The demise of the Indian corporate tycoon Ratan Tata at the age of 87 has naturally provided the occasion to recount the role of the person and the phenomenon called the Tatas in modern Indian history. But not surprisingly, the media was full of hagiography and glorification of the Tatas. What was surprising was the uncritical endorsement, especially Ratan Tata, even by a section of the Left and the socialists.
This could be broadly because of these few reasons: Tatas are generally believed to have played a nationalistic role in the country’s struggle for independence. There is a popular belief that Tatas helped the Indian economy by producing salt to satellites. They followed ethical capitalistic practices in corporate governance, unlike Modi cronies like Adanis and the Ambanis. They helped the country through their charity and developmental works in establishing premier institutions of learning, etc., and lastly, the refusal to critique capitalism in a post-91 world and search for the alternative.
But a dispassionate analysis of the phenomenon of Tatas from JN Tata to Ratan Tata, with a people's perspective devoid of jingoism and capitalist adoration, would provide a different picture of the Tatas contrary to the mainstream wisdom of media and the state.
This article tries to focus on the other side of the Tatas based on the available scholarly and journalistic studies about Indian capitalism and the Tatas in particular.
Two basic myths about Tatas need to be probed: Were Tatas nationalists? And does their practice in terms of corporate governance, manipulation of state patronage, and their relationship with workers, nature, and society ever be categorised as ethical?
Were the Tatas anti-British nationalists?
The historians of the growth of Indian capitalism under British colonialism, like Amia Kumar Bagchi, Mircea Raianu, Suniti Kumar Ghosh, and others, have irrefutably established the patron-client relationship between British colonialism and the Indian mercantile capitalists who later evolved into industrial capitalists at the behest of and the support of British colonialism.
In a scholarly article, Trade, Finance, and Industry in the Development of Indian Capitalism: The Case of Tata, based on the primary and secondary sources, Prof Mircea Raianu explains how the father of the founder of Tatas, Jamsetji Tata Nusserwanji, first accumulated capital as a contractor during the British occupation of the Persian Gulf port of Bushire in early 1857 and how he later expanded his trade by opening a branch in Hong Kong, importing Indian cotton and opium and exporting Chinese tea, silk, and gold.
Colonial capitalism de-industrialised India by making it a captive and dependent market for British goods and a supplier of raw materials to industrial Britain at a cheaper price. The destruction of native Dhaka muslin industry in eastern India and the punitive measures taken against Dhaka entrepreneurs need to be contrasted with the establishment of the first ever cotton mills in Nagpur by the Tatas in the name of Empress Cotton Mills’, in honour of Queen Victoria. This explains the political nature of the relationship between the small and nationalist entrepreneurs of East India and the big capitalists like Tatas.
Likewise, labour historian Dilip Simeon, in his seminal work The Politics of Labour Under Late Colonialism: Workers, Unions, and the State in Chota Nagpur 1928-1939, provides further details of how this special relationship between Tatas and the British colonialism worked against the interest of the people of the country and for the benefit of the Raj. The British provided 25 sq km of land to Tatas to establish TISCO (1911) under the Zamindari system, foregoing all revenues. They were also given full municipal control over the city (Jamshedpur), which continues even to this day. In turn, 100% of the steel that TISCO was producing went towards the British war effort after the First World War broke out. These were consumed by the railways or for the manufacture of building materials, armaments, etc.
Scholar Mircea Raianu recounts how the early Tatas obtained super profits by supplying to the colonial British regime’s repressive efforts in today's Ethiopia. Their role during Indian Independence was anything but nationalistic, like any of the other big capitalists like Birlas, who accumulated their primitive capital by supplying to and strengthening the British Raj.
Mixed economy - Bark of socialism and the bite of capitalism
The first few decades of the post-Independence story of the Tatas growth is a defining example of how the constitutional obligation for the creation of an Indian welfare state, if not a socialist state, was highly compromised for the nurturing of relatively weak private capital with state support in the name of a mixed economy. Tatas and Birlas, who were the then cronies of the Nehru era, were the major votaries and beneficiaries of this oxymoronic mixed economy.
While the mixed economy was misnomer to protect private capital from nationalisation, which was an important aspect of decolonisation of that period, planned growth was an euphemism to strategise public finance to promote private capital. This was evidently expressed in the post-47 regressive tax regime, which reduced the burden on the rich and taxed the poor heavily. Thus, the indirect taxes, which accounted for 60% of total taxes in 1948, rose to 72% by the end of the Nehru regime. Indira Gandhi followed in his footsteps. A decade into her rule, the figure stood at 84%, explains scholar Pratinav Anil in his research paper ‘India: The Myth of Congress Socialism’. Likewise, Prof Vivek Chibber, in his study on State Building and Late Industrialisation in India, shows how the big capitalists, like Tatas, opposed a strong developmental state and welfareism.
Emergency and unethical Tata memorandum
This mutual dependence of big capital, state, and political class clearly came out during the Emergency, which was considered by many progressives as an authoritarian but socialistic endeavour by Indira Gandhi. In fact, her economic policy during and after the Emergency was completely inspired by the Tata memorandum submitted to her in 1972.
Christophe Jafferelot and Pratinav Anil, in their seminal work, India’s First Dictatorship: The Emergency, 1975-77, describe how, following the Tata memorandum, Indira Gandhi offered capitalists significant concessions: top tax rates were cut, exemptions for business entertainment expenses introduced, capital gains and corporation taxes slashed, nationalisation put on the back burner, dividend ceilings removed, excise duties lowered, investment allowances increased, strikes banned, unions crippled, and licensing selectively liberalised during the Emergency.
Mircea Raianu sums up how the memorandum was “… an audacious plea for partnership that rested not on competition and the free market but on the co-option and subordination of the state to the productive powers of big business.”
In his book, Prof Raianu recounts how JRD Tata openly praised the Emergency for its “refreshingly pragmatic and result-orientated approach” and that he was pleased the trains were running on time and he could finally leave his house without fearing “strikes, boycotts, demonstrations.” The book also records how the supposedly ethical capitalist JRD Tata considered the slum dwellers as “bootleggers, smugglers, and anti-social elements” where 75% of his workers lived. Prof Rainu also mentions how JRD Tata refused to spend any money on the city projects unless the government used “mobile police squads to remove the zopadpattis (slums) and to abort any attempts to create them.” The Tatas were also in favour of population control and gave suggestions to the government to impose a monthly fine on the families having more children.
Neoliberal India and Ratan Tata
The neoliberal structural adjustment of Indian economic policies after 1991 could arguably be considered a formal declaration of an institutional counter revolution against the vision and ethics of a socialist and welfare state, which was surreptitiously put into practice long before. In fact, LPG policies and its ethics could also be described as an expanded implementation of the Tata memorandum.
The neoliberal regime since 1991 has blatantly and structurally reversed the balance that was notionally maintained between the capital and labour, between the state and the citizens, in favour of the capital and the capitalistic state. Withdrawal of the state from all the sectors, primacy for the big capital in the allocation of public resources, and empowering the capital by disempowering the working class, criminalisation of dissent, and marginalisation of the rights of people over resources were the few facets of the new regime, irrespective of the party in rule. Competitive repression, extraction, and profit maximisation by manipulating state patronage became the ruling ethics of the big capital, and Tatas were no exception.
Ratan Tata took over the leadership of Tatas in this transitional stage. And his tenure, like that of any big capitalist of the ilk, is tainted with neoliberal ruthlessness.
The post-90s story of Indian capitalism is a story of extractive capitalism and unethical body shopping. Tata had to face stiff opposition when TISCO wanted to expand its operations to unwilling tribals of Gopalpur in Odisha using the repressive state power. In the ensuing long battle, the collusion of the state and the Tatas resulted in the violation of all human rights and civil liberties. A union leader was also mysteriously killed. Eventually the plant had to be shifted to Kalinganagar, where more than 12 Adivasis were killed before the plant was set up.
Similarly, even in the Singur in West Bengal, Tatas resorted to the use of state power to set up its Nano car factory by grabbing the fertile land of hapless farmers. But the people's movement was successful in this event. Though it was shifted to Sanad in Gujarat, Tatas had indulged in unfair labour practices, transferring the burden of loss on the workers.
There is an unfounded belief that the Tatas are scrupulous in corporate governance and follow a strict code of conduct, unlike opaque business houses like Ambanis and the Adanis. The post-91 conduct of the Tatas belies all those claims in a big way. Their manipulation of the political parties for obtaining 2G spectrum exposed through infamous Niira Radia tapes, the infighting of siblings over the control of the Tata empire that ensued between Ratan Tata and Cyril Mistry, etc., have proved that the Tatas conduct of corporate governance is the same as any other Indian big business. Even though Tatas name did not figure in the electoral bond scheme, it is a fact that 75% of electoral donations by the Tatas through their trust (Progressive Electoral Trust) went to the BJP, though their code of conduct of corporate governance is bombastic about political neutrality.
One of the worst betrayals of the Tatas was their role in helping Dow Chemicals not fulfil its promise to Union Carbide victims of Bhopal after acquiring 100% ownership of Union Carbide. The victims remind us that JRD Tata condemned the arrest of Warren Anderson, Chairman of Union Carbide, in 1984. David Good, former Director of the South Asian Bureau in the State Department of the US government and the official who denied Anderson’s extradition to India, is now Head of the Tata Corporate office in the USA. TCS has been collaborating with Dow in the US in all its operations.
Gujarat genocide or Israel apartheid: No guilt before profit
The hyperbole heaped on the ethics of the Tatas is surprising if one takes into account how ethics or guilt never mattered to Tatas as any business tycoon wedded to profit, or if one understands their metamorphosis about the Gujarat genocide or their investments in Israel immediately after they reduced Gaza into open prison.
Journalist-scholar Neelanjan Mukhopdahyay, in his scholarly work, Narendra Modi: The Man, The Times, provides the account of the hypocritical stands of the leaders of Indian Big Business when the country witnessed one of its worst genocides after 1984 and 1992. Big corporate houses, including Tatas, condemned Modi for the Gujarat genocide of 2002 and refrained from investing in Gujarat. But when Modi offered unimaginable largesse for corporate India for its investment in Gujarat, it was Tatas who took the lead to whitewash the heinous crimes of then CM Narendra Modi and pioneered his makeover as Vikas Purush from Hindu Hridaya Samrat.
Likewise, it was not just Adanis who have business interests in Israel. Long before the Adanis, amidst the heinous apartheid and genocide being committed by Israel on Palestine, the TCS and other organs of Tatas continued their digital and other logistical supplies to the Zionist economy. The recent revelations have brought to the fore that both Tatas and the Adanis are supplying war-related equipment’s to the Israeli war on Gaza.
So much for the ethical capitalism. Capitalism thrives on maximising profit. The history of capitalism infers that it frequently breaks all boundaries of ethics and civilisation in search of new markets and high profits. Hence, ethical capitalism is an oxymoron. So are the Tatas. The hagiography around Tatas is one outcome of such predicament. Unless we defeat the hegemony of capitalism, even the urge for humanistic reordering of society will not sprout.
Shivasundar is an activist and freelance journalist. Views expressed here are the author’s own.