TEN years after it broke new ground in tracing the history and changing social profile of India’s business class, Harish Damodaran’s India‘s New Capitalists returns in an updated and revised edition. The book still makes for riveting reading and remains relevant to the changing times and circumstances.
The book, which won the Ramnath Goenka award for excellence in journalism, gives a deep insight into the rise of non-traditional business communities, offering a thorough and meticulous assessment of what India’s business landscape looks like and how it has mutated. Going beyond chronicling the evolution of the country’s business class, it offers a prognosis of what is in store in the foreseeable future for aspiring entrepreneurs and how the arrival of consolidation and the requirement of huge capital, a significant entry barrier, will likely alter the scheme of things.
Existing scholarship on India’s business communities was narrow in focus and scattered over time, not easily available to the lay reader. It was against this backdrop that Damodaran went over and beyond by doing pioneering research to collate material from far and wide and put together a fascinating analysis of how the profile of the Indian businessman has been changing since Independence. Alongside, he pieces together the social and caste histories behind several success stories that dot the length and breadth of the original book. In this updated edition, he paints a clear picture of the developments in the past decade, coming as they do amid paradigm-altering political and economic changes not seen since 1991, when liberalisation unleashed the latent potential of Indian entrepreneurship.
The most crucial development since 2006, especially in the current decade, is the “destruction of capital” and the drastic reduction in the number of new entrepreneurs, the author states in his preface to the revised edition. Amid rising unemployment and a political dispensation that does not seem to have fully grasped the enormity of the situation, the drying up of “new capitalists” is certainly a worrying trend, for private enterprise has a bigger role to play than any other section of society in stemming the rising tide of joblessness; there is only so much that any government can do. It is in society’s best interest to ensure that more and more opportunities are made available as the pool of job-seeking people widens with the spread of education.
Most of the new entrepreneurs of note have been restricted to a narrow segment of e-commerce and mobile-enabled services, the author notes. It is anyone’s guess how far this will go in rejuvenating a moribund economy that has been battered by external factors such as the global recession and internal developments such as mounting debt, the collapse of several corporates, and rising bankruptcies.
The author bemoans, and rightly so, the increase in consolidation and the fact that it cuts across sectors. As big players with deep pockets start dominating more and more sectors through mergers and acquisitions, smaller entities get shunted out as it becomes more and more difficult to stay in business competing against behemoths, while the investment requirement becomes insurmountable for aspiring entrants to even get a foothold in industry. The prognosis is certainly bleak and it is hard to be optimistic about what the foreseeable future holds.
However, another significant development since the first edition, which the author faithfully records, has been the emergence of Dalit industrialists. The author describes the rise of four company builders—Gaddam Vivekanand, Rajesh Saraiya, Ashok Khade and Bhagwan Dharmaji Gawai—and their success stories are heartening and inspiring. The road to Dalit emancipation is paved not only with education and ensuring adequate representation in government but also in setting up private enterprises. Dalit success stories in industry embolden and inspire others within the historically marginalised communities to look beyond the available career choices and allow their entrepreneurial spirit to flourish.
In the preface to the first edition, the author had said that the book, as it were, was originally intended to be an edit page piece or a fairly long paper at best. The reader can only be thankful that it metamorphosed into a comprehensive and compelling account of the changing profile of business in India simply because some saw the germ of an excellent and rewarding book in the author’s idea and encouraged and supported him in transforming the idea into reality.
This confession is in itself a point to ponder over—to consider the possibility that several such books are waiting to be written if only authors can find the wherewithal and support to expand on ideas and expend time and energy in bringing them to fruition.
Damodaran’s book carries the secondary title Caste, Business, and Industry in a Modern Nation, making it abundantly clear right at the outset that caste plays as important a role in the book as it does in Indian society. Few works talk about the overweening presence of caste in everyday Indian economic life; the world of business and industry is no exception when it comes to caste determining the line between success and failure. Damodaran’s candour in taking the caste bull by the horns and talking unabashedly about how historically it played a key role in ensuring success and aiding growth is rare and commendable.
The author starts off with an introduction to the traditional mercantile communities of the country and their general trajectories in pre- and post-Independence India. In this fascinating chapter, he delves into how, before 1947, the Marwari-Banias rose to become a pan-Indian network wielding enormous clout in society, and the far-reaching influence of communities such as the Shikarpuri and Hyderabadi Lohanas and the Nattukottai Chettiars, how Parsis made pioneering moves in manufacturing, and the rise of clans such as the Bhatias and the Gujarati Banias.
The chapter also accurately describes the changing fortunes of some of these once-dominant communities and how others among them have been able to reinvent themselves and thrive in a rapidly evolving world, where new technologies are disrupting traditional markets and new markets are being created even as some old ones fall by the wayside.
Non-traditional business communities
With the preamble out of the way, the book plunges into its core objective—the study of the growth of non-traditional business communities. The author begins with a chapter on “Brahmins, Khatris and Babus”, the social groups that were in the best position to challenge the entrenched traditional communities in trade and commerce, having acquired the advantage of education early on in colonial times. The author highlights the importance of education and how it enabled some enterprising members of the scribal castes to establish themselves in unexplored terrain despite inherent disadvantages relating to capital and acumen.
The next three chapters are devoted to other communities such as the Kammas, Reddys and Rajus of undivided Andhra Pradesh; the Naidus and Gounders of Tamil Nadu, and the Nadars (of Tamil Nadu); and Ezhavas (of Kerala), the last two sharing a common past of caste-sanctioned oppression and caste-ordained occupation despite different geographies. It is telling that a significant chunk of the book is focussed on south India, where castes from all strata within the varnasrama order were able to disrupt the hegemony of the trading castes owing to its history of social justice, education, land reforms and social upheaval. In most other regions in the country, the rigidity of the caste system proved to be a deterrent to disruption.
A chapter on Patidars and Marathas and one on why northern farming communities failed to make the leap into industry, along with a note on minorities, round off this absorbing work.
Traversing through the book is a learning experience not only in terms of what goes into the making of a success story in capitalist enterprise but, equally importantly, how various extraneous factors, primarily caste networks and associations and clan practices and support systems, contribute towards those successes and how one builds on top of another. Kinship networks enable a business success, which, in turn, strengthens those networks and concretises the caste legacy that is passed on through generations, be it in terms of providing capital needs, organisational resources, acumen, trade skills and knowledge and inspiration.
It is striking how each chapter and the business case studies in focus become an exercise in learning the history and sociology of the times gone by and also how, by virtue of upsetting the dominance of established castes, the upstarts also brought about significant and lasting social change, both within their communities and in the society at large.
This book is essential reading for anyone interested in exploring the symbiosis between caste and industry in India and students of business history and sociology in particular, for it is a study in how the changing face of private enterprise not only reflected a society in churn but also became an instrument of change in it.