The rise & fall of a state
Ramesh Kandula

Hyderabad, The Social Context of Industrialisation 1875 to 1948
by C V Subba Rao. Orient
Longman. Pages 218 Rs 650.

The charming city of Hyderabad under the Nizam’s rule evokes powerful romantic images but efforts to explore its economic and industrial development have been few and far between.

C V Subba Rao’s Hyderabad, The Social Context of Industrialisation is one such attempt, which is far from being "an arid account," as the author feared.

Hyderabad was the largest of the Indian states, its total area exceeded the combined area of all the states grouped under "lesser States". Hyderabad also maintained its own currency, railways and communication.

The size of its territory, the viability of its economy and the religion of its ruler enabled the state to enjoy a relative degree of autonomy which enabled the state to actively invest not only in social overhead capital but also in a variety of companies, especially in the modern sector.

Yet, the political factors including the overarching role of the state itself inhibited growth. No wonder then that in Hyderabad, unlike in British India, there were no well-organised bodies of industrialists, nor were there any big business houses. The industrial evolution of Hyderabad state had three distinct phases. During the first phase, (from the 1870s which ended with the end of World War I) beginning with last days of Salar Jung’s prime ministership, a firm base for infrastructure was laid.

The second phase was the inter-war years, 1919-1939, when the state actively provided institutional support to industry. The third phase was from the beginning of World War II in 1939 to the end of the Nizam’s regime in 1948 during which state-planned economic development was introduced. Mir Turab Ali Khan, popularly known by his title, Salar Jung (1829-1883), can be justifiably described as the precursor for the changes in social organisation of Hyderabad. Though Salar Jung’s relationship with all three centres of power – the Nizam, the aristocracy and the Residency, were marked by ambiguities and contradictions, still he managed to initiate measures that laid the basis of industiralisation in Hyderabad. It was during his stewardship that the first railway line between Secunderabad and Wadi was opened to traffic in 1874.

The second phase saw establishment of Commerce and Industries Department in 1918. A number of initiatives were taken to encourage development of cottage and small-scale industries. The state also started providing financial aid to the corporate sector. The first company to receive such aid was the Shahbad Cement Company of the Tatas in 1925.

Though the measures were ad hoc initially, the formation of Industrial Trust Fund (ITF) in 1929 spurred industrial growth. After the establishment of ITR, a number of companies received large and liberal financial aid from the government. The First Five Year Plan of the Hyderabad government envisaged 108 projects with a proposed initial investment of about Rs 2500 million. However, not many of the projects were taken up, because soon the regime faced a social and political crisis from which it never recovered.

In 1948, the regime collapsed with the Indian army intervention, in what is quaintly called as ‘Operation Polo’. In 1956, after the linguistic reorganization of states, Hyderabad Karnatic became part of Karnataka, Marathwada became part of what is now called Maharashtra and Telangana became part of Andhra Pradesh.

Subba Rao concludes that ‘the precapitalist social organisation`85 imposed the ultimate limits on the process of industrialisation’. State intervention in industry could not make any significant difference to the industrial backwardness of Hyderabad. The state lacked any identifiable group of private capitalists, since industrial evolution of Hyderabad was essentially a product of the autonomous initiative taken by the state.

Also, a class of capitalists never emerged in Hyderabad because state control of ownership, finance and technology overshadowed such a possibility.

In the final analysis, the limitations imposed by a feudal social order and the autocratic polity based on it are to a large extent responsible for the constraints in industrial growth.

One interesting point to note is that, contrary to popular perception, in organised industry as a whole, Hindus owned about 60 per cent of the units while Muslims owned only 19 percent.

Rao seeks to underline the fact that the political separateness of a princely state and the particular autonomy of Hyderabad state become important explanatory variables in the analysis of industrial development of in Hyderabad. In the end, the autocratic political structure, based on the feudal social organization, remained impervious to changes from both above and below, and resulted in deterioration of the state’s economy. Rao’s rigorous study, the result of a two-year project financed by the Indian Council for Social Science Research (ICSSR), is a valuable addition for understanding the economic history of the Hyderabad state.

A multi-faceted personality

The author of the book, C V Subba Rao, who passed away in 1994 at the young age of 41, was a man of many facets and talents. Rao, born in Rajahmundry in East Godavari district, wrote his first poem at the age of 13 dedicated to Gurajada Appa Rao, considered the father of modern Telugu drama. He later developed a deep interest in modern Telugu literature and wrote stories, poems, essays in literary criticism, a play and edited a collection of writings on literature (Vibhata Sandhyalu).

Actively involved with radical left politics since his youth, Subba Rao was arrested for his activism when he was a student in Visakhapatnam during the Emergency. He studied M.A. in economics in jail and had to take his viva voce in handcuffs and fetters, which was strongly objected to by Prof J Krishnamurthy of the Delhi School of Economics. Rao secured a first class and was later released when the Janata government came to power at the Centre.

Later, he moved to Delhi and became involved with the activities of the People’s Union of Democratic Rights. Having closely observed the tribal movements in the neighbouring Srikakulam district, Rao’s interest in nationality movements, including those in the North-East, continued. He taught economics at the Khalsa Evening College, University of Delhi. It was during this stint that Rao worked on the present work under review.

After Rao’s death suddenly in 1994 due to cardiac arrest, his friends and admirers compiled and published a collection of all his unpublished writings, Sangdhigdha Sandarbham, as a tribute on his first death anniversary. "He critiqued literature from the point of view of a social scientist. His writings in Srijana (a Telugu literary journal) during 1978-85 left an indelible print on readers," says Varavara Rao, the Maoist ideologue, who founded the magazine.