Recasting India Read online

  The phrase “mango people” literally translates to aam aadmi in Hindi, since the word aam means both “common” and “mango” (and aadmi means “man”). This book is for the common men and women of India. They haven’t yet had their Arab Spring, or their Indian Summer for that matter, so instead, they’re channeling their frustrations, fears, anxieties and dreams into entrepreneurial fervor. This is their very different tale of independence, the freedom they are only now beginning to feel free enough to even comprehend.

  This book was later called Recasting India because that is what is happening. India is being recast, remolded and redefined. I started writing this book because I felt that a powerful moment of change in India was upon us—and it was being missed or misunderstood by much of big business and big politics, and indeed much of big media—but the people, the workers, the entrepreneurs understood it only too well. They could feel the throb and thrust of that change. They could see it play out every day, in every nook and corner. And they were contributing to that change. Their collective enterprise—in building, thinking, creating, sharing, protesting and pushing—is changing one of the oldest civilizations in the world. Even if some of that change comes with much cursing and snarling.

  But what are they pushing against? They are fighting against the idea that India is, in essence, a socialist country in which the state is the key; this is a tale of India trying to rediscover, and retell, its history of astonishing enterprise. At a time when public thought in the West is increasingly telling of the demise of capitalism, when books are being written about why capitalism does not work, India is brimming with the aspiration of a billion entrepreneurial minds, what former prime minister Manmohan Singh once referred to as the “animal spirits” of the economy. In this, the Indian story is exactly the opposite of what is happening in the West, which despairs that the excesses of capitalism can never be controlled and that the destructive power of inequality is the Achilles heel of capitalism.

  India has the opposite despair. When an Indian sees Antilia, he despairs not just because of inequality (though that’s the story Roy and others like her prefer to focus on), but even more because of the lack of opportunity for him to build his own tower of success. Not per se a tall, tall building, you understand, but a chance to climb high and fast. This is the power of the aspiration and enterprise of millions of Indians that is not understood by most tellers of Indian tales. This is because their prism of analysis is Marxist theorizing—many of them were indoctrinated in the most left-leaning universities of America and England—and see in India’s poverty only despair, not the yearning for one chance, one opportunity to break free. They believe that the state must play a welfare role—and indeed there is nothing wrong with that per se—but they fail to appreciate the role the state must play to enable enterprise: not just provide fish for the people to eat but also teach them to accurately cast the line for the biggest catch.

  What does not help in this is that parts of history have been wiped out of everyday conversation.

  *At the time of writing, $1 is equal to approximately Rs 59. The terms “lakh” and “crore” are Indian units of measurement. A lakh is 100,000 and a crore is 10 million. So Rs 1,000 = $17; Rs 5 lakhs = $8,500; Rs 1,000 crores = $168 million; Rs 2 lakh crore = $33 billion. All conversations are approximate.

  CHAPTER 1

  THE BUSINESSMAN CALLED TAGORE

  When the name Tagore is mentioned, does anyone ever think entrepreneur? Not many do. The easiest association of that name is with Rabindranath Tagore, the first Indian Nobel laureate and the first non-European to win the Nobel Prize in Literature, in 1913.

  Rabindranath Tagore was, like me, a Bengali. The Bengalis are known as the intellectuals and at the same time the effete of India. Both allegations are only partially true. It is true that the renaissance came first to Bengal, whose capital, Calcutta, was between 1772 and 1911 the second most important city of the Raj as India was becoming the jewel in the imperial crown. It is also true that even 30 years ago, Bengal was the cultural capital of India, producing, among others, the first Indian director to win an Oscar when Satyajit Ray, who lived and worked only in Bengal, accepted his for lifetime achievement in cinema from his deathbed in a hospital in southern Calcutta in 1992.

  Today, Bengal is better known for having one of the worst rates of crimes against women in India and for elections in its villages in which scores are murdered in gun and knife battles between local political parties. Also, while generations of Bengalis have worked little to change their reputation as timid but egotistical argumentative sloths, the first and only organized army against the British Raj was raised by a Bengali intellectual, Subhash Chandra Bose. Some of the first intrepid bomb attacks on the colonial masters were the work of a Bengali, Khudiram Bose, who was hanged for murder having barely reached his eighteenth birthday. So much for being effete.

  The Bengali is also said to be best fit for pontificating clerkdom, having little or no enterprise.

  But long before Rabindranath earned the epithet “Gurudev” or the “Great Master” for his innumerable works of poetry, prose and drama of rare elegance, in fact, around three decades before his birth, another Tagore was already making history.

  Dwarkanath Tagore was the grandfather of Rabindranath, a man so wealthy that he earned the epithet “Prince” though, strictly speaking, in an India full of kingdoms and pedigreed loyalty, he was merely a rich landowner. But unlike so many other landlords, who were at best profligate wastrels content with the serfdom of their poor farmer tenants and groveling servitude to the British masters, Tagore went into business.

  His interests spanned coal and tea and jute, sugar refining, newspapers and shipping. In 1829, he was the first Indian to become the director of a bank. In 1834, he and his partners started the first Anglo-Indian (Indian and British) trading agency, Carr, Tagore and Company. He was a man who dreamed of bringing England’s industrial revolution to the Hooghly shoreline.

  In his 1976 book Partner in Empire: Dwarkanath Tagore and the Age of Enterprise in Eastern India, historian Blair Bernard Kling says that Tagore’s dream was to take his state of Bengal, perhaps even all of India, from the mercantile to the industrial age, and put the steam engine to commercial use in the country. “Tagore organised the first coal mining company and the first steam-tug and river steamboat companies, and was among his country’s pioneer railways promoters,” Kling writes.1

  As a child, I heard stories of the great wealth of Prince Dwarkanath Tagore. Some of these were especially incredible because I am a child of Communist Bengal. By the time I was ten, the eastern Indian state had already seen more than a decade of elected Communist governments. From that world of load-shedding—as we called power cuts—for many hours each day, one story has remained. Invited to a musical soiree, a jalsa full of princes in their jewels in honor of the Queen of England herself, Dwarkanath chose to wear merely the finest white cotton with not an ornament in sight. But on his feet, each of the curling nagra shoes had a solitary diamond, as large as a marble, attached to the front lobe. He knew that he would have to leave his shoes outside the hall, as was the custom, and he did so, leaving the diamonds with utter nonchalance when he entered.

  But in the Bengal I knew, such unostentatious elegance was already dying out, and the city was being slowly eaten from within by political thuggery so bitter and omnipotent that generations of Bengalis dreamed of escaping, as if from Cuba or North Korea. The Bengalis had long given up on enterprise, leaving most businesses to be taken over by the Marwaris from the northern desert state of Rajasthan and the Gujaratis from the west. The Bengalis had embraced glorified clerkdom like a badge and covered sloth with a sneer of intellectual pretension that has, even today, kept the state and its people primitive, in denial and clinging to the iconography of Rabindranath, the soulful poet-philosopher, but willfully forgetting Dwarkanath.

  But Dwarkanath was far from being a soulless capitalist. With Raja Rammohun Roy, he was the founder of the Brah
mo Samaj, the new community of breakaway Hindus fighting against the worst Hindu superstitions and rituals and turning the faith toward its core Vedantic monotheistic roots. One of the biggest battles Rammohun fought, with the vociferous support of Dwarkanath, was against sati, the horrifying ritual of women committing suicide by burning themselves on the pyres of their dead husbands.

  Both Rammohun and Dwarkanath were Anglophiles. At a time when the renaissance was sweeping into Bengal, who can blame them for looking to the West for modern ideas far from the caste- and superstition-ridden, and often illiterate, environment at home?

  As a result of their persistent and vocal campaigning and in the face of virulent resistance from Hindu orthodoxy, the duo got Lord William Bentinck to abolish sati in 1829 and make it a criminal offence.

  It is almost impossible to conjure up today how big a victory this was in nineteenth-century Bengal. Suffice it to say that it has been consistently mentioned by historians as one of the triggers of the First War of Indian Independence, or The Sepoy Mutiny as the British describe it, less than three decades later in 1857.

  “The abolition of sati, the abolition of infanticide, the introduction of vaccination, the law to legalise the remarriage of Hindu widows … were pressed upon the attention of the army and the masses as so many deliberate attacks on the outworks of Mahommedanism and Hinduism,” wrote Sir William Lee-Warner in Life of the Marquis of Dalhousie (1904).2

  “And the simple, superstitious, credulous sepoys were told that the time was rapidly approaching when by some piece of jadu (magic) the Christians would … uncaste the whole Hindu population and outrage all their traditions and feelings.”

  The second part of the quotation is mostly the figment of colonial imagination that sees colonial rule as the advancement of the natives and the “white man’s burden,” but the abolition of sati caused a tectonic shift in the power structure of conservative, and at that time as now, majority Hindu society.

  But India’s merchants, traders and entrepreneurs were forcing societal change even long before Dwarkanath. In 1669, Mughal Emperor Aurangzeb was at the height of his proselytizing reign. By his orders, numerous Hindu and Jain temples were being destroyed. Faced with the destruction of their places of worship in Surat, and perhaps even their own forced conversion to Islam, Bhimji Parekh, one of the city’s wealthiest merchants, took charge.

  He complained to the local British trade representative, Gerald Aungier, who was president of the Surat factory—he would in 1672 become the third governor of Bombay—that unless their faith and places of worship were protected, most of the merchants, the backbone of trade in Surat, would leave en masse for Bombay.

  Makrand Mehta writes in his 1991 book Indian Merchants and Entrepreneurs in Historical Perspective that this left the Englishman torn. He sympathized with Bhimji, but letting the merchants go would mostly likely result in the eruption of the military wrath of the Mughals against the British. He couldn’t risk that.

  But he didn’t want to offend the powerful merchant clans, so he told Bhimji that Bombay was not yet fortified enough to guard the merchants and their families. He suggested that “hereafter as occasion offered, they with more ease and security convey their estates and families to Bombay by degrees where they might assure themselves of all favour, friendship and freedom in their religion and encouragement in their trade as they could in reason [expect] from us.”3

  This was no time for, in Mehta’s words, a “post-dated cheque.” So on September 23 and 24, 1669, more than 8,000 merchant families left Surat for Bharaoch in Bombay.

  “The general strike followed by the merchants’ flight created such a tense atmosphere in Surat that the political authorities were forced to change their stand. The banias returned to Surat on December 20, 1669 only after the state assured the safety of their religion.”

  As Mehta notes, this was not only the first-ever mercantile strike in India, it was also entirely nonviolent.

  Not content to fight only the social ill of religious prejudice, 30 years later Surat’s merchants gathered to fight corrupt governance. In 1702, the governor of Surat and his partner in crime, a trader called Ahmad Chelaby, took Rs 85,000 from the banias, ostensibly to help defend the city against Maratha marauders. When they realized that they had been cheated, the merchants went on strike, lowering their shutters and forcing the administration to imprison Chelaby and return at least Rs 37,000.

  The idea that entrepreneurs—business people—can collaborate and push forward social reform is now lost in the venal crony capitalism of large portions of big business of India. Indian entrepreneurs seek tax benefits and reach out to manipulate laws to make windfall gains on land deals, but social reform does not, for the most part, keep them awake.

  Some of this disconnect comes from the late years of the independence movement against the British Raj. Even though Mahatma Gandhi had deep and enduring friendships with top entrepreneurs like the Birla family, the overall ties of the Congress Party, which led the independence movement, with entrepreneurs never went very deep.

  The historian Claude Markovits makes this point in his excellent book Merchants, Traders, Entrepreneurs: Indian Business in the Colonial Era. He points out that Indian Marxist historical writing, often the dominant point of view, “stresses the limitations of the Indian bourgeoisie without treating it as compradore.”4

  He writes:

  For these (Marxist) authors, the bourgeoisie could establish only a limited hegemony over the national movement, given an alliance with propertied elements in the countryside. The concept of “passive revolution,” borrowed by these authors from Gramsci, by which they define the Indian freedom struggle, serves to emphasize that neither the masses, in spite of their mobilization, nor the bourgeoisie, because of its own weakness, could give the national movement a clear direction for the radical transformation of the country either in a capitalist or socialist direction. The process was basically one of limiting popular initiative and maintaining the movement within limits that objectively suited bourgeois interests.

  Markovits says there are two problems with this reasoning. First, the Indian bourgeoisie barely existed as a defined class in pre-1947 (before independence) India, and the relationship between economics and politics in Italy was very different from the relationship between economics and politics in India.

  In India, the dominant ideology—which still had a powerful hold on the minds of even the members of the westernized elite—treated the economy as a simple function of the social and political order, and not as an autonomous domain. The attitude of the Congress leaders to Indian capitalists must be placed within this context. They believed in the primacy of politics over economics and therefore did not attach much importance to the precise nature of the economic regime of an independent India. They thought that the economy would somehow “follow” and that once the fetters of foreign domination were removed, it would become robust.

  It is this kind of loose nonchalance and lack of engagement that has, in some sense, led to the disconnect that exists today, so much so that in the 2014 elections, prominent political leaders regularly bashed the country’s top businessmen as corrupt and venal (sometimes quite correctly).

  Markovits points out that this pre-independence unease still echoes 60 years later. “Is it not possible to see in institutionalized corruption, the financing of political parties, especially the ruling party, by business houses, and state financial support to private ‘monopolies,’ the modern equivalents of the farming of tax revenue or of the granting of state monopolies to private firms?”

  This is why, in a sense, enterprise and social change so diverged in modern India. The tale of enterprise has been divorced from the larger sociopolitical tale of India—this is partly because some of the most successful entrepreneurial tales of the liberalization period that began in 1991, like the information technology (IT) companies such as Infosys, happened far away from the usual shenanigan-filled world of India Inc. (the term used to describe t
he aggregation of business houses in India). In fact, one prominent government minister even used to joke that the IT companies could grow swiftly because the government didn’t know much about them in their early years of the 1990s and 2000s.

  This is the story of that enterprise of the aam aadmi. India is unlikely to have a cohesive spring of revolt. How can we, in a country where land area under Maoist rebel control and shopping malls often rise simultaneously? What we are having is a daily climatic noon, somewhere in this vast nation, the total of V. S. Naipaul’s “million mutinies.” Except that it might not always be a mutiny but—that curious reality TV term—a makeover.

  But who are these mutineers? Consider this: India’s 7,000 biggest companies employ only around 7 percent of its workforce. The remaining 93 percent come from what is called the “unorganized sector,” a euphemism that straddles all the worlds from a roadside tea shop to a small diamond-polishing unit. There are about 30 million such units in India, each employing an average of seven people. This is the backbone of the Indian economy—reflected not in the stock markets but in the kitchens and keenness of aspiration in millions of homes.

  There are those who still hope for a China-style mass-manufacturing revolution in India. That is unlikely for many reasons—from disjointed, disparate landownership in India to family-run firms that lack capital or manpower to scale up. But something else is happening in India. Its village economy, which is home to 68 percent of the population and which brings in 50 percent of the GDP, is transforming. What was an income pyramid in 2010—with 50 million people earning more than $5 a day at the pointed tip, 350 million making between $1 and $5, and 400 million scraping by on less than $1 a day—is estimated to chisel itself into a diamond shape by 2020. This means 150 million people earning more than $5 a day, a fat rhombus middle of 500 million people making between $1 and $5 a day and 250 million taking in less than $1 a day.