Unlisted family businesses rule India

Patrick French (‘India: A Portrait’) reveals that more than two- thirds of the under- 40 members of the Lok Sabha are hereditary and many of them are hyper hereditary, based on their dynasty.

Actually many of us forget that since 1885, members of the Motilal Nehru family have presided over the Congress party for 39 of its 125 years. Motilal Nehru was president for two years, Jawaharlal Nehru for nine, Indira Gandhi for eight and Rajiv Gandhi for seven. Sonia Gandhi holds the record both within the dynasty and the party by having the longest, unbroken tenure of 14 years and is still going strong. The party has become a family enterprise and a non- family man like Narasimha Rao is not even recognised as a former prime minster.

We also have the DMK, NCP, Akali Dal, Shiv Sena, JDS, NC etc. in the same footsteps.

The three major parties run by Jaya, Mamta and Maya also in a sense falls in this category since they control everything in the organisation.

It is important to mention that Tamil Nadu is a pioneer of this wherein the interests of the state, party, government, and people are subsumed for the welfare of the family enterprise. In general, business enterprises maximizing shareholder wealth or earning per share ( EPS) is the norm. Here also it is same in terms of family wealth. There is some allocation for loyalists in the form of ministry positions or chairman of corporations.

The investment is reasonably higher but most promises like free rice to free television sets to free mixture- grinders are given from the government account. To that extent future cash outflows are that of government and inflows are to the family.

This works as long as the family is perceived to represent caste or sectional interests and they bring in votes. Also the huge amount of money generated helps the family to hold on to its party even out of power by judiciously using ill- gotten wealth. What about internal democracy or transparency in functioning? That is the major issue. Most of the critical posts as in family business are held by sons, daughters, in laws etc. Also critical money making activities like land allotment or mining lease or permission to start colleges are kept within the family. Some low margin high volume activity like transfer of teachers may be given to outsiders.

The unlisted entity has to regularly prove its brand/ market value in elections.

If it continues to fail then the constituents become uninterested. Another important issue is that one can be a subunlisted enterprise of a larger one like congress. But then the sharing of revenue with head quarters should be as per understanding. Otherwise there could be problems like that faced by Gundu Rao or YSR Reddys son.

But if you or your children opt out of politics, then you cannot be a ‘dacoit capitalist’anymore since your ability to formulate policies is gone and there could even be vendetta by the current rulers.

So make sure your son, daughter, wives and sambandhis are in some business unit or the other. Will this business meet its nemesis? Not for some years yet. One reason it will flourish is the increasing importance of land as a factor of production. In the 60s, capital was scarce and land was easily allotted. Now, capital is available, even from global sources, but land is scarce and that is the strength of these families. Control of land and its allotment is the primary industry.

To that extent, the family business will flourish.

From one angle, it is frightening that some 50 or so families have a firm grip on our politics. Except communists and BJP all others have this . So as is predicted, if all regional parties have majority in the coming Lok Sabha elections and a third front government supported by Congress is a possibility then we can be rest assured that whole country will be under the control of unlisted family businesses and it may not augur well in the long term and also for the development of our polity. But at the current stage of our political process it seems inevitable that, 50 or so families, which are unfortunately rapacious and greedy, rule us. They may have an understanding amongst themselves- as in the case of dacoits about regional loot and coalition Dharma to look aside. The has to run its steam till a functioning and appropriate political structure is evolved. We have a long way to go.

MOTILAL Nehru family have presided over the Congress party since 1885.

Sonia Gandhi holds the record both within the dynasty and the party by having the longest, unbroken tenure of 14 years and is still going strong.


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