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The New International, March 1951

Ashoka Mehta

Who Controls India’s Economy?

A Continuing Pattern of Concentration of Wealth


From New International, Vol. XVII No. 2, March–April 1951, pp. 110–120.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for ETOL.


The article which follows was written by the General Secretary of the Socialist Party of India, Asoka Mehta. Written as a pamphlet under the title Who Owns India, it was serialized during October and November, 1950 in the weekly paper of the party, Janata. The version appearing below is taken from the Janata articles. Several changes have been made of a purely technical nature for reason of space. Numerous tables of statistics and lists, as well as some of the more detailed explanations have been omitted. All money values have been translated into dollars reckoned at the current rate of exchange of one rupee to 21 US cents. No changes whatsoever have been made in the actual content of the articles, whether by omission or addition. We regret that we are unable to print them in full.

The first section of what follows was written before Indian Independence and therefore the references to the government of that day are to the Imperial British regime. What is of startling interest is that Janata could print these articles in the fourth year of independence without any fundamental editing for the economic reality has remained as Comrade Mehta described it originally.

The author has deliberately restricted himself to a morphological examination of Indian capitalism. It is necessary to remind American readers of what is implicit below: that more than 8 out of 10 Indians still live from agriculture and that this agriculture itself, which dominates the national economy, cannot be equated with anything of a similar name in capitalist countries. This other side of the Indian economic coin is still pre-capitalist, producing for local consumption rather than for the market, for simple exchange rather than for profit, and by means of human labor (occasionally aided by animal power among richer growers) with primitive tools hardly differing from those employed a millennium or two ago. The overwhelming mass of people live the narrowest, and most restricted lives surrounded by misery and dominated by a rapacious Zamindari landlord class. Independence has not altered their status nor has capitalism in India revealed the ability or will to eliminate this fundamental condition. To the contrary, as the author shows, there has occurred a growing-together of the capitalist and landlord classes so that the national incubus has already fastened itself on the new rulers, limiting their historic horizons from birth. Capitalism has become an ally of India’s backwardness and by so doing has limited its own potential.

The relatively extensive capitalist plant (India is the eighth most industrialized country in the world) should not blind anyone to its still basically colonial type economy. On a per capita basis Indian industrial manufacture is inferior to that of any capitalist nation, although quite superior to China and most other pre-capitalist nations. The National government has been unable to move away from this heritage. The capitalist class, as a result of the advanced senility described below, has become conservative in all economic matters even before it has grown to national dominance. The rate of capital formation is declining steadily and plant expansion is at an ebb. Everywhere in the capitalist sector, as in agriculture, there is stagnation.

A note on the Socialist Party of India: Formed originally as the Congress SP in 1934 as a moderate left faction of the independence movement, the present organization emerged from the Congress only as recently as 1943. It is, therefore in many ways a very young party. Its leadership, largely drawn from the intellectual middle class, remains basically the same as before the party’s separation. Which means that they are older men, experienced in Indian politics and known to large masses as established leaders. One of the party’s problems is the large scale recruitment of youth into the upper councils.

The present party is in other ways a far cry from the thin Social-democratic leaven it was before 1943. Since independence, and most especially since the death of Gandhi, it has tended to follow its own course and consequently has developed into the only real national opposition party to the entrenched and increasingly rightist governing Congress Party. It has run successful slates for various legislative bodies in Bombay, Madras, Bengal and elsewhere so that its voice is heard in the leading provincial parliaments as well as in the national assembly. Its electoral success has been most notable in Bombay and in the nationally significant by-election in Bengal during 1949 when the SP was the primary force behind a coalition of democratic and left groups which elected S.C. Bose against an all-out campaign by the Congress in which Nehru himself took the field.

While the party has a decided parliamentary orientation its activities are not at all restricted to it. The party engages actively in the daily problems of the people. Jaiprakash Narain, leading spokesman of the SP, is also head of the powerful Railwaymen’s Union and the party’s affiliated and sympathetic unions number about 750,000 members. One of the leading union federations is led by a coalition in which the SP is the dominant element. In many parts of the country there are Kisan Sabhas (peasant organizations) which adhere to the party in one or another way. Nevertheless, the party is weak amongst the peasantry and its program for agriculture is indefinite and varies from province to province, not so much with varying circumstances as with the nature of the local leadership.

Far from sufficient attention has been given to the peasantry. Among the workers, the SP is a growing force, in many cities a militant, fighting one.

The third group to which the party has directed its attention is the lower middle class and particularly the intellectuals, and with uncertain success. Certainly many intellectuals have joined the organization but it cannot be said to be the rallying center for the new national culture that is slowly emerging. Thus the SP has a way to go before it becomes the leading political force in the universities.

Programmatically, the party’s objective is to become the center for those classes to whom independence has brought frustration and hopelessness and in this sense it seeks to become the dynamic continuator of the Indian revolution. However, it is a party with more than one voice, containing many different outlooks on politics ranging from democratic liberals and moderate social democrats to people who are thoroughly devoted to the Socialist revolution, and also the Trotskyists.

The SP is the only vital and growing force in Indian politics today and it holds great promise for the future. It will undoubtedly make considerable gains in the forthcoming national elections. It will have a decisive voice in the first international congress of South Asian Socialist Parties which is to be held in Rangoon late this year. It is a party that deserves the fraternal regard of Socialists all over the world.


* * *

Although still a predominantly agricultural country, India now possesses many important industries. In jute and tea, she is a leading exporting country. In textiles, cement, sugar, paper and matches, we are nearing self-sufficiency. We have a growing iron and steel industry, rich coal mines and powerful hydro-electric plants. There are prospects of early establishment of automobile and shipbuilding industries.

There are nearly 9,000 factories in India giving employment to about 1,700,000 workmen. The capital invested in companies registered in India, totals up to $630,000,000.

The outstanding characteristic of our economy, as it has developed, is the concentration of control of industries in a few hands. A group of Managing Agents control about 500 industrial concerns, with capital of nearly $315,000,000, and covering every field of industrial activity.

This concentration of control is common to all industries. In Jute, fifty-three mills (capital: $37,000,000) of the total hundred mills (capital: $48,300,000) in the country are controlled by seventeen Managing Agents. Four of them control thirty mills. Of 247 coal companies (capital: $21,945,000) sixty companies (capital $1,898,000) are controlled by eighteen firms, four of them controlling thirty-one companies. In tea, 117 companies are controlled by seventeen firms, five of which control seventy-four tea companies.

Again just four firms control twenty-seven of the thirty-three minor railways in the country.

Similar concentration of control exists, with incidental variations, in sugar, engineering and other industries. Even in the cotton textile industry, a third of it is in the hands of fifteen firms.

In cement and matches, virtual monopolies have been established through unified control or ownership of the industries.

This concentration has been realized in various ways: by amalgamations, by absorption, more generally by expansion.

In the cement industry, the various cement companies with one exception have amalgamated to form a single joint stock company – the ACC. It has taken over the business, assets and liabilities of eleven cement companies and controls works situated at fourteen different places in India. The Company also owns substantial interest in the Buma Cement Co., Ltd.

The formation of the ACC was preceded by the organization of the Cement Marketing Company of India Ltd. Similar attempts of centralizing, marketing and restricting production, are being made in tea, sugar, coffee, coal and jute.

Another important method of achieving concentration of control is through absorption – a giant buying up its smaller rivals or obtaining control over them in less direct form.

The Scindia Steam Navigation Company, for instance, controls in one form or another the Ratnagar Steam Navigation Co., the Bengal-Burma Steam Navigation Company Ltd., Indian Co-operative Navigation & Trading Co., Ltd., and the Bombay Steam Navigation Co., Ltd.

In the match industry the rivals that refused to surrender were, under the relentless pressure of the Swedish Trust and their Indian subsidiaries, mostly driven out of the business.

Industries have their Napoleons and Hitlers – and also their Seyss-Inquarts! [Austrian traitor and Quisling who supported Hitler.]

These, however, are the instances of horizontal combination. There are other forms of Trusts also.

The British India Corporation is an instance to the point. It was formed in 1920 to take over the control of:

  1. The Cawnpore Woolen Mills
  2. The Cawnpore Cotton Mills
  3. New Egerton Woollen Mills
  4. North-West Tannery Co.
  5. Cooper Allen & Co. (One of the biggest army leather equipment and boot manufacturers of the world).
  6. Empire Engineering Co. (since closed down).
  7. G. Mackenzie & Co. Automobiles, etc.

This huge combine (present capital: $2,625,000) is managed by a single Board of Directors.

There are forty Trusts of this, or even bigger, dimensions. They control about 450 concerns whose total capital exceeds $231,000,000. Thirty of these Trusts are with capital over $2,100,000 and five of them have capital exceeding $10,500,000.

The leading Indian Trusts are:

  • Tata Sons & Co.
  • Birla Bros., and
  • Dalmia, Jain & Co.

Walchand’s and Karamchand Thapar’s concerns are fast expanding and they will soon reach the status of Trusts.

The British Trusts are increasingly becoming mixed – almost all of them have some Indian share-holders and Directors. Mukherjees have a substantial holding in Martin Co. The Maharaja of Darbhanga holds big interests in the British India Corporation and Octavius Steel & Co. Villiers & Co. is fully under Indian control.

From the workers’ point of view an Indian Trust is often a worse master than a British Trust. The conditions of the workers of the Dalmia Sugar Mills, for instance, are inferior to those existing in the Belapur Mill of Brady & Co. In British Trusts there is exploitation plus drain [extraction from the country of its profit and wealth by the imperialist – Ed.]. In Indian Trusts, perhaps intenser exploitation but little drain.

The Trusts have mainly developed through expansion and not so much through amalgamation or absorption. The pioneer industrialists, mostly British, made huge profits. The accumulated profits enabled them to spread out in all fields. In the early days, the jute mills paid dividends, after transferring considerable amounts to the Reserve Funds, from 100 to 300 per cent – they “simply coined money.” Tea companies also made enormous profits, in many cases paying dividends over 100 per cent. These huge profits went to expand the empires of these Trusts.

As a case study let us briefly review the history of the great Sassoon family – unroll the colorful tapestry of that fabulous clan.

David Sassoon, a wealthy young Jew of Bagdad, migrated to Bombay in the thirties of the last century. He liked the place and founded here the firm of David Sassoon &c Co. He started with a rug factory and a banking establishment. (The Sassoon Bank, a private concern, ultimately had capital of $2,100,000). The most thriving trade at the time was the opium trade with China. David Sassoon entered it and in due course obtained the monopoly of export of opium to China. His son Elias was sent to China where he succeeded, among other things, in obtaining monopoly control over the import of opium to China.

The two ends of this enormously profitable trade were thus controlled by the Sassoons.

Elias on returning to India founded his own firm, E.D. Sassoon & Co. which worked in friendly co-operation with his father’s firm, both here and in the Far East. David was succeeded by his son Albert Abdulla. He expanded the business in every direction. He went heavily into the textile industry, he constructed the first floating dock east of Suez, the Sassoon Dock. On his retirement he settled down with a baronetcy in England, where his brother David Jr. had preceded him. The family was growing out of its colonial stature.

The business in Bombay was carried on by brother Solomon who besides conducting the family’s banking business, was the Chairman of the Sassoon Cotton Mills, Sassoon Silk Company, the Oriental Life Insurance Company, and was a trustee of the Bombay Port Trust and a director of the Bank of Bombay.

But the main branch of the Sassoon family was now in England. Sir Edward Sassoon (Albert Abdulla’s son, born in Bombay) married Baron Gustave de Rothschild’s daughter thus uniting a mighty Oriental House with the foremost banking family of Europe. Needless to add, Sir Edward was elected to the House of Commons – then the exclusive club of Britain’s aristocrats!

Sir Edward was succeeded by his son Sir Philip who inherited his seat in Parliament also. The financial wizard of the family, however, was Sir Victor Sassoon who further extended the empire of the Sassoons. Siegfried Sassoon, the fox-hunting poet, held the fort on the culture front.

The scions of an obscure Levantine Jew today make headlines in relation to British Empire politics, sport, literature and finance – all on the strength of the fabulous fortune made in commerce and industry in India and the East.

Other nabobs have a similar tale to tell. While we may not trace their history, let us at least note the extent of their empires.

In Western India, the Tatas, Killick, Nixons, Sassoons, and Bradys dwarf, with their huge financial strength and industrial ramifications, their humbler rivals.

But this is not the whole story. We have now reached the stage where Trusts are amalgamated with or annexed by bigger Trusts. Recently Martin & Co., took over the control of Burn & Co. – itself a Trust controlling four concerns (Capital $21 million). Not a few of these Trusts are controlled by super giants of London. Mackinnon Mackenzie & Co., (Jute Mills, Calcutta), Binny & Co., (Cotton Mills, Madras and Bangalore), the Allahabad Bank, the BISN Co. – each a giant in its own right, are controlled by the mighty Penninsula and Orient Co.

It is also necessary to note the growing inter-relationships between the Industrial Trusts and the Feudal Interests. Some of the Trusts control zamindaris and some of the zamindaris hold big interests in the Trusts. The Maharaja of Darbhanga possess substantial shares in the British India Corporation and Octavius Steel & Co. The Maharaja of Gwalior is one of our leading financiers.

The control of our industries is gathered up not only in a few Trusts but in a few hands. In the Jute industry 132 men hold 271 directorships – ten of them hold 87. Three hundred and eighty-nine directorships of the tea companies are held by sixty-six individuals, twelve of whom hold 184, seventy being with just three men.

The concentration of control is further heightened by interlocking directorships. The various Trusts are interlinked by a group of common directors. This device puts the control of our industrial economy in still fewer hands.

Five hundred important industrial concerns of our country are managed by 2000 directors. These directorships are held by 850 individuals. But 1000 of these directorships are held by just seventy men, the other thousand are distributed among the remaining 780 directors.

At the apex of this pyramid stand ten men holding three hundred directorships – the supreme arbiters of the destinies of our industrial economy.

850 men hold 2000 directorships


– average



  70 men hold 1000 directorships

– average


  10 men hold 300 directorships

– average


Such is the shape of the pyramid.

Every trust maintains close connections with banks and other financing houses – usually through the device of common directors. Important Trusts have extensive connections. The leading directors of the Tata concerns are on the Boards of the Reserve Bank, the Imperial Bank, the Central Bank of India, the Bank of India, the Bank of Baroda and the Union Bank. Other Trusts have banking affiliations according to their stature.

A dozen individuals, by their control over banks, insurance companies and investment trusts, occupy commanding positions in the industrial life of Bombay. Sir Purshottamdas and his cousin, Sir Chunilal, between them hold directorship in every Trust and in well nigh every important concern in Bombay. They have facilitated or frustrated as it suited them many an amalgamation and absorption. Premchand brothers, Jeejeebhoy brothers, Cowasji Jehangirs, in their ways, exert similar influence thanks to their financial power.

Insurance companies sweep together the savings of the Little Man and bring them to their controlling Trusts. Birlas have a string of insurance firms. Dalmias have their Bharat, Tatas have an insurance company and an investment trust. Insurance and investment firms that are independent of the Trusts like the Oriental Insurance Co., Vulcan Insurance Co., Industrial Investment Trust, have not escaped the control of the group of Finance Capitalists that dominate the Trusts.

An adequate idea of their financial strength cannot be had by us listing the various concerns controlled by them or by totaling the capital of those concerns – it is the block account that needs to be calculated. The Tata Iron & Steel Company – a combine controlling iron, coal, mica, silica mines and a number of industrial concerns has capital of about $21 million, but its block account is about $60 million. The total assets of the concerns controlled by the Tatas exceed $210 millions. (Sir Purshottamdas, Sir Chunilal, Sir Cowasji) control and direct capital accounts of tens of millions of rupees. Such is the financial might of our oligarchs.

The oligarchs of our economy are, however, only dwarfs before the leaders of the world’s finance capital. Our important Trusts are often subsidiaries of subsidiaries, e.g., Andrew Yule Co., is controlled by Morgan, Grenfell Co. – the English subsidiary of the House of Morgan! Before the might of Morgans and Mellons our oligarchs look puny, but that is a commentary on our economy and not on their ability or will to power.

John D. Rockefeller, Sr., and J.N. Tata were born in the same year, 1839. In the intervening century, American economy, thanks to its favorable circumstances, expanded, in comparison to the development of Indian economy, on a colossal scale. That is patent to all. But the most arresting fact is the close similarity in their developments.

American giants and Indian dwarfs have sketched the same pattern in growth: industries controlled by a few Trusts, which in their turn are controlled by a group of finance-capitalists.

Because the control is in the hands of a handful of men, it does not mean that there is peaceful cohabitation among them. There is collaboration here, conflict there. Competition among the Trusts is a subject for an independent enquiry. However, a sharp struggle for further concentration of control ceaselessly goes on and the oligarchy inexorably strives to grow smaller.

The annual profits of the Tata Iron and Steel Company equal the total revenues of the Government of Bihar. And it is just one of the Tata concerns! We demand democratic control over the finances of the Government of Bihar, shall we let the industries remain under the unchecked control of their oligarchs?

The oligarchy is a closed preserve. The son succeeds the sire. It is generally so in every country but in India it is particularly so. Sons and relations – community men at the farthest – reach “the height of Simla.” Fresh blood finds it as difficult to enter the oligarchy as the proverbial camel the eye of a needle.

These oligarchs, able, honest, hardworking and public-spirited though they be, primarily act, after the laws and logic of capitalism – in their own interests. Of course, they will argue a la Adam Smith, that in serving their private interests, through some divine alchemy, they also further public weal. Shall we accept the furtherance of the public weal merely as a by-product?

Industrial expansion is today no longer in the hands of rugged entrepreneurs – men of foresight, ability and skill – but it is with a group of finance capitalists. Financing of industries and centralizing of control are their main functions – and they are essentially social functions. Can they be left unchecked in the hands of private citizens?

But until the state itself is democratically organized there is no sense in urging for a policy of social control. We have seen that the present British Imperial – ed.] Government has sought to remove the State owned railways from all democratic control.

The [Imperial General – ed.] Government is alien and irresponsible. Through many decades of its existence it has shown itself to be not only unsympathetic but hostile to Indian aspirations. It has been the custodian of British Interests. To hand over the control of our industries to it would be to undo the work of generations of patriots. With this Government, our policy must be of cent per cent Swadeshi [1] and not of State-control.

But India is on the threshold of great changes. Her Government cannot long remain irresponsible. When independence is achieved the issues raised in this little booklet will become relevant, perhaps urgent.

Indian economy has reached a stage where, in an unplanned and privately owned way, it can scarcely hope to grow. There is a demand from all hands for State aid and direction. If such aid and direction are to be given, should they not be in the interest of the bulk of the people – directly and not just as a by-product of the entrepreneurs’ pursuit of their profits? Today State control is very necessary, but unless it is social control – a democratic State controlling industry and not vice versa – such control will dismally fail to improve the condition of our people.

In the Free India of tomorrow [after independence – ed.] our industries cannot be left to the unchecked control of private citizens. They will have to be democratically organized and socially controlled.

During the forties, when the war fires were blazing, not only the industrial economy underwent many changes, but there have been far-reaching political developments in India. These changes and developments have inevitably left their impressions on the ownership and control of industries.

The Government of India have recently started the publication of census of manufacturers. So far, the census for the year 1946 has been published. The census unfortunately, covers only the eleven provinces, and not the [Princely – ed.] States, and just 29 industries, and the information is listed for 80 per cent of the registered factories. Subject to these qualifications, the following picture emerges of the extent of industries in 1946.

No. of Regd. Factories


Capital Invested

$770 million

Persons Employed


According to another source, total capital invested in companies registered in India comes to $935 million.

The fact of concentration of control once again emerges. A group of Managing Agents control about 400 companies with capital resources nearing $420 million, and covering every field of industrial activity.

This concentration of control is common to all industries. In June 63 per cent of the capital invested and 64 per cent of the companies are controlled by only eight Managing Agents. [2] Three of them control 27 companies. The coal industry is virtually controlled by 21 Managing Agents, six of whom control 62 per cent of the capital and 56 per cent of companies engaged in the industry.

Of the total 248 Managing Agents analyzed, 164 control just one company, 42 control more than one but less than five, while the remaining 38 control above five companies.

The capital controlled by the trusts exceeds $315 million.

During the last decade the process of amalgamation of trusts has continued. Bigger trusts have absorbed smaller trusts and thus have become even more powerful. McLeod & Co., a managing agency house controlling 39 companies, bought up in 1947 Begg, Dunlop, which controlled 25 companies. The British India Corporation has taken over Begg, Sutherland Co., which controlled 10 important companies, two in cotton textiles, six in sugar and two in engineering. Bird & Co. has taken over F.W. Heilgers arid thereby extended its control from 19 to 30 companies. Barry Co. and MacNeil & Co. have combined, 49 per cent of their shares are held by the Tata Industries; Kilburn & Co. has been made a subsidiary of the new giant.

Sometimes trusts have not been absorbed, one into the other, but have combined to form a new and a larger concern. In 1946 Jardine Henderson & Co. was formed to acquire the business of Jardine, Skinner & Co., which managed 16 companies, and George Henderson & Co. that managed 10 companies.

Through cornering of shares, in some case, effective control has passed into the hands of a Trust, though the earlier facade of a different Managing Agent remains.

In the case of Century Mills, one of the best textile mills in Bombay, the Managing Agents continue to be C.V. Mehta & Sons, but effective control has passed into the hands of Birla Bros.

In these and other ways concentration of control has taken big strides in the last decade. During the last decade many independent concerns, sometimes belonging to Europeans, sometimes owned by Indians, have changed hands. These sales in some rare cases have weakened a trust, but in most cases, such transfers have strengthened concentration of control.

The classic instance of weakening of a Trust is that of E.D. Sassoon & Co. The mills owned by the Trust have passed into Indian hands. Though a large part of the mills were taken over by Agarwal & Co. and form the combine known as India United Mills, some of the Sassoon mills have passed into other hands also; e.g., the Mayer Mills have been purchased by Ram Ratan Gupta. E.D. Sassoon & Co., whose history of over a century was described, has thus come to the end of its voyage.

But most purchases have strengthened the tendency towards trustification. In the immediate post-war period, so frenzied was the expansion of established Trusts that printing presses, hotels, restaurants, film studios and laboratories – almost any business, no matter how small or peripheral – was taken over by one or the other industrial giant. The overall concentration in the last decade has, therefore become greater than before.

Most of the important princely States were associated with banks named after them, and through these the resources of the feudal chiefs were mingled with the resources of industrial barons, controlled by the latter. The intimate relationship between the [Princely – ed.] State and industrialists is well brought out in Hyderabad.

The Hyderabad State Bank, wherein the trusts as well as the Government were jointly interested, had resources exceeding $1,800,000. It will also be recalled that in the Government of the State before the police action [3] both Laik Ali and Pingle Venkat Ram Reddy held important positions.

In other States, the relationship between industrialists and princes may not be so blatantly obvious, but there is no doubt that close relationship has existed, and the State Banks have played their part in cementing this relationship.

During and after the war a number of British concerns passed into Indian hands. Rapid political changes in the country and the inflated price obtainable for industrial concerns induced many British industrialists to unload their investments and hand over their controlling interests to new hands. In some cases these sales and transfers brought new men on the scene. British trusts, in response to the changing times, allowed a substantial share of the equity to pass into Indian hands and took Indians as directors and partners. Not only in the Managing Agency, but on the board of individual concerns also, more and more Indians began to appear. [4]

It would be wrong to conclude from the above that British and foreign capital is withdrawing from India. It undoubtedly is yielding place to Indian capital in old established industries, like cotton, jute, textiles and other light industries. But in heavy industries like chemicals, automobiles and machinery, new enterprises are being established by foreign capital, generally British and American. In automobile industry alone, manufacturers of Morris, Austin, Standard, Hillman, Chrysler and Studebaker have entered into agreement with Indian subsidiaries.

Till 1946, the trend of foreign investments was toward light industries, in twenty years previous to 1946, the investments in mining and quarrying had gone down by 26.7 per cent, in chemicals and allied trades by 22.3 per cent and they had gone up by 22 per cent in miscellaneous trading and manufacturing and by 167 per cent in breweries and distilleries! These changes notwithstanding, the pattern of distribution of foreign capital in different industries remained basically the same from 1925 to 1946.

Since then, in response to the changing pulse of political developments, a decisive shift has taken place. Some British companies are setting up their Indian subsidiaries, e. g., Coates, Exide, Goodyear Tyre, Cadbury, Fry. But the more important firms are coming to India through Indo-British partnerships. While a few of these partnerships are with new industrialists, in most cases they are with established trusts.

Nuffield-Birla, ICI-Tata, Chrysler-Walchand are the most obvious among the illustrations. Birla Bros. have entered into an agreement with Babcock and Wilcox, a British firm, for the manufacture of smoke tube boilers and ancillary plant.

The Indian trusts are thus becoming more entrenched, and getting affiliated with bigger international cartels and concerns. Free India’s climate has so far proved wholesome to the trusts and tycoons!

Indian capitalism without having materially expanded production or improved the standard of life of the people, has reached the same degree of concentration as is seen in, say, Canada. There 651 corporations, with gross assets of 19,784 million dollars, control the various branches of Canadian economy. The non-financial corporations are 460, with gross assets of 7,965 million dollars. Of these just a hundred account for assets worth 6,969 million dollars, or 86.9 per cent of the total assets.

India, on a lower level of economic development has reached the same high degree of concentration.

The crux of an economy, it is now realized, resides in control rather than ownership. Whatever be the situation as regards ownership of industrial enterprise, control is securely gathered in a few hands.

Through control of newspapers – Dalmia Jain through the Times of India, Birlas through the Hindustan Times, Leader, Searchlight and Bharat – the captains of Capital are extending their influence into other fields. Their financial contributions influence, subtly but surely the decisions and policies of a great political party [the Congress Party – ed.]. Through their irresponsible power, generally hereditary, a score of men today arbitrate the economic destiny of India.



1. Swadeshi cannot be exactly translated into a single word English equivalent. It means “of one’s own country” or national in spirit. Gandhi’s well-known cloth of village manufacture as against British imports was called Swadeshi.

2. Managing Agents are companies organized for the purpose of actually managing enterprises for absentee or corporate owners, in most instances superseding the owners in both power of control and wealth. Probably nowhere else in the world had this particular form of economic parasitism developed so extensively as it had in India. The Managing Agents still dominated large areas of Indian capitalism – Ed.

3. Political action refers to the military steps taken by Delhi under V. Patel in 1950 against the Nizam of Hyderabad to bring that state into the Indian Union. Incidentally, the CP played a particularly reprehensible role in the affair.




No of Directors in 1939

No of Directors in 1949







Coal Companies





Jute Companies





Engineering Co.





Miscellaneous Co.




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