registrations, the time frame is 7 days. 

The main objective of the policy revision is to ensure auto generations and issuances do not occur since these applications will be deemed as ‘unattended by the food authority’ and will be considered as a negative mark for them. 

The Government urgently ordered all liquid oxygen stocks in the country to be redirected to them. India is currently suffering from an acute shortage of the most vital naturally, abundant gas in the atmosphere which we cannot breathe without. 

The Ministry of Home Affairs communicated to all the States and Union Territories about no industrial exception being allowed henceforth for use of Oxygen as a commodity. It was communicated via a letter to the Chairman of the Executive Committee of the National Disaster Management Act. Most importantly, manufacturing units are hereby directed to maximise their production of liquid oxygen which will be supplied directly to the Indian Government with immediate effect. 

Why is the industrial use of liquid oxygen banned?

Liquid Oxygen will only be used for medical purposes since the diversion will save lives. The normal demand for Liquid Medical Oxygen in a pre-Covid era gone by was 700 Tonnes per day. The ongoing second wave of the Covid-19 pandemic in India has seen a 7X increase in the demand for LMO to 5000 Tonnes per day. The Government is at a critical stage where Indians are dying every second and they have been reduced to mute spectators. This is why the urgent decision was rolled out. 

The Manipur Startup policy was initiated in 2016 to make Manipur emerge as one of the top startup destinations in the Northeast region. The policy was then launched in March 2018 and aimed to enable the youth and unemployed persons in the State to take up new ventures with new and creative ideas. The policy missions included active encouragement of entrepreneurship as a career choice to the youth through appropriate learning modules, entrepreneurship development programs in vocational institutions; supporting and strengthening business incubators and accelerators in the state, setting up a platform for accessing avenues that provide financial support to start-ups, and to establish an ecosystem that facilitates up to 200 start-ups in the next five years. The four major stages of a start-up that the policy targets are as follows:

Pre-idea stage

In this stage, the state will aim to nurture the seeds of entrepreneurship in institutions and create a Network of Entrepreneurship Development Centers (NEDC) with Universities and higher educational institutes across the state. It will also promote capacity building of NEDC partner institutions through collaboration with leading business incubators in the state.

Idea/Prototype Stage

In this stage, the government will assist in creating business incubators in the state to enable the incubation of a number of start-ups while also providing mentorship to the new incubators. As part of the policy, it will also facilitate preferential lease of land from the State Government as per its land policy.