Tag Archives: bajaj





For, a very long time now that dips beyond pre-independence days, Marwaris have been the back bone of Indian business; considered almost a generic term for business in India. They crafted some of the country’s oldest industrial empires- Birlas, Dalmias, Jhunjhunwalas, Goenkas; the list is long and accounts for a quarter of Indian names in the Forbes billionaire list. And in the process Marwari surnames have almost become household names.


And there is no denying the fact that first generation of Marwari businessmen started in a very modest way. There are stories galore about them, which you tend to believe, even without feeling the need to ratify; and knowing the finer details owing to their present stalk in Indian business scenario. For, you can’t help but believe in the hearsay that late Ghanshyam Das Birla mortgaged his lota (a round waterpot, typically of polished brass) in Hissar long ago, then a small town of Haryana for some pennies to start his business in the early twentieth century and when India liberated from the British Raj the worth of Birla group was somewhere around 60 lakh. Their histories and life philosophy of ‘simple living and high thinking’ has led them to the vying mantra of success and has always been a matter of great inquisition for many other communities that wanted to emulate Marwaris.

And there penchant to tread unknown areas for new business opportunities is time immemorial. They swarmed into Bengal and North-East of India as business entrepreneurs when many in India feared these areas.

Thomas A Timberg, author of a recent book, ‘The Marwaris’ wrote his doctoral thesis on them at Harvard back in 1978, and he has something interesting to say about Marwaris in an interview with Times of India.

In popular belief all shopkeepers and traders are Marwaris. But going by the definition of All-India Marwari Sammelan – all of those traders and business families from Rajasthan and some adjacent areas of Haryana are Marwaris. The Jodhpur region of Rajasthan is called Marwar. But many of the leading business families hail from the Shekhawati belt- Sikar, Jhunjhunu, Churu and Nagaur districts. Some are from Jaisalmer area. So I include the whole state of Rajasthan.

And, on how they became so successful he says, ‘It’s a long story.’ But what can be said is they all had common features that helped in their success. Starting from about the 1820s, they moved to Bengal to build a network of traders that covered large parts of the countryside too. This upcountry network was indeed their backbone and also the school for learning the ropes.

They developed a local sophisticated system of book-keeping called the ‘parta.’ By early 20th century this was updated in real time through phone. They had a well though-out personnel policy, with loyal and qualified people placed at key points. They had a system of incentives for good performance. Finally, they were very adaptable to changing economic or political situations.

In the 1970s, during the height of Naxalite terror, I met a Bengali lady and a Marwari insurance agent at breakfast in the guest house, where I was staying. The lady got irritated at the man’s boasting and said that the Naxalites would get him someday. The trader chuckled and said, “Before that can happen, we would join them.”

And to build a trade, one needs money. So, where did all the money come from, initially? Timberg feels different families have different tales. But during the British times, some of today’s successful families took advantage of the speculative market, as in opium and also jute. In the early 20th century when the British were easing off on opium (which they exported to China), some Mawari families in Bombay made a killing. They used their connections in Malwa where opium was grown to do so. Another family owes its origin to playing the international silver market through tiny loans. What these stories tell us about this community is that they had the ability to take risks and also that they acted on market information. And of course this should be seen in the context of tremendous hard work that these families did in going to distant places, staying in community messes (basa) and building their trade from the ground.

Their entrepreneurial spirit fared well even in the Nehruvian, economic regime controls, and most seem to have done pretty well for themselves. A 2010 study by Tarun Khanna and Krishna Palepu of Harvard Business School has shown that the share of Marwari and other family business groups in the ownership of large scale business in India is not so different from what it was in 1939, 1969 and 1997. Some like the Bajaj family, suffered for several years. Dalmia too had problems. But by and large the Marwaris benefited from their networks and especially, from their ability to negotiate with the governments of the day.

And how about the modern Marwari business houses following the same traditional practices that made them successful earlier? Some features may survive, others may get replaced. A lot of study has been done on the academic question: is tradition hostile to modernity? The Marwaris have successfully gone from being traders to industrial houses (Birlas, Goenkas, Dalmiyas) they have both tight focus and diffuse focus groups. They have largely resolved the succession problem, something that dogs every family business.

They have embraced new technologies, especially IT. In fact Birlas gave up their traditional book-keeping system for an IT based system a few years ago. Many have encouraged their daughters to study and take over business responsibilities. In fact most of the young Marwaris are now educated in Western Business schools; however there are exceptions and I’m only talking of the general trend.





Agriculture remains the mainstay of India, even when it doesn’t contribute sufficiently to the Indian GDP. Around 65% of Indian population depends directly on agriculture when it only accounts for 22% of the GDP. But Indian agriculture now needs to undergo a paradigm shift to feed double the mouths since the last green revolution. Further, farm mechanization, agri-inputs, cropping patterns and seed varieties need to be refurbished to suit new agri challenges such as continuous soil erosion, depleting ground water levels, alarming farm labour situation and sparse market linkages. And this calls for a major overhaul on the production side of agriculture. To tackle issues such as, increase in farm produce and better farm economics, which brings us to the moot point of need based farm mechanization.


India which is 17% of the world population. But it still cultivates with either the draught animals, which are inefficient and expensive to maintain or by high horsepower tractors owned by large farmers, which are few in numbers. So the daunting question is, when more than 80 percent of the Indian farmers are small and marginal why they are not in a position to purchase tractors below hp (horsepower) 22. Is it because of the government policies that are blocking the smooth transition from draught animals to small tractors and power tillers? and what is more baffling is:

  • Small farmers don’t have a requirement of large tractors. With the amount of land they hold a tractor of 25 hp engine or more is not needed in small and medium farm size. Especially, when statistics for power availability for various agricultural operations, which is an indicator of mechanization has increased from 0.3 kilowatt per hectare in 1971-72 to 1.4 kilowatt per hectare in 2003-04.
  • Even though government puts in subsidies on tractors, farmers don’t get their free will to choose, as large manufacturers step-in to sell their own brands at the behest of Government. So if we are talking of free markets why this nudging?



Tractors in India were imported initially in 1960s mainly from the US and European countries, prime being the erstwhile Soviet Union. Since these countries historically had large holdings, these machines too were manufactured in the range of medium and high horsepower to suit their own land holding sizes.

Thus, started the of lasting culture of medium and high horsepower tractors in India. Even when our land holding size way back in 1960s was far less than the European and American standards and in the range of around 3 hectares.

This as a beginning was understandable but somewhere down the line a course correction was required, which didn’t happen. Presumably, because the entire technology was new, and we were devoid of the basic sense of change or even the skill to adapt. Small was not beautiful then. A similar trend we had in the auto sector where in you had those bulky fuel guzzlers. But then the auto industry caught the imagination of their customers which farm mechanization industry didn’t.


In the year 1961-62, first time around 880 tractors were assembled from kits purchased from British and German firms. Imports stopped in 1977 but industry’s extended honeymoon with these manufacturers continued as hand holding was required to build sufficient production bandwidth. Although, India got independence in 1947 and the socialist leaning government’s five-year plans of 1950s and 1960s aggressively promoted farm mechanizations, our production of tractors was sluggish. But by late 1980s tractor production moved upwards to 140,000 units per year, yet the prevalence rate was just 2 tractors per 1,000 farmers.


Post economic reforms in 1991, with the steady pace of change, the production of tractors increased to 270,000 units per annum. And in early 2000, India overtook the US as the world’s largest producer of four-wheel tractors. FAO estimated in 1999. Of the total agricultural area in India, less than 50% was under mechanized land preparation. Thereby, indicating large opportunities still existed, and projected this in favour of small machines. Steadily growing, India in 2013 produced 619,000 tractors accounting for 29% of world’s production. And, India currently has 16 domestic and 4 multinational corporations manufacturing tractors.

SOLITARY EFFORT OF 20 HP– Swaraj story:

India had approached the erstwhile Soviet Union in the mid 1960s for R&D and manufacturing support to develop a 20 hp tractor, but they refused. This project was later taken up by Central Mechanical Engineering Research Institute (CMERI) under the council of Scientific and Industrial Research.

CMERI put together a team. They started by studying tractors of other makes that were in the market. Their first prototype was ready in May 1967 but when it was taken for trial it collapsed. Learning from the failure, they developed a second prototype, testing of which was done in October 1968, which proved satisfactory. Independent field trials later at other institutes were also successful. The tractor was called Swaraj. This Company was later promoted by Punjab State Industrial Corporation and turned out to be a blue chip company.

Besides Swaraj no other company tried to delve into 20 hp category for a long time. Until the solo effort was followed by a Delhi based company SAS Motors Ltd that has launched tractor in 15-24 hp category.


In 1960s the average land holding size was around 3 hectares (7.4 acres) and in 2010-11 it declined to 1.15ha (at an average level), which is below 3 acres on a more prevalent terminology. And, with these vital statistics, both growth and technological up gradation should have been in the low horse-power segment or in the power tiller segment. But that is clearly not the case. On the contrary both growth and technological up-gradation has been in the medium and high horsepower tractors, apparently because of foreign influence. Where, more likely the low horsepower range of tractors were discouraged because of low margins and high overheads of large manufacturing corporations and also the fatigue and capital cost of introducing a new genre.

For small and marginal farmers, low priced, small tractors of 15-24 hp was required. This generic need was highlighted as early as 1970 when (NCA )National Commission on Agriculture was set up.

At the turn of the century, India had around 2.67 million tractors, which was more than NCA projections. But category wise the number were skewed. As around 1.47 million tractors were in the 31-40 hp category, 0.65 million were in > 40 hp category and 0.68 million were in < 30 hp category. And only a part of 0.68 million tractors below 30 hp comprised of small tractors for which NCA had projected a figure of over 2 million. This large gap is surprising and reveals the callous approach of the government towards small farmers. One can perhaps safely derive that non availability made them go for higher hp tractors thereby spoiling their farm economics. And the quantity of power tillers sold was merely seventy thousand.

But then who was responsible for throwing NCA’s calculation, off balance? Well, no one can pin pointedly say who. But yes, to a certain extent the agricultural community as a whole, together with the Indian tractor industry, can be questioned on this. Instead of small tractors they came up with medium and heavy tractors, which benefited only the large farmers, and as a result tractors got concentrated only in a few states which benefitted from the green revolution such as Punjab, Haryana and parts of Uttar Pradesh (See table: some benefit)

Some benefit
Tractor sales over the last five years
States Tractors sales during last five years Area under cultivation
(‘000 hectares)
UP 290,513 17,986
MP 144,049 22,111
Punjab 121,903 4,033
Rajasthan 95,450 20,971
Haryana 89,346 3,711
Gujarat 76,439 10,293
Bihar 72,467 10,743
AP 68,994 14,461
Maharashtra 66,876 20,925
Karnataka 43,163 12,322
Tamil Nadu 38,852 7,474
Orissa 14,473 5,296
Other states 65,210 15,181
Total 1,188,735 165,507
Sources: Economic Survey 2003-04 & Indian At A Glance 2004

We all agree mechanization is an unavoidable farming tool. For, productivity has to increase along with cost and economics, and that alone is sustainable in the long run. But looking at the perfunctory approach of the government, the big question would be whether farmers should go in for small tractors or still rely of animal power. It may therefore not be out of place to mention relevant statistics of animal power.


– India’s 83 million draught animals carry more than 5 times the freight and four times the passenger traffic carried by railways, in terms of originating traffic.

– Draught animal power contributes 30000 megawatt of power.

– It saves 24 million tonnes of diesel per year, worth more than Rs 33,000 crore.

– Draught animals cultivate about 65% of India’s total cultivable land area

– The present value of draught animals (Rs 50,000-1,00,000/pair) is Rs 2,07,500 crore even on a very conservative estimate.

– It would take 8.3 million tractors to replace draught animal power. This would cost Rs 32,490 crore; so then why is this segment not growing?

– Draught animals provide dung worth Rs 5,000 crore annually. Five million tonnes of firewood will be needed to substitute this.

The crisis around the farmer’s traditional tiller- the draught animal is continuously growing. Even though farmers still rely on draught animals their importance is being undermined by tractors.

According to an NCA report, man can provide a power equivalent to 0.07 hp, a woman 0.05 hp, a bullock/buffalo 0.40 hp, a camel 1 hp and a tractor at least 14 hp. In 1951, the farm power available was just 0.25 kilowatt per ha (KW/ha) of which 97 percent came from draught animals. This has now gone up by almost 6 times to 1.40 KW/ha and the corresponding increase in food grain by four times, and so an optimum, farm mechanization, is the need of the hour.

Farm mechanization is also important from the aspect that 65% of our cultivable area consists of dry farming or rain fed farming where the window of soil bed preparation is very small and if we are unable to do seedbed preparation and sowing in a timely manner, given the receding soil moisture, yields will drastically reduce.

However, 70% percent farmers still use draught animals where they can easily be upgraded to small farm mechanization tools. Such as small hp tractors or power tillers, but for this to happen; government policies should start focusing on the needs of the small farmer.


Draught animals and tractors are complementary sources of power on Indian farms, and will continue like that for many more years, to meet the ever burgeoning demand of power and of increased production and productivity. A report of 1987 says that a 35 hp tractor can prepare a seed-bed and sow 0.2 (ha) in one hour at Rs 270-300 per ha. Bullocks for the same operation require the entire day at Rs 300 per ha. The problem is draught animals have to be fed throughout the year but their optimal use is restricted to around three months in a year.


  • Tractors in India are out of reach for the majority of the farmers. The cheapest being Rs 1.8 lakh almost as much as a new car.
  • Barely 2% of the 115 million farmers own a tractor according to the 1995-96 agriculture, census. Yet they cultivate almost 1/3rd of the countries arable land. This itself highlights the efficient toughness of farm mechanization.
  • Most farmers possessing tractors are rich and own large land holdings. Rate of ploughing is Rs 200-250/hr or Rs 2-2500/hectare
  • But small farmers are unable to reap such benefits. For them a low priced, small tractor of 15-24 HP would be ideal. This need was recognized as early as 1970 when the National Commission on Agriculture (NCA) was set up. After a 5 year study, NCA submitted a long report in 1976, which also recommended the type and quantity of tractors India should have by 2000: 2.08 million tractors and power tillers (a farm machine, with two wheels, to till the soil) below 15HP, 0.12 million medium tractors of 35 HP & 80,000 65 HP tractors, which taken together would total 2.28 million
  • This policy argued that 2.08 million tractors and power tillers below 15 hp were needed for small and medium farmers. Besides, they are also considered more suitable for paddy cultivation — the country’s dominant food grain crop — than medium (25-40 hp) and heavy (above 40 hp) tractors.


  • To graduate from animal tilling to mechanized tilling and that to by small tractors, power tillers and other economical high precision equipments commensurate with land holding size of small and medium farmers, keeping in mind their farm economics.
  • An option less farmer has to buy a 35 hp category tractor that costs around 5 lacs with bank loan at a high rate of interest, even if he doesn’t require this product. This should be substituted by small tractors or even power tillers.
  • GOI provides a subsidy of 25% limited up to 30,000 tractors. Wherein also, the farmer is cajoled to buy certain brands and this needs to stop forthwith, as user of the product should alone be the decider by any diktat of consumerism.
  • Tractors available in the range of 25-40 hp use advance western technologies, which may not be required for small holdings and this makes the product expensive. In fact what is needed is a below 25 hp tractor or a power tiller that is gender friendly and useful for ‘nuclear farming’ just as a nuclear family. The cost of such tractors will bring down the farmers cost by 50%. As against his investments and maintenance in a pair of bullocks, which requires to be fed and taken care of even when it is not generating any revenue, and also serves best only for a time span of 5-6 years.
  • Farmers need to come out of the clutches of debt to make agriculture more exploring, exciting, remunerative, and even status oriented. This can happen only if simple and cheap technologies are used in conjunction and proportion to their earnings. According to 59th survey by NSSO (January-December 2003) out of 89.35 million farmer households, 43.42 million (48.6%) were reported to be in debt. But in a similar survey in 1991 only showed 26% were in debt.