How has capital thrived in India? The question seems to be pertinent in the backdrop of the meteoric rise of India as an economic powerhouse. With the number of millionaires in the country crossing a figure of one lakh (100,000), the Indian capitalist class has left a unique imprint on the global economic scene. Indian companies are today buying out global brands and creating globally recognized products of their own. However, the rise of capital and the capitalists cannot be separated from the larger social and political milieu. The Indian capitalist class, therefore, was not insulated from the culture, society, polity and geography in which it operated. All these factors contributed to the rise of Indian capital in their own unique way.
In this backdrop, Harish Damodaran’s effort in providing a thick description of the rise of the Indian capital and its new capitalists is a welcome contribution. The narrative tries to delve into the history of Indian entrepreneurship, from the times of the British Raj to the domination of the country’s closed economy by ubiquitous quota systems and further linking it up to the liberalization of the economy in early 1990’s. It traces out the rise and fall of different merchant communities or in modern parlance - the business houses. The depth of the narrative is its major strength. The author picks up the history of each of these communities and links up with the context in which they operated. This contextualization allows the readers to understand the social and political forces which helped or impeded the growth of these entrepreneurs. The narrative is full of details and there is where the author develops an interest in the reader. The treatment of individual entrepreneurs and their struggles is captivating. However, the main strength of the book is that this detailed narration does not deflect the reader’s attention from broad threads which underlie the history of the Indian capitalist class.
First is the role of agriculture and geography in the development of Indian Capitalism. The growth of hybrid varieties of cotton and tobacco and the breakthrough in irrigation techniques in coastal Andhra Pradesh helped the Kammas to venture into the textiles industry and tobacco processing. On the other hand, the Reddys, though in possession of more land compared to the Kammas, made mining their preserve since they inhabited the drier lands of the state were irrigation was a major problem. Similarly the coming of Cambodia breed of cotton helped the Naidus of Coimbatore to make the city the ‘Manchester of the east’. In Marxian terminology, these were the agriculturists with surplus capital. However, one other major factor which allowed the consolidation of these communities was the absence of the traditional Indian merchant class better known as the Bania or the Marwari. The absence of capitalist entrepreneurs in the Bengali Bhadralok and the Jats of northern India is an example of the pervasiveness and depth of these traditional merchant classes. It was also one of the reasons for the Patidars of Gujarat and Marathas in Maharashtra to develop co-operatives methods of industrial development.
The second broad argument which clearly manifests itself in the book is the role of society, traditions and culture in the growth of Indian capitalist classes and vice versa. The sense of community has played a significant role whether it is the case of the rise of Parsis in the pre-independence period or the Gounders of Tirupur in Tamilnadu in the post-Independence era. The case of Tirupur Export Association is unique. Similar is the case of the Nadars in Kerala. The Nadar Mahajana Sangam and the Nadar Bank limited, later renamed Tamilnadu Mercantile Bank, were instrumental in the business success of the Nadar Community. The story of Sakthi Sugars, a Gounder enterprise, were community shareholding comprised 40 percent of the total shares is a case in point. These community links are also evident in the Patidar and Maratha communities. Though, societal trust and bonding has been crucial for business, the Indian Caste system had its own impact on the business scene. For example, the Patidars and the Marathas were the dominant castes in the rural settings of their respective states and controlled most of the land. What Brahmins lacked in land, they made up in education. However, again this essentialisation is problematic since the Brahmins in north India remain insulated from the affects of the Capital. The author explains this variance by the logic of flexibility and openness of the southern Brahmins because of their early exposure to the winds of imperial globalization. However, most fascinating is the dialectic between success in business and social mobility. The Marathas, having tasted the success of co-operatives, increasingly started asserting their Khastriya lineages. The success of Nadars and Ezhavas in Industry and Business in Kerala also resulted in a vehement opposition to Brahmin dominance in society and religion. In this sense, the rise of capital has acted as enabling factor for the socially excluded. The book also makes the affects of culture and identity conspicuous. These are most observable in case of the Bengali Bhadralok and the Jats. Whereas the former was accultured by the presence of the British as a typical westernized ‘babu’, the Jat identifies itself vis-à-vis the dishonest and shrewd ‘Bania’ and therefore loathes business. However, these essentialisations have their own limitations and the author is careful enough not to solidify these constructions by elaborating on the successful business ventures undertaken by these communities.
The third element which the author seems to bring out is the crucial role which globalization played in the growth of the new capitalist class. The impacts of a global economy are visible in the fallout of the Great Depression on the British business and the opportunities it provided for the local. We also saw how changes in agriculture and irrigation techniques allowed the surplus capital to grow which was later channeled in to industrial development. Moreover, increasing foreign collaborations helped the indigenous industries. The export led growth of the Tirupur knitwear industry is one such example. Today, the knitwear from Tirupur contributes to world brands such as Marks and Spencer’s, Tommy Hilfiger, Wal-Mart and many others. Moreover, the role of foreign education and the experience which Indian entrepreneurs gathered while working abroad cannot be ignored. Also, Indian Diasporas, especially the Patels of Gujarat and the Sikh Jats of Punjab, had their own impact both in economic and political terms. However, the effects of globalization have been mixed. There appears to be strain between modern individualism and traditional community based approaches to capitalism. Again the author’s elucidation of the case of Tamil Mercantile Bank makes the point crystal clear. Initially an endeavor of the Nadars of Thoothukooti, the bank was devised to cater to the financial interests of the community. However the furor which accompanied the sale of 15 percent of the Pioneer Asia (A Nadar enterprise) shares in the bank to the Essar group (Marwari) reveals this growing rift. The same is visible in the new initiatives among the Patidar community in Gujarat who are now leaving the co-operatives for more individualistic pursuits of capital. The underside of the process also reveals itself in the new challenges which settled business communities are facing, manifest in the new environmental and labor norms affecting the cost of production (Fireworks in Shivakasi and Textile industry in Tirupur) and the coming of new technology forcing traditional practices to extinction ( the hand-printing industry in Shivakasi). However, this has also opened avenues for new entrepreneurs, Suzlon being an example.
The last point which I think clearly comes out of the book is the nexus between politics and capital. The coming to the foray of Gujarati Business and Industry by the Patidars community was linked to their participation in the Indian independence movement and close association with Indian National Congress. The unsuccessful yet bold attempts by the Bengali Bhadralok in business were themselves motivated by the swadeshi movement. The post independence period saw the rise of a number of business communities and the interesting point is that most of these high capitalists saw political power as the consummation of their financial endeavors. The coming to power of the Telugu Desam Party in Andhra Pradesh and the increase in Kamma wealth was not coincidental, nor is, in hindsight, the issue of the separate state of Telangana. The profile of leaders active in Maharashtra state politics eventually tells the story of co-operatives and their link with local politics. The lack of opportunities in Business and Industry explains the active support provided by the Sikh Diaspora to the cause of Khalistan.
The book however has its own deficiencies. A preliminary reading would give a hint of portraying communities with fixed identities mainly the chapters on Bengali bhadralok and Jats. Similarly, by restricting the cutoff for the new capitalists to a 100 crore (1000 million) rupees turnover threshold, the book may appear to unnecessarily celebrate the big business leaving out more interesting tales of small but more creative entrepreneurship. Another deficit of this work is the tangential treatment of the minority business classes. However, no work is supposed to cover every possible detail it can. The most important contribution of the book is that it situates this capitalism firmly in Indian polity and society and therefore, illuminates the reader on how capitalism takes different avatars under different circumstances. It allows us to understand the specificities of capital in the Indian case yet gives an impression of its transcending and flexible nature.