In a traditional society like ours it is important to know the history of the family and its background. The family values and traditions shape up a person and create a mindset. Mittals originated from the same Shekhavati area of Rajasthan that gave India the Birla’s, Khaitans, Bajajs, Kanodias etc. Before the advent of British in India Mittal family too belonged to Kshatriya caste, the native martial class. But then, the birth was not the caste decider but the profession one opted for. Even the lower castes could become members of upper castes by their deeds and achievements. The upper castes could easily change professions and shift to other caste.
A period came when the martial class Kshatriyas felt soldierly career was no more viable and becoming businessmen offered opportunities and financial security. Several of such families opted for trade or business. Mittals were also amongst them.
Rajasthan rulers had been at wars for a long period against the Mogul rulers of Delhi. The Rajputana soldiers fought valiantly. But at the end, the soldiers learnt a bitter lesson when the feudal rulers cornered all the gains and profits of wars and they were left holding empty sacks. The lot of soldiers was poverty, hunger and helpless families. They had to look for new avenues to make a respectable living.
Most of the soldier producing sections of society opted for trade and industry. The pioneers of this shift earned quick succeses and that attracted others to this new field. It led to the economic diaspora of Marwaris throught out the land. The arid area of Shekhavati offered little scope for agriculture. In this Marwari migration Birlas branched to Ajmer and on to Mumbai and Kolkata. Mittals reached Karachi which was then in British India (unpartitioned). In British India the traditional small scale industries were changing into bigger enterprises. Town and big cities were creating new opportunities. New industries were coming up mainly in port-cities of Karachi, Mumbai and Kolkata. The grandfather of Laxmi Niwas Mittal had set up a firm in Karachi. Marwari businessmen were more successful than others because their roots were in martial race and they conducted their business like soldiers. Trading was war and market a new battle ground. No quarters taken and no quarters were given.
The first migrant generation of Mittals dealt in brokerage in gold and silver trade. The firm soon got established. Prosperity was coming. The family was maintaining ties with its home base of Sadulpur in Churu district of Rajasthan. It was also benefiting from the Karachi success economically. The second generation of Mittals was represented by Mohanlal, the father of Laxmi Niwas. Then Mohanlal was yet a youngster and saw his future in the Karachi firm of his family. But the fate had willed otherwise.
When Mohanlal entered 17th year of his age the freedom movement of India was at its peak. The world was building up pressure on Britain to free India. British worked on ‘Divide and Rule’ theory and whispered to Muslim League leaders that in independent India the future of Muslims will be unsafe and bleak. Muslim League leaders took the cue and began to talk about two nation theory and separate homeland for Muslims called Pakistan. British rulers whipped up hatred and mistrust between the Hindu and Muslim communities. The real idea was to destroy the communal harmony to divert the attention of the people from the freedom effort and to show the world why the presence of British in India was imperative to prevent carnge.
The Congressmen understood the trick. Gandhiji was against partition of India. He truly believed that Hindus and Muslims could live together peacefully in the spirit of brotherhood. But the hardliners of both the communities were making division of the country inevitable. At last, preparations to grant freedom in 1947 at the cost of partition of the land into India and Pakistan began. Even years before 1947 communal tensions and large scale riots broke out all over the land where Hidnus and Muslims had been living side by side. The Hindus living in Karachi realised if that city became a part of Pakistan they will be in grave danger. Most of Hindus decided to flee from Karachi well in advance.
Desertion—a farsighted move
Mohanlal Mittal although 17 years old teenager felf the heat in the atmosphere of Karachi as young ones remain in touch with the realities around. He felt Karachi was no more safe place for Hindus. He advised his father they must leave Karachi. The senior Mittal was unwilling to leave his business he had set up with blood and sweat. But he allowed his son to leave Karachi along with his mother and brother (younger). The senior Mittal like many other Marwaris hoped their Muslim brethren will let them live in peace like before. It was of course, a wishful thinking.
Mohanlal Mittal came to Kanpur with his mother and younger brother while the senior Mittal stayed on in Karachi tethered to his firm. They had some capital spared by the senior Mittal. It was the year of 1945. Independece was yet two years away. The communal violence and hatred was at smouldering stage, yet to flare up into a carnage. There was a reason for second generation Mittals to head for Kanpur. Some of their relatives were already there and theirs was a well organised community. There was a tradition of every family of the community contributing one rupee and a brick to any new entrepreneur of their society as a token of support, solidarity and encouragement. This Marwari spirit of unity and support is legendary.
With the capital he had brought from Karachi young Mohanlal set up an oil mill in Kanpur. He nursed his young venture to make it prosper. The younger brother toiled hard with his elder brother Mohanlal Mittal. The two brothers made it a success. The changing times had taught the young Mittals how the time can be fickle and the most important thing was to save money for the future challenges instead of wasting money on celebrating the current success. They earned profits and saved a tidy sum.
Then, in 1944 deluge struck. Raging flood waters claimed the Mittal oil mill. The source of livelihood was drowned. Mohanlal felt the fate was against them. Mittals left Kanpur for Kolkata where the Marwaris had already established a strong hold on trade and industry right during the British rule. Birlas had become synonyms of riches. Marwari community of Kolkata gave financial aid and emotional support to Mohanlal Mittal.
Meahwhile, his wife Gita Mittal had become pregnant and lived in the village Sadulpur of Churu. And Mohanlal himself had started dealing in iron scrap in Kolkata. Then, his luck smiled, may be because of the child his wife was carrying in her womb, who would get the name Laxmi Niwas Mittal, the future steel king of the world. Mohanlal got an offer to become the managing partner of ‘British India’ a steel rolling mill without any investment. Other partners were share investors. Mohanlal was supposed to run the mill for his part of investment. Kanpur oil mill had given him the experience of running a mill which now proved his asset and qualification. Mohanlal grabbed the chance.
Son is born
The son arrived on June 15, 1950. The destiny appeared to have set the stage by getting Mohanlal into the steel works to facilitate introduction of his son, named Laxmi Niwas to the metal he would become global king of in future. The baby was born in the family house at the village in Churu. The village Sadulpur was then a backward hamlet lacking even basic amanities. There was no primary health centre to take care of the deliveries. The traditional nurse (dai) oversaw the birth. Fortunately the birth was normal that caused no problems. The baby and the mother both were happy and healthy. The baby was duly christened Laxmi Niwas literally meaning the abode of riches. How befitting! For the lucky ones the world is an oyester where nothing goes wrong and things happen according to the script.
The state of nation then
When Laxmi Mittal arrived India was two years ten months into independence. Jawaharlal Nehru was the first Prime Minister of India in total control. A lot had happened after independence. Hundred of small and big princely states had been forced to merge into the union of India. The country was drawing up its constitution and set to become a Republic, a parliamentary democracy. Nehru was trying to replicate the British political and governance system in India. But he was more impressed with socialist economic system of USSR and five year plans. Accordingly industrial activities were firmly under government control. It had been decided which sectors will be reserved for public sector and which fields were open for private sector. The picture was not favourable or rosy for private entreprises. The industries in private sector were controlled by licence-permit regimes. Steel industry was reserved for public sector in respect of new ventures or expansion. Tata group was the only old steel manufacturer in private sector. It was active in the field since British period and was a big national and international player. Inspite of that in independent Indian socialist industrial system it was not prospering.
The new government was not cosy with Birla group as well. The period of 1950s was not encouraging at all for private industries. Nehru was for the public sector to undertake all the important industrial operations. Such were the bleak circumstances for private industrial players when Laxmi Niwas had arrived.
As already stated the arid Churu areas offered little opportunities of livelihood. The soldier era gone, the men folk migrated to towns and cities in search of work opportunities. But Marwaris did not seek jobs or work as labourers. Their only passion was business, trade and industry of own entrepreneurship. An innate business sense they were born with. Martial tradition had made them bold by nature. Harsh natural conditions toughened them into hard nuts that adversities could not break and their minds never strayed from the single minded aim of becoming a business success. That is a unique mindset of Marwari people. In personal life a Marwari is stickler to old traditions, customs, abstinance and vegetarianism. Their families lived back in villages where they dedicated themselves totally to business. In alien cities Marwaris lived at one place as a community that helped them discuss business, keep up unity, carry on old customs and traditions and maintain familiar life style like back home. This insulated them from outside influences. Having no families meant 3-4 more Marwaris could live in one room and share all expenses. That saved them a lot of money and each of them built up tidy savings from such living itself.
Once in a couple of years a Marwari would visit his village to spend a few days with his family. Thus, some of his city success would reach home in cash form creating prosperity. Marwari villages of Rajasthan over the period prospered becoming oasis in the deserts. The cash rich visitors from cities inspired more Marwari youth to head to the industrial cities or business centres to make fortunes. The city Marawis returning from the village visits would bring along a new blood in youngsters, the fresh migrants to the centre of opportunities. This process countinued and created a Marwari dispersion and the money brought back by migrant entrepreneurs made Shekhavati region prosperous.
Meanwhile, in the industrial towns the private industry was facing discouraging environment while the public sector undertakings were fast spawning and breeding. Nehru was trying to industrially transform India on the Russian model through public sector enterprises while he paid little attention to the private sector that was getting sidelined. Mohanlal Mittal was still trapped in the scrap re-rolling mill finding no scope of exapansion. In the steel sector Tata Iron and Steel Co. (TISCO) and Indian Iron and Steel Co (ISCO) held monopoly. Even G.D. Birla was not allowed entry into steel industry. The other entrepreneurs like Mohanlal Mittal were in a hopeless situations where there was no room for growth and their dreams were getting buried under licence-permit regimes of the central and the state governments.
Personality build up
It is a psychological fact that a father has an special affection for the first born and the mother has for the last born. In the first born father has great expectations as his natural heir. The mother feels the last born needs her care more being the youngest and physically weakest. Mohanlal Mittal understood the importance of education through his own experience. Due to the circumstances he could not get proper education and realised how disadvantaged he was without it in dealing with the business affairs and life. He wanted his sons properly educated. He sent for his sons from the village to Kolkata.
After the school education Laxmi Niwas was admitted into St. Xaviers College, a premier institution of Kolkata.
In 60s commerce was a favourite subject of students. Then, they used to outnumber science students. The children of the families related to business and trade naturally went for economics at the behest of their parents. Mohanlal also wanted his son Laxmi to take up commerce and economics. The college used to hold commerce classes in the mornings. In it Mohanlal saw an opportunity to get his son Laxmi learn some practical lessons about the business. He asked Laxmi to attend the office for some hours everyday after the college classes. The firm still used to buy scrap iron and get it rolled in the mill Mohanlal was running as a working partner. Thus scrap was being treated as raw material. Laxmi Niwas learnt all about that trade from the purchase of the scrap stage to final sale of rolled product. Even as a student Laxmi Niwas learnt a lot and received on the job training to gain the following knowledge:
❑ Purchase of the raw material (Scrap) for the rolling mill. The cost of the raw material has the direct bearing on the prices of the end product. The raw material supply should be steady and it needed to be stocked in adequate quantity as buffer. Eye be kept on new likely source of raw material.
❑ The expenses on cartage of raw material to godowns, overhead costs and interest on the capital should be added to the basic cost of production.
❑ Final production price be determined by setting up annual production target after estimating the rolling mill and office expenses. The price must include the profit percentage.
❑ In business a liquid asset (cash) level must be mainatined to take care of contingency expenditures and for balancing losses.
❑ All the overhead expenses must be taken into consideration while fixing final price of the product. There should not any expenditure left out that the price does not cover.
❑ While determining the production target the realistic knowledge of the production capacity of the mill is a must. The employee and workers should be kept
in good humour through coordinated and cordial relationship. There should be bonus provision for extra production.
❑ The production target must be increased every year. And for that additional resources and infrastructure be created.
❑ With raw material the final product should very carefully be envisaged and planned considering the future market price estimates according to demand and supply theory.
❑ The machine department of the rolling mill be kept in working order by good maintenance to have it running without brakedown.
❑ Efforts may always be on to set up a new rolling mill complex so that whenever needed the basic amenities be procured for the new complex.
Laxmi Mittal gained the above knowhow before he graduated from St. Xaviers in 1969 in commerce. Thus, Mohanlal armed his son with basic knowledge of the rolling mill and instilled industrial spirit in him. The practical knowledge boosts the moral of a youngman and makes him self confident. He knew his capabilities while accepting a challenge or taking risk.
Before we move on with Laxmi Niwas saga it would be appropriate to sum up the struggles and success of Mohanlal Mittal.
❑ In the decade of 50s Mohanlal Mittal joined the British India Rolling Mill as a magnaging partner on the strength of his previous mill running experience. He did not have to invest anything except his industrial talent and experience. This connection with iron and steel decided the future of Mittals.
❑ After independence the country was in industrialisation mode but private players had minor role in it. Big dams were being planned to boost the agriculture based industry. New industries were being set up and five year plans were laying heavy emphasis on engineering sector. The railways were drawing plans to extend networks to the farthest corners of the country. For all those works iron and steel was needed in great quantities. But there were only two steel producers namely, Tisco and ISCO.
❑ The government realised that the supply of steel fell too short for the demand. It grudgingly admitted that without involving the private sector it won’t be possible to meet the demand. So, the industrial policy was amended to allow private players in the steel industry. Thus, the steel doors opened and the situation became favourable for the ambitions of Mohanlal Mittal.
❑ But the door was not fully open. The government controls still pinched. Licence and permit regime ever breathed down the neck of a private steel entrepreneur.
❑ Mohanlal Mittal had gained good experience of running a rolling mill. To take advantage of the improving industrial scene he registered a company by the name Mittal & Sons. The firm started to buy scrap from Hindustan Shipyard. The scrap was used in the rolling mill as raw material to produce steel as its product. Mittlas had branched out to Andhra Pradesh and were based in Vishakhapatnam.
❑ In 1956 Mohanlal Mittal established ‘Andhra Steel Corporation’ at Vishakhapatnam and started several small rolling plants.
❑ In the beginning Mohanlal had started steel production operations with his son Laxmi Niwas. Then, Laxmi Mittal had not gained his individual and indepenedent identity as an industrialist.
❑ Laxmi Mittal graduated in 1969. His younger brothers Pramod and Vinod were than 13 and 12 year olds respectively. For Mohanlal his elder son was very helpful as he was receiving education and assisting him in business as well.
But Laxmi Mittal’s horizon of ambitions was not visible. How could one be satisfied with a piece of blue who would be aiming for the entire sky?
