On May 27, 1964 Jawaharlal Nehru passed away and Lal Bahadur Shastri succeeded him. It was a happy news for Birla because Shastri valued native culture like he did. Shastri was the product of Kashi Vidyapeeth (Later day Benaras Hindu University) in the upgradation of which to a famed university Birla family had made huge contribution to. Birla had been an associate of Congress party and he hoped under the new prime minister the industrial policies would be favourable to private players. The changes in cabinet were encouraging signs. A new economic policy appeared to be on the unvil. Birla submitted a 16 page memorandum suggesting economic reforms. Earlier no industrialist could dare suggest anything that went against the theories of Nehru. JRD Tata had good personal understanding with Nehru but he failed to influence the latter. Nehru was too strong headed a person.
Shastri had thrown hints that economic policies were under review and changes were coming. He had assured FICCI that he would review the government control regime. In 1965 Shastri informed Parliament that general category industries were under a consideration for being freed from the control regime. In the meeting of International Chambers of Commerce organised by FICCI the prime minister Shastri revealed the foreign investments may also be allowed wherever felt needed. An export promotion policy was delcared to attract the foreign investors. The captains of big industries were feeling upbeat and hopeful. The budget presented by the finance minister was a great relief for the industry. Birla wrote to the F.M., ‘Budget has given new psychological thought to the industrialists. You have shown a ray of hope to the hearts of the people’.
Then came 1965 when Pakistan forced war on India. The national concern united the countrymen. Patriotic sentimet surged. Shastri declared, ‘After the experience of war the changes that would come into the country shall change the picture of the nation’. He gave the slogan of ‘Jai Jawan Jai Kisan’. Shastriji was thinking of making the economic system more practical to free the system of bureaucratic corruption and prevarication. But sadly in January, 1966 Shastriji died at Tashkent. There again descended an atmosphere of uncertainity. The industry waited for a new prime minister and new policies.
New political thought
News of the sudden demise of Shastri ji fuelled the speculations on the new prime minister. There were many contenders. The front runners were Morarji Desai and Indira Gandhi. Through Krishan Kumar Indira sent a message to G.D. Birla to influence the Congressmen in her favour. There were many Birla faithfuls in the party. Birla too decided to support Indira as Morarji Desai did not win the confidence of the industry during his tenure as the finance minister in Nehru cabinet. In 1963 budget he had infact levied additional tax on the industries. That was the worst budget since independence. The trade and industry largely decided to stand by Indira Gandhi.
Congress working committee decided in favour of Indira Gandhi by 355 votes against 169. When Indira Gandhi took oath of office Birla expressed his feelings—‘Please accept my congratulations. I have heard your inspiring addresses on radio and felt very impressed. May you be successful and implement your ideas for the benefit of the people. I am sure you will get the support of the all sections. I am with you at every cost and shall welcome your decisions’.
Indira Gandhi accepted the congratulations and asked him to keep lending his advice as the representative of the trade and industry. But only a short time later Indira realised that to retain hold on the Congress she needed to think of new economic policies. The old guard of the Congress was not pleased with her policies. It was time for her to assert herself and tell the old guard she was not afraid of them and would care little. To gain the American support the rupee was devalued. Then it was felt necessary to boost exports and invite foreign investments. The devaluation decision attracted heavy criticism at home. The old Congressmen were unhappy.
Birla never indulged in public criticism. But in 1965 he had come to believe that public castigation of the policies of the government had become imperative to make the policy makers rethink. In the Marwari Association he stated—‘The government must understand that if it was thinking of pulling off the turbans of the businessmen then in coming days the people would pull off its Gandhi cap.’ It reflected his anguish.
It was very unlike Birla. Even his friends, associates and fellow businessmen were surprised. JRD Tata wrote to him. “I am pleased to know that you are publicly speaking against the government policies in a positive way. I congratualate you.”
In December 1966 when the General Elections became due he wrote a letter to the prime minister’s office regarding election fund reminding her of his old association with Congress. The P.M. office did not reply. Anyway Birla sent his contribution of 7½ lac rupees for the fund.
With Swatantra Party candidate
From Jhunjhunu seat for Lok Sabha G.D.’s friend Radhakrishan Birla was running on Swatantra Party ticket. Jhunjhunu was near Pilani and a part of old Shekhavati. Radhakrishan asked G.D. to help him in election campaign. G.D. obliged and extend all cooperation to Swatantra Party candidate. Radhakrishan won the election. Birla was accused of spending 70 lacs in a grudge to defeat Congress candidate R.R. Morarka who had been winning that seat since 1952. Birla wanted to keep linked in domestic politics of Pilani. The national level elections were held in uncertain environment. The people were unhappy due to price rise and famine had struck parts of the country depleting food stocks. But Birla knew the Congress would return to power although with reduced majority. Out of 520 Lok Sabha seats Congress won 283. With 44 seat Swantra Party emerged as a big political force. This time big business houses had supported other parties as well financially. The monopoly of the Congress had been challenged. Indira Gandhi said to Birla through Laxmi Niwas that big industrial houses had not helped the Congress like before.
The hard times
1967 General Elections were very important for Indira Gandhi. There was internal struggle going on in the party. The old guard wanted to keep the organisation under its control. She wanted to create an independent image of herself to come out of the shadow of old leaders. She took the younger elements of the party in her confidence who emerged as young turks. They thought the old guard was the module of the big businessmen inside Congress. The young turks stood for the nationalisation of the Business Houses. Indira Gandhi set up committees to study the monopolistic trade practices. It also was an effort to look into the employment of banned practices in running the business activities by industrialists.
20 big Business Houses were targeted. They were to be investigated for arbitrary hiking of prices of goods and services and other malpractices to earn extra profits. It was found the banks had been choosing exclusively those business houses for providing loans for new enterprises and expansions. Infact, the banks had chosen them because they were the ones who had managed to get licences and permits. All doors were closed for new entrepreneurs. The big businessers had established a deep liaison with old congressmen and through them the officials were made to oblige the industrialists. A report said pointing out to Birla Group that most of the financial assistance provided by the financial institutions went to it. 56% finances had gone to big business. Birla’s share was 25% of the total.
On his own Birla tried to keep his links with Indira alive but the response from the other side was cold, as cold as dead. In 1968 on the occasion of the marriage of Rajiv Gandhi Birla sent a silver tray set as a gift but Indira returned it with note—’Your reps came with the gift and I told Rajiv about it. As I had written in my invitation letter that no gifts would be accepted it would be unfair to keep your gift. I did not want to do anything in haste but it was necessary to explain the thing. So, next day I talked with L.K. Jha and he too agreed with my reasoning and advised to return the gift. I am sure you will understand’.
Sometime later ‘Monopoly Commission’ submitted its report. It said the 1956 Industrial Plicy was not implemented and big Business Houses were advantaged—resulting in pooling of investments in the private sector. It recommended banning the Business Houses from certain sectors of the industrial activity. Thus Birla and his big business brothers were directly attacked. The young turks castigating monopoly houses in the Parliament and Birla was being specially targeted. The young turks proved in the parliament that big banks had funded the big business houses at the cost of small entrepreneurs and weaker sections were totally excluded. Then, finance minister, Morarji Desai came under heavy attack of young turks. His policies were criticized and a demand was raised to nationalise the banks.
Morarji was against the blanket nationalisation of banks. Indira Gandhi realised that she could corner Morarji Desai on the issue of bank nationalisation. On July 19, 1969 fourteen big banks were nationalised. It was a severe blow to Birla’s industrial empire. His UCO (United Commercial) Bank was taken over by the government. UCO was India’s one of the five leading commercial banks. Founded in 1942, G.D. Birla had nursed it like his own child and it was the spine of the Birla’s business operations. It was handling daily monetary business of 100 enterprises of Birla Group. It had 314 branches all over the country and 10 operated abroad.
Through bank nationalisation Indira Gandhi was able to create an image of herself who cared for the common people and was not a puppet of big business operators or influential people. Through press it was shown that Birla had been operating his industries and businesses through unfair means and using people’s deposits for his own benefit. The commission reported that business houses had set up bogus companies to create holes in licencing system and earned undue profits and advantages. Company Law Department presented figures showing how in a short period Birla had multiplied his assets and capital many times over.
The constant running down of Birla and other big industrialist was reaping rich political dividends to Indira Gandhi. In 1969 MRTP (Monopoly Restrictive Trade Practices) Act was brought in to muzzle and leash Industrial Houses. All the firms that had assets exceeding the limits were restricted from entering new fields or ventures. Such firms who planned to expand the existing operations were required to seek permission necessarily from the government. The industrial policies of that area were framed with the single aim of hurting the business interest of big industrial houses. Many laws were framed to curtail the growing financial power of industrial houses.
Birla industrial empire was under constant attack in Parliament. In 1967 Chandrashekhar had emerged as a leading turk. He accused Birla of all kinds of malpractices and unfair acts. He was supposed to have issued share certificates in the bogus names. He was charged with cheating the people and deceiving revenue authorities for a long time. It was said Birla had amassed unlimited wealth at the cost of the ordinary citizens. Chandrashekhar claimed the very aim of Birla in raising industrial empire was to steal taxes and cheat the people and hence it was time justice was done.
Such accusations raised uproar in the Parliament. Demands were raised to conduct on enquiry against G.D. Birla. As finance minister Morarji Desai was ridiculed. Indira Gandhi made not attempt to defend Morarji or the old guard.
George Fernandez of Socialist Party began to spit fire against Birla. Birlas were accused of using association with Mahatma Gandhi in manipulating the official machinery to amass wealth and assets. He said Birlas were satta players who just happened to stumble into industry but they never cared for industrial rules and norms. With the cooperation of Gandhiji Birla set himself up as financial and political power, he claimed. As a result, in 1970 Sarkaria Commission was appointed to enquire into the allegations against G.D. Birla. George Fernandez failed to prove anything. He had no shred of evidence.
The Communists of W. Bengal also raised their shrill voices and accusing fingers at Birla. How could they be left behind being the sworn enemies of capitalists? Marwari Community was accused of living in Bengal for selfish interests. Against big business houses demonstrations and strikes began in Kolkata. Communist leaders sat on indefinite hunger strike against Birlas. C.P.I. leader S.A. Dange declared 1st October, 1970 to be celebrated as Anti-Birla and Anti-Monopoly day. The managers of Birla Industrial Complex were gheraoed. Dange challenged Birla that if he does not handover Birla House of Delhi to the nation within six months the working classes of Delhi would forcibly take control of the house. Birla House issue was again revived by young turks of Congress and Communists.
Birla House surrendered
The public condemnation and notoriety had gravely heart G.D. Birla. The image he had built up with his life long endeavour was being smeared for political reasons. Birla was beginning to understand the new political language. He held Indira Gandhi responsible for it. Birla thought by removing himself from the political scenario he could bring the situation to normalcy. He also realised that to turn the public gaze away from him he will have to give the Birla House of Delhi to the nation for its conversion into a memorial of Gandhiji. All the groups and communities were putting pressure on him. The family also wanted him to surrender Birla House. On October 2, 1971 in a public function G.D. Birla dedicated a part of Birla House to the nation to be turned into Gandhi Sadan. President V.V. Giri chaired the function. Ageing Birla himself went to live in a rented house in Vasant Vihar. But a few kilometers away from Birla House he bought a plot on Amrita Shergill Marg. The house that came up here was not named Birla House but ‘Mangalam House’.
Anguished at the sad developments Krishna Kumar decided to run in 1971 Lok Sabha election. He wanted to try his luck as an independent. G.D. was not in favour of it. He wanted no Birla in active politics. He thought Birlas must only concentrate on business and industries. But K.K. Birla did not accept the advice although Brijmohan too thought his brother G.D. was right. Miffed at this G.D. Birla did not talk to his son for two weeks.
These developments deeply upset Birla and he got disenchanted with politics and public life. He turned his mind towards spiritualism. He surrendered himself to Gita. It gave him some peace and inner strength. From 1969 to 1972 he went on pilgrimages and visited all four Dhams that included the difficult track to Kedarnath. From the base of Gaurikund the entire Birla family walked on foot and covered 16 kms that day. They saw Gangotri and Yamunotri which proved very soul fulfilling.
