Big Industry Before Independence: 1860-1950

The world over, in the eighteenth and nineteenth centuries, private sector units were of a laissez-faire variety i.e., the private sector was completely free of state interference. Private enterprises were units owned and managed by individual proprietors and partnerships. Even in India, private business houses in spite of many obstructions placed by the British government flourished and managed to earn huge profits. This was also the era when government investment in industry was zero. Thus, in this paper we try to analyse the rationale behind government investment in industry post independence. At the beginning of the First World War, Europeans managing agency houses enjoyed unchallenged supremacy in the private corporate sector of the Indian economy. At the end of the Second World War this supremacy had been broken and Indian entrepreneurs, advancing by rapid strides in the inter-war period, were now in a position to take over the business of the departing British. [Working Paper No. 0025]