By the time the 19th century
came about, Great Britain had become the dominant

political
power on the subcontinent. Due to so many years of nonviolent resistance to
British rule, which was led by Mohandas GANDHI and Jawaharlal NEHRU, ultimately
resulted in Indian independence. The Indian Independence was granted in 1947. A
large amount of communal violence was taking place both before and after the country
separated and turned into two different countries, India and Pakistan. The nations,
in which surrounded India and Pakistan, have fought around three separate wars
for their own independence. During the final war, which was in 1971, allowed
for East Pakistan to become the separate nation, in which is now known as Bangladesh.
During the year of 1998, India conducted nuclear weapons tests, as well as
emboldened Pakistan to conduct their own tests that same year. In the year of
2008, terrorists, who originated from Pakistan directed a series of coordinated
attacks in the country which is known as Mumbai. Mumbai is considered to be India’s
financial capital. Despite India having a significant overpopulation,
environmental degradation, extensive poverty, and widespread corruption; an
economic growth was able to follow the launch of the economic reforms, which
took place in 1991. As well as a massive youthful population are helping to
drive India’s emergence as a regional and global power.

India has a population of
around 1,281,935,911 individuals, according to the Central

Intelligence
Agency, “consists of Indo-Aryan 72%, Dravidian 25%, Mongoloid and other 3%”. India
is developing into an open-market economy, yet traces of its past autarkic
policies remain. In the country of India there are several economic
liberalization measures, which include “industrial deregulation, privatization
of state-owned enterprises, and reduced controls on foreign trade and
investment, beginning in the early 1990s and served to accelerate the country’s
growth, which averaged nearly 7% per year from 1997 to 2016” according to the
World Fact Book. In 2011 India’s economic growth began to slow down due to a
decline in investments. The reason for this decline is being caused by high
interest rates, rising inflation, and investor pessimism because of the government’s
commitment to further economic reforms and about slow world growth. With the
beginnings of rising macroeconomic imbalances and the improvements of economic
conditions has led investors to shift capital away from India. With this taking
place it has prompted a sharp depreciation of the rupee in India.

According to Schumpeter:
Making Money in India, “if you run a big firm in India you

must
straddle different worlds.” When you first read this, your first thought must
be how could this be? Of coarse we have a different perspective than the people
in India do because our countries are different. India has a very poor
infrastructure, as well as a huge informal economy; because of this millions of
the customers in India can only be reached by traveling through dirt tracks.
What most people would find most surprising about the Indian bosses is that
they would be having wheat grass shots in Silicon Valley, slug down bootlegged
single malts with a local politician, as well as sip on masala chai from clay
cups with villagers, this is because there are shiny new campuses that are
built beside open sewers.

India’s gross domestic product
(GDP) is actually the world’s seventh-largest and its stock

market
the ninth-biggest, but the country is like no other major economy, as we can
see from the above statements regarding the country. According to Schumpeter:
Making Money in India, “the informal sector accounts for about 50% of output,
80-90% of jobs and at least 90% of firms”. As you can see from just the few
statements, India is both a terrible and brilliant place to do business, but
even knowing this the countries informality and poor infrastructure is creating
obstacles for new entrants. It would take around ten to twenty years for
individuals to build a dense national supply chains and distribution networks.
Yes, it does take along time to do so in the United States, it is much more
difficult to do so in India.

According to Schumpeter:
Making Money in India, “anew value-added tax, known as the

GST,
requires firms to reconcile their tax returns with those of their suppliers and
customers, forcing millions of companies into the tax net.” With this out come being
put into place it has made it much riskier for businesses to hoard illicit
cash. Recently parts of India have created new digital identities, allowing for
open bank accounts. Even though this has happened, parts of the country have
seen a 13% increase in formal savings (bank deposits, life insurance, mutual
funds). Even though this is happening in parts of the country are still behind
in advancements, and courts have a backlog of around 30 million cases.

For all the companies that are
still laying in the shadows (shoe-factories, plywood

manufacturers,
drinks wholesalers supplying roadside stalls) they will soon be cut out from
all the legal supply firm chains, but if they do decide to become a legal business
their tax costs will go up and may crash form the payments. Therefore, in the
long-run, according to Schumpeter: Making Money in India, “firms may be hurt by
better-functioning markets for capital, land, and natural resources, as well as
more efficient supply and distribution chains.”

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