Bengalis are perceived as singularly unsuited for doing business. Although second to none as far as intellectual abilities or educational/professional attainments go, the bhadralok Brahmins, Vaidyas and Kayasthas are considered to be devoid of entrepreneurial drive. The ones straying into trade and industry are either those with not-so-honourable credentials or real gentlemen, who may have done better confining themselves to the less murky world of Rabindra Sangeet, Satyajit Ray, Karl Marx and football.

Such generalised caricatures as the above are bound to be reinforced amid the ongoing financial implosion involving deposit-taking companies in West Bengal.

The likes of Saradha, Rose Valley, Prayag, MPS, Tower, Chakra, Icore, Silicon, Vibgyor and Sumangal — or Subroto Roy’s Sahara Group before them — are all today in the news for not the best of reasons. More than anything else, they might confirm the impression of business just not being the ‘right’ thing for Bengalis to engage in.

Renaissance entrepreneurs

This is most unfortunate given the great history of entrepreneurship Bengalis actually have, going back to Dwarkanath Tagore. In 1836, he acquired the Raniganj collieries from an English agency house, Alexander & Co, and followed it with ventures — for operating tugboats between Kolkata and the mouth of the Hooghly, steamboat services connecting Kolkata and Allahabad, and a steam-powered floating ferry across the Hooghly — mainly to use the coal that was mined. Dwarkanath even envisaged a 160-km rail line from his Raniganj fields to Kolkata, a project that the British authorities derailed for being promoted by a company under “native management”.

No less visionary an industrialist was Rajendra Nath Mookerjee, whose engineering firm, Martin & Co, was at the turn of the 20th century executing major water-works stations, feeder railways and building projects all over India – including Kolkata’s magnificent Victoria Memorial. In 1924, this concern took over Burn & Co, which owned a pig iron ore unit that 15 years later began producing steel. Indian Iron & Steel Company (IISCO) became the flagship of the Mookerjee family-controlled Martin Burn group. Till the mid-sixties, it was India’s third largest industrial house after the Tatas and Birlas. The group’s sudden descent into oblivion — starting with wild speculation in IISCO’s shares and labour unrest, leading to nationalisation of most of its companies by the early seventies — is something business historians haven’t till date seriously analysed.

Equally significant were the various Bengali industrial ventures born out of the Swadeshi movement during the early part of last century: Bengal Chemicals & Pharmaceuticals, Calcutta Chemical Company, Bengal Immunity, Bengal Lamps, Bengal Waterproof, Bande Mataram Match Factory, Banga Laxmi Cotton Mills, etc.

The promoters in these were largely men with impeccable educational backgrounds. Bengal Chemicals’ founder, Prafulla Chandra Ray, had a chemistry doctorate from the University of Edinburgh. Bengal Waterproof’s Surendra Mohan Bose and Bengal Lamps’ Kiran Shankar Roy were fired by nationalistic zeal, even while studying at Berkeley and Oxford, respectively. Rajendra Nath Mookerjee was an engineer, who, in fact, presided over the Indian Science Congress session in 1921.

Renaissance reversal

The decline of Bengali entrepreneurship, if anything, is more of a post-Independence phenomenon. One commonly held belief links it to the stranglehold that the Marwari community has historically exercised over business across Eastern India.

The Bengalis, no doubt, lacked the deep pockets or the kind of upcountry trading and money market networks that the Marwaris had. It is the latter who were, then, better placed to take over the businesses of European expatriate firms — be it jute mills in Howrah or tea estates in Darjeeling-Dooars — when their owners decided to pack up after 1947.

But Marwari dominance cannot, by itself, be a reason for the fading fortunes of Bengali enterprise. The bhadralok may not have been cut out for jute, tea and commodity or stock speculation. They were, however, significantly present in a host of other industries — from steel and engineering to drugs, personal care products or raincoats — where the Marwaris posed few threats.

Equally problematic is a second theory concerning labour militancy. No one can dispute that West Bengal’s strong trade union culture did not appeal to businessmen. But had that been the only factor, Bihar or Orissa, with their relatively docile workforce, should have emerged as industrial powerhouses. It, in any case, does not explain why an indigenous capitalist class couldn’t develop in West Bengal during the post-Independence period, unlike in many other States.

For that, the real reason lies in the general de-industrialisation of the eastern region accompanying Kolkata’s loss of preeminence in finance and politics after Independence. It led to the fulcrum of economic activity shifting first to the West and, then, to the South and the North. Central policies such as freight equalisation, which robbed the mineral resource-rich eastern states of their natural location-based advantage, certainly played a part in this.

The process of de-industrialisation and capital flight began even before the Left Front came to power, though it took on a life of its own from the 1980s. A barren industrial landscape couldn’t obviously have been fertile ground for a thriving local business class. It ceased to be so even for the Marwari business houses that had initially accumulated capital in the bylanes of Burrabazar and the trading floors of Calcutta Stock Exchange.

Stillborn rebirth

Not that attempts weren’t made to arrest the decline. This happened especially from the mid-nineties when Jyoti Basu, still Chief Minister, got a couple of big-ticket investments into West Bengal. That included Haldia Petrochemicals (whose main private promoter was Purnendu Chatterjee, an IIT-Kharagpur product who earlier worked with McKinsey and George Soros) and a purified terephthalic acid facility of Mitsubishi Chemicals, also at Haldia.

Basu’s successor, Buddhadeb Bhattacharjee, tried even harder, but failed. Symbolic of it are Singur, Nandigram and Salboni — the respective planned locations for a Tata Nano car plant, a chemical hub and an integrated steel project, none of which materialised for reasons not worth elaborating here. At the end of the day, West Bengal’s industrial rebirth suffered more than a temporary setback.

All through, however, the State’s agriculture continued to do well. Its growth seems to have stimulated the development of various ancillary industries and services, providing the basis for accumulation of small investible surpluses. These, alongside the mild economic resurgence noticeable since the mid-1990s, appear to have been conducive for the emergence of a new class of homegrown entrepreneurs. Some of them mentioned earlier in the article have roots in Paschim Medinipur and other hinterland areas, besides even hailing from non-bhadralok communities like the Mahishyas.

But unlike the earlier Bengali industrialists — who, we saw, were truly renaissance personalities inspired by the ideas of Raja Ram Mohan Roy and Jagadish Chandra Bose — the current crop has been basically oriented towards services businesses, be it real estate, finance (in assorted avatars from chit funds and collective investment schemes to ‘potato bonds), films and media.

The new proto-capitalist class was born in the latter part of the Left Front’s tenure, but clearly saw greater growth opportunities under the Trinamool Congress, whom it backed similar to how regional parties elsewhere, too, were primarily propped up by local business interests. In this case, it hasn’t produced the best of results, either for the ruling Trinamool or West Bengal.

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