Conglomerate Big Business Groups in India:
Some Traits of Tycoon Capitalism
FOR well-known historical reasons, the big business houses in India have been investing capital in any field to establish a business, regardless of its relation to their own business as long as there was scope for profit. Thus, they have come to own various kinds of business enterprises which have nothing to do with each other. Rooted in the difficulties faced by the new-fledged indigenous enterprises in a colonial set-up and engaged predominantly in trade in a speculative background, this tendency to diversify interests has been a direct legacy of the managing agency system.
The managing agencies were the vehicles for the entry of the Indian middleman trade and money lending capital into the sphere of industrial capital. The sphere of operation of such capital has been principally semi-feudal Indian villages. "The supreme achievement of managing agency has been to draw Indian capital away from its traditional preference for land investment into the field of industrial participation.351 The managing agencies were also a means of "disseminating capitalist factory enterprise".2 The majority of the managing agencies had control over only one company, a smaller number controlled several, and only a handful controlled many. As production and capital became more concentrated, there was a growing tendency to seize as many compa"