INTRODUCTION AND SUMMARY

The underline objective of the book titled Merchants, Traders, Entrepreneurs: Indian
Business in the Colonial Era by Markovits, Claude1 and the book titled “The Promise of
Partnership: Indian Business, the State and the Bombay Plan of 1944” by Kudaisya, Medha 2
was to bring to light the evolution of the relationship between business group and the
government. The Markovits’ book in a structured manner and chronological order explained
the role of business class from pre independent India to the post independent India, precisely
it focused on the detailed analysis till partition. Further, being short of information regarding
the relationship of business class and dominant party back then i.e. Congress especially of the
pre-independence era, Markovits’ tried to fulfil the lacunae and thus gave substantial
arguments and information, for instance he explained the role of Gandhi in bringing together
Congress and Indian Capitalists.3 Later the book delved into the policies adopted by Congress
explaining about the stance of Congress with regards to labour class and the business class. It
also discussed on the constraints present in order to adopt an unequivocal stance with regards
to capitalists.4 While, Kudaisya, Medha discuss at length the ‘Bombay Plan’, as it was the
first time business group openly supported the nationalist cause.5 Further, while discussing on
it, she gave a brief about the historical and past relationship of the business groups and the
member associated with the plan. Thereafter, the article tried to analyse the potential
possibility of the socialist or leftist stance without compromising on the capitalist needs and
aspirations.
These two books thus gave an insight about the position of ‘capitalists’ and ‘labour class’
during the pre-colonial and post-colonial times. The topics discussed at length have relevance
with the business history subject, as they entailed the evolution of the relationship of
capitalist class and their relationship with the government, further also dealing with the
policies and acts adopted and organizations formed by the government. 6 Thereby, studying
the evolution of business and role of government policies and market trends. Through this
research note the student tries to critically analyse in detail contentions raised by the authors
in the respective books based on the objectives of the same as discussed above in three parts.
PART – I
This part will briefly deal with the early phase of pre-independence times. Both the books,
described the position of capitalist and their connection with the Congress. It was observed
that when the Congress was formed the business class was at infancy or dormant stage. It was
Gandhi’s intervention that the Congress connection was built up with the business Class. As,
Gandhi Ji was close to many businesspersons, such as Jamnalal Bajaj, Ambalal Sarabhai,
Mangaldas Girdhardas, Ardeshir Godrej, and from among the Bombay Planners, Birla,
Kasturbhai, and Thakurdas7 Gandhiji’s personality and place had majorly impacted the

1
Markovits, Claude. (2008). Merchants, Traders, Entrepreneurs: Indian Business in the Colonial Era.
Basingstoke: Palgrave MacMillan, pp.1-75.
2
Kudaisya, Medha. (2014). “ The Promise of Partnership: Indian Business, the State and the Bombay Plan of
1944.” Business History Review 88 (Spring 2014), pp. 97-131.
3
Supra Note no. 1, p. 5.
4
Id, p. 46, 48.
5
Supra Note no. 2, p.98.
6
See Bombay Plan, 1940; FICCI; People’s budget, 1947; INTUC.
7
Supra Note no. 2, p. 106.
businessman especially Marwaris, i.e. his Gujarati bania origin, his role as mediator in
Ahmedabad and South Africa.8 Thus, they also supported many Hindu causes like Cow
protection, propagation of Hindi etc. But the support was more or less individualized and not
institutionalized. During the times of Civil disobedience and 1932-4, support of the business
class was limited as there was split over imperial influence and Ottawa agreement. 9 Further
due to difference in caste and regional disparities major business groups were not able to
come to consensus with many nationalist issues.
PART –II
This part will deal with the scenario during the World War I and thereafter. It was during the
times of war that there was a shift in ideology of the government wherein Capitalists were not
merely considered as greedy or conservative banias but rather as paternal benefactors. They
were expected to be more inclined towards paying attention towards charities, social reform
activities and nationalist struggles.10 Further, the point to be noted is that war years were a
period of optimism for Indian Business. The prosperity of the war years can be gauged from
the fact that within the first year supplies for war purposes were estimated as 280,000 tons of
timber at the cost of 27.3 million rupees, cotton canvas and cotton-jute canvas valued at 27
million rupees, 12 million garments at 70 million rupees, tents valued at 50 million rupees,
120 million rounds of small ammunition, 400,000 filled shells and naval craft at the cost of
7.4 million rupees.11 P. S. Lokanathan, a key advisor to the Bombay Plan group, saw this as a
"structural change" in trade. Another optimistic point was that the change in relations with
Britain, country’s international debtor-creditor position.
The depression during the 1930’s affected the world economy majorly, countries like Brazil,
Australia strengthened their industries whereas Russia adopted socialism model. Thus it was
suggested the India should follow the same and leftist supported it. Capitalist by participating
in NPC supported the idea but not at the cost of compromising in entirety the private role. For
instance, an extract of a letter from by J.R.D. Tata to Sir Purshottamdas Thakurdas- “…One
of the principal tasks of the committee will therefore be to examine how far socialist demands
can be accommodated without capitalism surrendering any of its essential features.”12
Congress acquired major position or power in dealing with businesses because of its position
in majority of provinces in 1937-39, then again in 1946-7, further also during the time of
interim budget. Thus because of the influential position, the Congress was faced with the
dilemma to adopt policies in favour either Capitalists or labour class. The first constraint was
imposition of tax on affluent income of urbanities and EPT, which were retracted because of
the business class violent reactions. They were also not able to help the small and cottage
industries because of the same. The Congress also found support from the electorate in
reserved constituencies (which were majorly represented by Indian businessmen. Since ,
elections were on provincial basis therefore the support of businessmen was dictated on their

8
Supra Note no. 1, p. 5.
9
Supra Note no. 1, p.25.
10
Id, p. 13.
11
Supra Note no. 2, p. 115.
12
Id, p. 15.
relations with Congress in the provinces.13 (can remove it) Another constraint was the labour
disputes and strikes, labour movement (of 1920 and after 1935 precisely), Congress was
entangled in the whimsical stance. As –“ …The [Congress] organization as a whole did not
desire to alienate the vested interests. It was keen on retaining their friendship and
cooperation. The Congress ministries were, therefore, faced with a difficult task; they had to
do something to satisfy workers’ demands but they had to see at the same time that employers
did not get too angry or annoyed…”14 However, there was inclination towards protection of
interests of labour in initial period, thereafter there was shift and promulgation of a legislation
for prevention of strikes and lockouts. But finally with the situations that enfold during the
period of 1937-39 it can be concluded that Congress stance was a pro- capitalist stance.
PART - III
As discussed in earlier part, relationship of business group and Congress gained momentum
after world war, thus thereafter there was proposition of ‘Bombay Plan’, main goals behind it
were that it talked about institutionalized support from business group, it placed confidence
on business person and private sector regarding the economic future of the country and
further it suggested implied acceptance of partition of India. Thus, the objectives This
objective was to be actualized through a 130 percent rise in agricultural output (incorporation
of new concepts like cooperative farming), a 500 percent increase in industry (focused on
building base industries like power, mining, metallurgy) and a 200 percent increase in
services. The same was taken up seriously and it was evident from the Viceroy lord Wavell
creation of new planning and development department. Gandhi ji refused to comment on the
same. Along with the praises it received, there was equal share of criticisms, firstly it was
contended that the plan was based on prewar prices, secondly it was observed by one
economists that it is cranky and misleading monetary theory, which will produce wildest
inflation. (concept of created money).15 It was observed that five year plan was adopted on
the lines of Bombay plan but ran contrary to it especially because of strong nehruvian
ideology i.e. socialism.
CONCLUSION
Though there was not much inclination towards public-private partnership during nehruvian
times but after the post liberalisation it can be seen that the concept has been given much
weightage. As it can also be observed that during 2007-12 private sector contributed 36.6% in
overall infrastructure investment.16 Indian government has also laid framework for PPP
model (2004-12). Further the present India, it is not possible to see, 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.17Thus, the student submits that government is adopting a middle

13
Supra Note no. 1, pp. 29-33.
14
Id, p. 40.
15
Supra Note no. 2, p. 128.
16
Niti aayog site please get the citation wifi is not working.
17
Supra Note no. 1, p. 21.
path by accepting PPP model that is not giving up on the capitalist stance while promoting
social benefit.