Saturday, September 19, 2015

Forging Capitalism in Nehru’s India

Forging Capitalism in Nehru's India


The current phase in Indian history, mercifully and hopefully it would be short, will end up doing tremendous damage to the country. Its current ruling policymakers and spokesmen are trying their best to drag India backwards to mediaeval times. The Prime Minister claims, because of Hindu god Ganesha, that India had a high level of surgical abilities of head transplant in the past.


Every effort is being made to badmouth Jawahar Lal Nehru, India's first prime minister and his daughter Indira Gandhi. Would the NDA have the ability or courage to dismember Pakistan as she did in 1971? Nehru was one of the greatest modernizers in modern Indian history and his grandson Rajeev Gandhi also followed the path of modernization.


Day in and day out, the current leadership, controlled by Nagpur Brahmins ideologically and bazaari merchants  turned into vicious rentier capitalists are badmouthing the foundations laid by Nehru and his team in modernizing India to face the onslaught of Western capitalist rent seekers.


I have some personal experience of how under Nehru the government established the Indian drugs and pharmaceuticals ltd to manufacture raw materials for formulations ie antibiotics, synthetic drugs and surgical instruments. During my tenure as CMD, IDPL was the biggest Indian company at that time (1985-86) with almost one fifth of the India's total production and sales at around $ 120 million. Now India produces many billions of dollars worth of pharmaceutical products which it exports to the rest of the world as well.


After independence ,since foreign pharmaceutical multinationals were not prepared to give technology to manufacture bulk drugs, IDPL was established, which forced multinationals and even private sector to bring in some technology to India. But IDPL trained thousands of cadre for the pharmaceutical industry including Dr Reddy of Reddy Laboratories ,Hyderabad ,where IDPL had its synthetics unit plant .Dr Reddy was one of IDPL.s many General managers there . The result is for everyone to see.


In this context I'm giving below a write-up on a book which should be salutary for those who are all the time badmouthing Nehru and Indira Gandhi. The NDA regime including the previous one and the current one are politically controlled from Nagpur and are in the hands of Baniya corporates which AAP party has named publicly and need not be repeated here again. Their tribe is increasing.

Of course the world is being led by the nose by Jewish financiers and military Industry complex in USA.


India's major problem brought out by this book is that the country is caught in the time warp of the 16th - 17th-century ie the end of the great Mogul empire end. A recent US PEW survey indicated that Indians are quite satisfied with the current rulers .It should be a matter of concern since it indicates that the Indians are still immersed in medieval times and are happy with that kind of retrograde regime  and outlook . But a US newspaper has also indicate that Modi is one term PM .Every day his juggler like tricks are being exposed .His promises were just that and at wore lies .His notorious deputy Amit Shah says that the promises were just phrases (Jumlas)


The electoral system has only further accentuated the religious , caste and linguistic divisiveness  The local mafias masquerading as Democrats basing their power begetting a majority in the assembly with 27% of votes cast ( of their caste and some ) are neglecting the rest of the population. There is urgent need of at least reforming the electoral system on the basis of election of a member with 50% plus one vote. It is unlikely to happen in my lifetime unless there is anarchy and chaos followed by a revolution. India is ruled by mafias like Vyapam mafia ,BCCI and state mafias .


Let me reiterate once again that according to Indian or rather Brahminical ethos, philosophy and thinking there is no equality of law, there is little comprehension about the conflict of interest, among other things.


India remains a conglomerate of castes, religions, languages, regions all held together because of most of its border faces the Sea Wherever it adjoins another country there are problems within adjoining Indian states.


The Western world is controlled by Rockefeller and other Jewish and corporate interests in USA and Rothschild and rightist corporate interests in UK, .Most other Western countries ,in any case are under the sway of Washington and New York .


Only after revolutions, France, Russia, Turkey, China, Iran and others have emerged as united modern states


According to Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, the total turnover of India's pharmaceuticals industry between 2008 and September 2009 was US$21.04 billion. Mumbai, Hyderabadand Ahmedabad are the major pharmaceutical hubs of India.[2] While the domestic market is worth US$12.26 billion as of 2012, and is expected to reach US$49 billion by 2020[3]


Forging Capitalism in Nehru's India
Nasir Tyabji
Oxford University Press
202 pages
Rs 591


India's capitalist class has historically arisen from the bazaar. Our businessmen have also, since medieval times, been known for their various trading and financial innovations — from the hundi (an indigenous bill of exchange-cum-mobile credit and long-distance remittance facility) and goladari (warehouse receipt financing), to fatka (futures) and teji-mandi (put and call options) contracts. The same creativity has been seen even in more recent times in various rotating savings-and-credit funds (chits, nidhis and kuries) and the stratagem of selling pan masala and shampoo in sachets.


The flip side of the bazaar supplying the basis for capital accumulation, however, has been the businessman's general detachment from the production process itself. Unlike moneylending or buying and selling of commodities — which merely redistribute value already in existence — it is production in factories and farms, and innovation in laboratories, that really create new value and products. But given that businessmen in India's time-honoured caste system were predominantly recruited from the Vaishya or mercantile order within the varna vyavastha, production was never in their DNA, so to speak. The Shudra and Dalit castes responsible for actual production, on the other hand, did not possess the capital to progress beyond being artisan-entrepreneurs.

The end-result was that a true industrial capitalist class couldn't emerge, as the mainstream Vaishya businessmen — the only ones with money and capital — found it more expedient to allocate their resources for trading, usury and speculation in the bazaar.

The present book is interesting not for stating the obvious — the Indian business class' largely merchant/moneylending/speculative origins that made it less inclined to invest in industry, research and other long-gestation projects. That even the industrial ventures of the old Bania-Marwari conglomerates weren't independent of their larger trading, financial and speculative interests, is an established fact. The surpluses from industrial concerns were often, indeed, diverted to non-industrial activities and other group firms — so much so that adequate provision wasn't made for depreciation of equipment, leave alone technological upgradation and modernisation.


The author, Nasir Tyabji, is equally right in emphasising the role of the managing agency system, which allowed promoters to float joint-stock companies and run them the way they chose to, with all the advantages that limited liability conferred: until 1913, Indian companies weren't required to even have a board of directors, while it was only in 1936 that a clause mandating managing agents to be appointed by shareholders' resolution was introduced.

Tyabji's real focus, though, is on the post-Independence Nehruvian period that, he claims, was notable for attempting social engineering in order to "nurture the development of entrepreneurs with a truly 'industrial' frame of mind". Integral to this was administrative coercion along with policy measures for "extending the time horizons of the business community" and "transformation of a class of merchant-usurers into industrialists".


Now, there's no doubt — and this is something even scholars like Pulapre Balakrishnan have pointed out — that economic policymaking had some amount of 'integrity' during the Nehruvian era, with the state being relatively independent of corporate and other special interests unlike today.

Also, it's true that unethical business behaviour and profiteering by Indian capitalists during World War II, followed by rampant bazaar speculation and evidence of financial manipulation as revealed by the investigations into the operations of Haridas Mundhra and the Dalmia-Jain group, did not particularly endear the business class to the general public. It led to a series of actions — including removal of tax rebate eligibility on company reserves not utilised for upgradation of plant/machinery and steps culminating in the abolition of the managing agency system in 1970.


But whether these measures — extensively documented by Tyabji based on Jawaharlal Nehru' private papers, among other things — amounted to 'social engineering' is a moot point. Controls on reserves with a view to discourage their 'non-industrial' utilisation, or abolishing managing agencies to make companies purportedly board-managed entities accountable to shares, hardly helped in creating a genuine industrial capitalist class in India. Nor did the Indian state, during Nehru's time or afterwards, really seek to 'discipline' capitalists a la South Korea or Taiwan. Indian capitalists, at the end of the day, have failed to transcend their fundamental 'Vaishya' character.


The Ciplas, Dr Reddy's Labs, Bharat Forges or Mahindras, and even initiatives such as the Tata Nano, are exceptions to the larger reality.


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