Companies
From ‘dirty Indian’ to titan of industry: The rise of Gujarmal Modi
Summary
- The Modi group may have lost much of its former glory but Gujarmal’s role in planting the seeds of entrepreneurship in pre-Independence India is set in stone.
A young man, incensed at being called a “dirty Indian" and shamed for a frivolous reason by a maharaja, went on to found a vast industrial conglomerate in a snub to both British hegemony and arrogant princely firmans. That man was Ram Prasad (later Gujarmal, a name change in honour of his beloved step mother Gujari Devi) Modi who was born on 9 August, 1902.
At a public auction in 1926 he outbid an Englishman, who responded by calling him “dirty Indian". An enraged Modi beat him up, only to be reprimanded by the maharaja of Patiala. At a soiree at the maharaja’s residence a few years later, he refused to touch alcohol. Shamed for not drinking, he walked out dramatically, vowing to build his own riyasat with none of these rules.
Gutsy, quirky and resolute, Modi did just that by setting up the industrial township of Modinagar.
Also read: The unravelling of a financial titan: Ravi Parthasarathy and the IL&FS scandal
His destiny was that of the quintessential entrepreneur. Ram Baksh Modi, his great grandfather, supplied grain to the British army. His father Multani Mal was equally successful but opposed formal education. So when his son forgot to pay his Std X fees he was happily inducted into the family business as a munim. Gujarmal, though, devoured books on engineering, marketing and commerce while also picking up a formal education from private tutors hired by his father.
The education paid off as he persuaded his father to switch to modern accounting methods and cannily insured his flour mill, too. That proved a saving grace when the flour mill perished in a fire.
Patliala’s loss, India’s gain
In 1932, after skirmishes with the maharaja, who refused to let him set up a cloth mill or vanaspati factory, he decided to leave Patiala for good. Armed with the princely sum of ₹400 he embarked on a mission to set up a business empire. In his quest he chanced on Begamabad, about 50 km from Delhi, where set up his first sugar plant. However, a bumper sugarcane harvest led to overproduction that year, resulting in depressed prices.
But Gujarmal wasn’t discouraged. In 1939 he set up a vanaspati plant and then a soap unit to use the sludge from the vanaspati factory. He diversified into bathing soaps, which became hugely popular since they used no animal tallow, a no-no for many Hindus. Sensing another latent opportunity, he then set up a tin plant to make containers for packing the soap.
Also read: K Gopalkrishna, the unheralded Indian automobile entrepreneur
By 1940, with the outbreak of World War II, Britain faced a severe shortage of essential supplies. To tackle this, they approached Indian industrialists to process dehydrated vegetables and fruits. Although this was virtually unknown in India, Gujarmal took the plunge, creating Modi Food Products and Modi Supplies Corporation. In recognition of his efforts, the British gave him the title of Rai Bahadur in 1942.
By this time Begumabad had become a burgeoning town, and in 1945 it was rechristened to Modinagar. The new industrial township had its own schools, colleges, vocational centres and a charitable hospital. At the dawn of Independence, Gujarmal inaugurated Modi Hosiery and then a year later the Modi Tent Factory. The swell of Partition refugees needed rehabilitation and he stepped in to provide employment and housing. He set up an oxygen gas plant by 1954 and Modi Silk and Rayon Mills two years later. In 1959 he stepped out of his citadel to set up the landmark Modi Flour Mills in Delhi.
When the government opposed his diversification spree, Gujarmal ventured into a new township, Modipuram in UP, in 1975. In the ’60s he set up a steel mill, before launching Modipon, a nylon yarn plant, and Modi Rubber, a market leader for many years.
A man ahead of his time
A traditional Marwari, Gujarmal was rooted in religion in the best possible sense, with a value system that abhorred rigid beliefs. He once celebrated his birthday in a church in London because he happened to be visiting the city. He also treated his daughters equally, sending one of them, Pramila Saraf, to live in the Scindia School girls hostel where his sons studied in the boys school.
Also read | Ramakrishna Dalmia: A capitalist with the heart of a revolutionary
At Modinagar, Gujarmal – by now a benign monarch – would take a morning walk every day with a notebook-toting assistant in tow for when workers approached him to discuss their problems. A philanthropist, he set up colleges, vocational institutes and schools in Modinagar and Patiala, while leading a simple life despite his vast riches. In 1968 he was fittingly awarded the Padma Bhushan and also became the president of FICCI and chairman of the International Arbitration Council.
After he passed away in 1976 at the age of 79, his group fell prey to internecine battles for control between his six sons. The Modi group may have lost much of its former glory but Gujarmal’s role in planting the seeds of entrepreneurship in pre-Independence India is set in stone.
