NEW CAPITAL - Beyond the Bania

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By MAHESH RANGARAJAN
  • Published 11.04.08
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India’s New Capitalists: Caste, Business, and Industry in a modern nation
By Harish Damodaran, Permanent Black, Rs 695

Books on the business histories of South Asia rarely succeed in exciting the reader’s interest and in generating fresh insight. Initially, there was an obsession with the traditional mercantile groups that prospered in the shadow of the raj. Of late, there is work on the new knowledge-based czars of software. It is the vast vacuum in the middle that this book seeks to fill. It is fitting that it should appear in a series titled “The Indian Century”, with Sunil Khilnani and Ramachandra Guha as the general editors. This is not the first book in the series, but it is a pioneer in its treatment of an issue critical to the present trajectory of development.

The author, himself a journalist, brings to the subject the keenness of a close observer. This is, therefore, a rare work of economic history and contemporary sociology that is rich in anecdote. Shiv Nadar’s father was a sessions judge. Few north Indian Brahmins made it in business; Mohan Meakins never was as successful as the Goud Saraswat Brahmin who bought out his foreign partner and laid the foundations of what is today the Kingfisher brand. If Vijay Mallya’s fortunes in Karnataka lay in the deeds of his Dhaka-born father, the stories of the Nadars of Tamil Nadu and the Ezhavas are among the most meteoric tales of the remaking of the fortunes of communities — in this case, those lower down the social ladder of caste. The Nadars of the Deep South consolidated themselves into a bank in the Twenties that enabled them to get access to credit. Only recently did they break up as class-based cleavages opened up in the community.

The Ezhava story includes an early magnate who employed high-caste Nairs to be mahouts of his elephant. But it was the early 20th century. The elephant-keepers could enter a temple courtyard (so presumably could the elephant). The owner had to wait outside.

In a sense, both kinds of success stories perhaps owe a lot to social reform. Brahmins in the peninsula turned to business as positive discrimination in public employment closed avenues for upward mobility. T.V. Sundram Iyengar was as crucial to the future as the anti-caste leader, E.V. Ramasamy Naicker. The former founded the TVS group, a rare Brahmin-owned company in today’s big league. The latter is still held up as an icon by all Tamil nationalists.

The flip side of Brahmin-owned capital was that lower-caste empowerment itself often had goals that were economic and not narrowly political. The creation of educational and self-help institutions is only one instance of such initiatives. Punjab and Haryana were also better launching pads for agriculturists in business than eastern India as there were historically far more owner-cultivators. Yet, despite there being several Sikh industrialists, there are few Jats among them. One of the few, Indra Singh, actually was a supplier for Tata Steel. His son, Baldev Singh, was India’s first Union defence minister. Another enterprising lot were the Ramgarhia Sikhs who were Zail Singh’s community. Yet, in the main, the ladder upwards was taken by the banias and khatris. This list of names of those who have made it is near encyclopedic.

Damodaran shows there are several factors that ease the ascendancy of new groups in capital, who are, to use his phrase, “beyond the Bania”. In much of peninsular India, the roots lie in the past for the mercantile castes, including the well-known Tamil Chettiars (the present Union finance minister’s community), that never had the kind of stranglehold on the trade in farm products that their north Indian counterparts did. Not only that, a mixture of progressive princely rule (a Travancore or a Kolhapur), missionary education (especially so in the Deep South), and social reform opened the doors to men of talent. Caste was a bar, but increasingly less so.

Yet, there is no sizeable Dalit industrialist, not even in the West or South. There is, however, a turnaround in the fortunes of farm-based groups in western India. The Patidars formed the backbone of the most remarkable cooperative experiment in 20th-century India — Amul. Next door, in the Marathi-speaking region, sugar and cooperatives went together to help the Marathas enter into market relations on a more even footing than their north Indian brethren.

Here, as elsewhere, this book raises a myriad questions that sociologists as well as historians will struggle to explain and answer. The good story-teller that he is, Damodaran is too cautious to go beyond his material. What remains still is a fascinating work that will force us to re-examine many fond notions such as those of the narrow social base of Indian capital. If anything, even State-run enterprises, it turns out, have helped to create the seedbeds of new groups in enterprise. The Nagarjunasagar dam in the Telugu country entailed contracts, often taken up by the Reddys. A generation later, a similar flow of contracts helped many Kammas gain from the Telugu Ganga project.

Damodaran’s work helps distinguish between different regions and communities. More than that, it takes the reader back to an old question about the origins of capital. The ‘farm to factory’ route has evidently worked in vast regions of India. It is perhaps no coincidence that it is precisely these areas in the South, West and the Northwest that have gained most from opportunities opened up by economic reform. They may not have read Deng Xiaoping, but his slogan, “To get rich is glorious,” has had many takers in this country.

This is an elegantly produced work that will stand the test of time. It is hoped that not just social scientists but leaders of business and industry will also draw from its insights as India enters a new phase in its evolution as an Asian giant.