How India’s Republic Day Is Impacting Businesses Across The Country
The Business of Being A Republic
15 August 1947 may be the most important day in modern Indian history, but 26 January 1950 was perhaps the most important date for India’s future. It was the day that India became a sovereign republic, and its constitution came into effect – something that has an impact on every aspect of our lives, including business and commerce.
The constitution is a codified document where all the laws and governing principles of the country are enshrined. You can think of it like a vision document. The current version Indian constitution begins with the following words:
“WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC…”
These words are just the beginning of a document that lays down the fundamental rights & duties of citizens as well as the laws of the land and how the government organizes itself to draft new laws and enforce existing ones. These laws not only contributed to establishing a bright new future for the country but also created a real cultural, social and economic change – making it the backbone of the country.
The Business Impact of the Constitution
In order for businesses to thrive, the country needs good institutions with laws that can ensure a good business environment. This trend is seen in countries around the world. And we can see this in our own lives. Almost on a daily basis, we interact with and trust strangers to make monetary transactions for products and services, safe in the knowledge that there is a system safeguarding us.
As we elaborate below, the laws that have propelled business growth in the country pertain to enforceable guidelines with regard to contracts, property rights (both physical and intellectual), banking and financing, as well as taxation.
Contracts contain legally enforceable rights and obligations of two parties. Let’s take the example of a publishing house. The author writing a book would have signed a contract to deliver a completed manuscript for a certain sum of money by a given date. The contract also puts forth certain circumstances under which either party might not have to carry out its obligations. A good contract ensures that should either party breach its obligations, and there is a legal system that will protect those that have been affected. This is why thriving businesses are almost impossible to run without contracts.
- Physical: Be it a factory building or the machines in it, all are investments made possible by the existence of property laws. If a business were unsure that it would be able to own and operate its property in the future, it is unlikely that it would invest the time, effort, and money in the country.
- Intellectual: For ideas, creating such protection is trickier. However, it is necessary, as it encourages companies to keep innovating to create better products and services as they can benefit from this innovation without the threat of another company copying their ideas, thereby encouraging investments in future Research and Development.
Banking and Financing
The Constitution also alludes to the Reserve Bank of India, which issues currency notes in the country. These currency notes enable both customers and businesses to conduct transactions, enabling business across the country. Banks also enable us to store big sums of money and make frictionless transactions across large distances. This allows businesses to keep immaculate records and conduct business easily without having to carry around large sums of cash.
Moreover, the banking and financing system and laws help businesses gain access to finances that they can invest in for growth. It also ensures that excess money can flow toward those who could utilize it and benefit both parties. In such a scenario, the lender is assured that the legal system will help them get their funds back, and the borrower is assured that the lender has to set fair rates and terms such that they are not exploitative.
While taxation takes money away from businesses, it enables the government to use the funds towards creating and enforcing laws and creating a positive business environment – ultimately benefiting businesses in the long run.
Such a structured system encourages foreign and national companies to open businesses. It also creates an environment for trade between countries – bringing in new technology and products that can enhance the economy. All of these factors have a cascading effect, each, in turn, driving opportunities and innovation.
Failing to delegate is one of the top mistakes small business owners make. When you try to do everything yourself, you end up stretched thin and burned out. You also miss out on the valuable insights and perspectives that other people can bring to your business.
Instead of trying to do it all yourself, learn to delegate tasks and responsibilities to others. Not only will this free up your time so you can focus on the most important aspects of your business, but it will also allow you to tap into the skills and talents of others.
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