India’s New Capitalists

by Harish Damodaran

Harish Damodaran

New India Foundation



During the early post- Independence years and right until the 1970s, there was considerable critical writing on the Indian capitalists. This was a period when the developmental state was still a viable option. Public investment was the preferred route.

- The Hindu

For 200 years, social scientists have tried hard to explain why and how agrarian societies transform into industrial nations. When, how and why do merchants, traders, moneylenders and landlords become industrial capitalists?

- Outlook

Books on the business histories of South Asia rarely succeed in exciting the reader’s interest and in generating fresh insight. Initially, there was an obsession with the traditional mercantile groups that prospered in the shadow of the raj.

- The Telegraph


India’s New Capitalists: Caste, Business, and Industry in a Modern Nation (Permanent Black/Palgrave Macmillan 2008), looks at the changing social composition of the country’s business class, particularly after Independence. Business in India was traditionally an occupational silo in the caste system, with businessmen predominantly ‘Banias’ recruited from the Vaishya or mercantile order within the classical Hindu chaturvarna (four-order) hierarchy. The ‘Bania’ over the ages even acquired a generic connotation, referring to any businessmen – be it the local village grocer and moneylender or the large factory owner and banker. That picture has, however, undergone significant transformation in more recent time, with the entry of entrepreneurs from diverse community backgrounds, including those with no established pedigree in trade or finance.
India’s New Capitalists sought to trace three broad routes through which the journeys to the boardrooms have taken place. The first, ‘Shop to Factory’, is the familiar passage of the various Vaishya castes (Bania/Marwaris plus Parsis, Gujarati Lohanas and Bhatias, Sindhis, Nattukottai Chettiars and Muslim Memons, Khojas and Bohras) into industry. The second, ‘Office to Factory’, relates to the Brahmins, Punjabi Khatris, the Bengali bhadralok and similar scribal castes, who were historically and culturally conditioned to the different administrative and white-collar professions. The third, ‘Field to Factory’, is of the so-called or Shudra castes with roots primarily in farming and allied activities (Kammas, Reddys, Gounders, Patidars, Marathas, Jats, Nadars, Ezhavas, Ramgarhias, etc). In examining the three transition trajectories, especially the last two, India’s New Capitalists has tried to capture the expansion in the social base of Indian capital ‘beyond the Bania’, so to speak. At the same time, it has also highlighted regional variations and limits to this process of ‘democratising’ Indian capitalism.

Author Profile

Harish Damodaran

Harish Damodaran is a journalist with over 25 years of reporting experience, starting with the Press Trust of India (1991-94) and The Hindu Business Line (1994-2014). Since October 2014, he has been with The Indian Express, where he is Rural Affairs and Agriculture Editor. Much of Damodaran's journalistic career has been spent in farm and agribusiness reporting, a job that has involved tracking price movements, production, market arrivals and policy developments, whether relating to grains, pulses, oilseeds, sugar, cotton or dairy products. Working as a farm reporter has given him ample opportunities to travel, observe, study and learn from people and things on the ground, while complementing his wider interests in macroeconomics, corporate developments, business and social history. Damodaran's first book, India's New Capitalists, was a product of insights from observing the social profile of businessmen in different parts of India and seeking to build upon what was originally intended as material for an editorial/opinion page article or long-form news story. The book won the prestigious Ramnath Goenka award. Currently, Damodaran is working on a biography - of somebody who headed India's third largest industrial house at the time of Independence and whose business practices was also influential in driving policies such as insurance and bank nationalisation and abolition of the managing agency system. Drawing on unpublished private papers and diaries, it is an attempt to document in detail the personal and business life of a prominent tycoon, while also locating these in the larger economic and social context of that time.