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88 pages

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In the nineteenth century, a tiny community from the deserts of Rajasthan spread out to every corner of India. The Marwaris controlled much of the country s inland trade by the time of the First World War. They then turned their hand to industry and, by the 1970s, owned most of India s private industrial assets. Today, Marwari businessmen account for a quarter of the Indian names on the Forbes billionaires list.// What makes the Marwaris so successful? Is it their indomitable enterprise, or their incredible appetite for risk? In this new book, Thomas Timberg shows how the Marwaris rely on a centuries-old system for conserving and growing capital which has stood them in good stead, alongside a strong sense of business ethics which has earned them respect.// Family businesses in general and the Marwaris in particular might have a vital role to play in shaping India s economic future.

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Publié par	Penguin Books Ltd
Date de parution	22 mai 2015
Nombre de lectures	0
EAN13	9789351187134
Langue	English
Poids de l'ouvrage	1 Mo

Informations légales : prix de location à la page 0,0600€. Cette information est donnée uniquement à titre indicatif conformément à la législation en vigueur.

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Thomas A. Timberg

The Marwaris
THE STORY OF INDIAN BUSINESS
From Jagat Seth to the Birlas
Introduction by
Gurcharan Das

Contents

About the Author
List of Maps
List of Family Trees
Introduction by Gurcharan Das
1. Preface
2. The Beginning of the Bazaar Economy
3. The Marwaris, the Bazaar Economy and the British Raj
4. The Marwaris in Independent India: in Traditional Industries and Sunrise Sectors
5. Do the Marwaris and the Bazaar Economy Still Shine After 1991?
6. What Produces Business Success: Lessons Learned
7. Conclusion: What are the Marwaris left with?
Afterword
Notes
Bibliography
Acknowledgements
Follow Penguin
Copyright Page
PORTFOLIO
The Marwaris
THOMAS A. TIMBERG is a scholar and consultant on economic development. His writings cover subjects ranging from Baghdadi Jews in India to contemporary microfinance and Islamic finance. His Harvard doctoral dissertation was on the Marwaris as industrial entrepreneurs, and he has continued to follow the affairs of the members of this community.
GURCHARAN DAS is a world-renowned author, commentator and public intellectual. His bestselling books include India Unbound and The Difficulty of Being Good ; his newest book is India Grows at Night . A graduate of Harvard University, Das was CEO of Procter & Gamble India before he took early retirement to become a full-time writer. He lives in Delhi.

List of Maps
Marwari Presence in India Shekhawati Region Jhunjhunu District Western Rajasthan

Marwari Presence in India

List of Family Trees
The Tarachand Ghanshyamdas Family Tree
The Birla Family Tree
The Ramdutt Goenka Family Tree

Introduction
‘The thrill, believe me, is as much in the battle as in the victory.’
—David Sarnoff, 1891–1971
One sultry evening in 1971, I ran into Tom Timberg in Bombay. I recognized him right away from my days at the university. He was fair and tall, and stood out in the crowd at Chowpatty, his shock of brown hair flying wildly in the strong breeze. He was returning to the US after a year in Rajasthan and Calcutta, having completed research for his PhD dissertation on the rise of Marwari merchants. His enthusiasm was infectious and I took him home, and he found in me a good listener. I was fascinated by his riveting account of how a tiny community from the desert sands of Rajasthan had spread out to every corner of north, east and central India, settling in thousands of villages and towns in the nineteenth century. With their enormous appetite for risk, the Marwaris controlled much of India’s inland trade by the end of the First World War. Gradually they turned to industry after the war, and by 1970 they controlled much of the nation’s private industrial assets, and by 2011 the Marwaris accounted for a quarter of the Indians on the Forbes list of billionaires.
Timberg and I talked late into the night but his account had only reached the 1930s. I was amused at the thought of this irrepressible brown-haired ‘yogi’ travelling from one district to another in north-west Rajasthan, poring over the commercial records of this quiet and secretive community. I must have ingested a fair amount that evening for I remembered some of his anecdotes when I wrote India Unbound a quarter of a century later. The crucial question he posed that night is the same one that hangs over this book: What makes Marwaris so successful? He wrestles with it in a different manner than his earlier work as he brings the Marwari story to date.
Timberg said to me that night that a nation needs many things to succeed economically, but the most important of all is the entrepreneur. An entrepreneur takes great risks when he combines the factors of production—capital, labour and land—with technology. His argument amounted to a challenge to Max Weber’s famous thesis, which argued that the industrial revolution did not come to India partly because the traditional Indian businessman lacked the ‘Protestant ethic’ of thrift, hard work and rationality, which had helped northern European and American businessmen to accumulate capital and exploit the new technology of the steam engine. Timberg claimed that India was equally blessed with the Marwaris, Banias, Jains and other business communities whose work ethic could be as effective as the Protestant’s. India required craftsmen, scholars, public servants, but it also needed merchants. The pursuit of artha , economic well-being, was the traditional dharma of the Bania. This was not an intuitive idea to the socialist mind of the twentieth century. Thus, Mahatma Gandhi and others had to remind Indians during the freedom struggle about the rightful place of the businessman in nation building. It also became a theme in early-twentieth-century Hindi literature during the freedom struggle when Maithili Sharan Gupt, for example, wrote, ‘After “made in India”, let India everywhere appear.’
Old and New Prejudices against Money
When I was growing up I knew the Marwari only as the furtive shopkeeper around the corner in villages and towns dotting India. Like the Jew in Europe, he was the last-resort moneylender who charged vicious rates of interest, dispossessing widows of their land and their jewellery when the loan was not repaid. This old prejudice intensified during our ‘socialist age’, during the first forty years after Independence. It was only after 1991 that our perception of the Marwaris and business people began to change. By and large, the Marwaris have not enjoyed the social status that they have yearned for. My own view changed dramatically when I entered the world of business in Bombay and discovered how much they were revered and even feared for their enormous commercial skills and talent.
A successful merchant has always provoked envy and it is not surprising that the Marwaris have been at the receiving end of resentment and even loathing, especially in Bengal where they achieved their greatest success. Timberg once related the story of a boarding house in Calcutta where he stayed in 1970 at the height of the Naxalite insurgency. Also residing there were two tenants, a Marwari and a Bengali. The Marwari was a heavyset insurance salesman from Bikaner, energetic, enthusiastic and loud. The Bengali tenant, annoyed by his buoyancy, burst out one morning: ‘The Naxalites will surely get you one day, you Marwaris!’ To which the insurance man replied calmly, ‘Before they do, we will join them.’ The answer reflected the supple nature of the Marwaris, and indeed of most business communities. Their ability to adapt to situations and a flexibility of mind are surely important traits responsible for their extraordinary success.
When I met Timberg in Bombay in the 1970s, many believed that the Marwaris had been great beneficiaries of the socialist ‘Licence Raj’. In fact, R.K. Hazari in his famous Monopolies Inquiry Commission report in 1967 indicted them for having taken advantage of the licensing system by cornering licences, which limited competition in the market. This report led to the dreaded Monopolies and Restrictive Trade Practices (MRTP) Act, which penalized an entrepreneur for producing beyond his licensed capacity—this at a time when the country was starved for the supply of almost everything. I recall at the time that there had been an unprecedented cold wave and sales of Vicks VapoRub, one of the leading products of my company, had risen dramatically. I was warned by our lawyers that we might have to go to jail for ‘exceeding our licensed capacity’. Instead of promoting competition, MRTP raised barriers to entry and ended up promoting monopoly. No wonder it is remembered as one of the most oppressive faces of our socialist age.
I primarily disagree with the conclusions of the Hazari commission. I feel that the Marwaris lost out during the forty years of the socialist licensing. Since market share was won in a bureaucrat’s office when a licence was acquired, it distorted a businessman’s behaviour. Instead of focusing on the market, the businessman applied his talents to managing the government. Competition is the school in which companies learn to perfect their skills. By closing the economy and discouraging competition, socialism made Indian business houses complacent and insensitive to customer needs. They lost the incentive to improve their products and acquire marketing skills. When the economy opened in 1991 and markets became increasingly competitive, the old business houses were suddenly in trouble. They had to relearn business skills and it took them more than a decade to do so.
Timberg in his present volume returns to these themes forty years after his first book on the Marwaris appeared on the stands in the late 1970s, in English and in Hindi. He now inquires whether the Marwaris will continue to play a large role in the future and how they will serve India’s development in the twenty-first century. Although Timberg specifically asks this of the Marwaris, one can extend it to India’s other traditional business communities. A way to ponder on this is to ask another question—if over sixty countries introduced the same reforms as India did in the early 1990s, why then did India become the world’s second-fastest growing economy in the first decade of the twenty-first century? My own hypothesis is that India has been fortunate in having communities who for centuries have known how to conserve and grow their capital. When opportunities arose, they responded. If you set in motion liberal reforms in such a society, you will get a ‘bigger bang for your buck’, as the Americans put it. This is borne out by the fact that 67 per cent of the Indian billionaires on the Forbes list for 2011 had a surname from a traditional business community. This is, of course, politically incorrect thinking, suggesting that o