An old advertisement of Tata Air Lines from Jayaji Pratap Newspaper established by the Scindias and a painting of Maharaja Jiwajirao M. Scindia working from the same newspaper. Image Credits: Wikimedia Commons.
In the latter half of eighteenth century the warrior who towered over others as a colossus in South Asia was Mahadji Scindia, known alternatively as Madhavrao Scindia. From rustic origin to regal splendour, Scindias traversed a long path to glory. Mahadji Scindia was an intelligent strategist and seasoned warrior who conquered all the four erstwhile Mughal capitals at different points of time Agra, Fatehpur Sikri, Delhi and Lahore, and not just that, he crushed the power of the mighty British at Wadgaon and threatened them of launching a campaign to conquer Calcutta, majestic right? But indeed there was a time when circumstances made him live in poverty. After loosing his mighty Scindia army while fighting against Afghans in Panipat, Mahadji Scindia had to build his army again from scratch and for that he needed funds.
The splendour of Gangajali- His mother Chimabai Scindia and wife Gangabai Scindia gave their personal jewellery to him, so that he may sell them to procure much needed funds to reestablish the Scindia army. It was then that Mahadji decided to christen Scindia wealth as 'Gangajali' after Gangabai Raje Scindia, this wealth went on to grow exponentially over the years and became one of the biggest treasures of South Asia. A Noble of Scindia named Gangajaliwale looked after the Scindia treasury, from the times of Maharaja Daulatrao Scindia. The family held Sardari rank for some time but subsequently this rank was withheld by the State and a cash 'Muafi' amounting to Rs.5000 annually was conferred on the family as a 'darakh'. During the revolt of 1857 money from Scindia’s treasury was given to the freedom fighters to fund their fight against the British, Maharani Tarabai Scindia ordered Scindia state treasurer to open the Scindia treasure for the freedom fighters.
Financial Strategy- Scindia’s financial strategy was the creation of funds for nation-building purposes without having to recourse to the taxpayer’s pocket every year. There were as many as 17 funds, both large and small. No portion of the principal of a fund nor its guaranteed interest was taken into the general finances of the State. Since each fund was self-contained and exclusive, the specified object for which it was created was carried out only to the extent to which the interest on the fund permitted.
The first permanent railway loan from Scindia State to the Government of India brought a permanent income in interest to the State, it lent Rs. 75 lakhs for the construction of the Agra-Gwalior portion of the Great Indian Peninsular Railway. In the following year, a similar amount was advanced for the Indore-Nimach section of the Rajputana-Malwa Railway. It was later followed by other foreign investments which became a permanent feature of Scindia finance. Indeed the interest that accrued from these investments was by itself sufficient to maintain several departments of State. Scindia State’s financial strategy empowered it to build hundreds of miles of metalled roads through the State; to construct large irrigation works; to create Shivpuri, a remarkably fine hill station so on and so forth.
Maharaja Madho Rao Scindia
“No prince to this day, it is believed, takes so small a portion of the total revenues of his state as did Scindia."
- MADHAV RAO SCINDIA OF GWALIOR 1876-1925, book by H. M. BULL AND K. M. HAKSAR.
The structure of Gwalior’s finances was laid down by Maharaja Madho Rao Scindia who insisted that the budget be cast in five parts, each self-contained with its own resources and own spending programme. During the life-time of Maharaja Madhav Rao about Rs. 2,50,00,000 was spent on irrigation, and he took special care that his education plans should not outgrow the funds available in future years, by laying down an education fund which yielded an important proportion of the money needed year by year. Being a quintessential “Vikas Purush” of princely India, he came up with the idea of starting factories with State encouragement, and the Gwalior Leather Factory was set up in 1912 to be followed soon after by a number of other undertakings all of which provided employment for State subjects and enabled Gwalior public money to be spent in Gwalior. Let’s look at some of the major financial decisions taken by Scindia Maharajas that played an important role in India’s growth story.
Tata Iron and Steel Company - In order to support Swadeshi enterprise, Maharaja Madho Rao Scindia invested a princely sum of Rs 4,00,000 for the establishment of TATA IRON AND STEEL COMPANY to create an alternative to British industry in India, Girish Kuber in his book “The TATAS the family that built a business and a nation” has mentioned about the Scindia contribution to Tata’s success. The anger against British imperialism was growing and the overwhelming angst against Indian resources being used to make the British rich was spreading across Bengal. This kindled a handful of rich businessmen in India to support the Tata project.
Dorabji Tata got an advantage of this wave of patriotic fervour and appealed to all Indians, 'Don't you want to participate in the first such project in India?' He formed a limited company on Aug. 26, 1907, and opened a public issue worth Rs 23 crore. His own investment was nearly 25 lakh. The shares available to the common man were worth Rs 15 crore. The very next day saw long queues outside the Tatas' Navsari Mansion in Bombay. The rich picked up their lots while the common man invested in small amounts. Nearly 8,000 people had invested within two weeks. The news reached the Maharaja of Scindia, who put in a princely sum of £400,000! (1£ in 1907 = £ 154 at today's rate) The company was named the Tata Iron and Steel Company (TISCO; Tata Steel today).
Scindia’s help to Tata did not end here, post World War I, Indian industries were effected badly, Tata Steel's only regular customer, Japan, was shaken up by an earthquake, leaving demand drastically reduced. Production was reduced to such a low that there was a question of finding money to pay wages to the workers. When the Imperial Bank of India (State Bank of India today), banker to Tata Steel, refused to extend a loan to the Tatas, the fear of winding down loomed large on Tata Steel. The Gwalior royal family had invested earlier in Tata Steel and were willing to extend a helping hand, it gave a loan of Rs 1 cr to save TISCO.
Delhi Transport Corporation- Till 1935, the capital of British India Delhi did not have an organised bus service in place. Maharaja Jiwaji Rao Scindia, decided to start the Gwalior and Northern India Transport (GNIT) Company for a better public transport system and bought 160 buses to provide better public transportation to North India. The General Manager of this company sat in Scindia House at Connaught Place. Scindia House was originally bought by the Maharaja as office space for his other company Scindia potteries. It was only in May 1948, the Centre took over the Scindia's GNIT and renamed it as the Delhi Transport Service and in 1971, renamed it as the Delhi Transport Corporation (DTC), thereafter the Centre gave operations to the Delhi government in 1996. DTC is the largest CNG-powered bus service operator in the world with a fleet size of 3,762 buses (as on April 1, 2021).
Birlas and Textile Sector- In order to promote the industrial development of the former Gwalior State and to facilitate the establishment of certain industries in the State, Maharaja Scindia on the recommendation of his Minister for Industries, Commerce and Communications, made an order on Jan. 1, 1947 exempting from any form of taxation for a period of twelve years the income of certain industries and factories which M/s. Birla Bros., Ltd., Gwalior, intended to establish in Gwalior State.
Consequent to this order of the Ruler, an agreement was entered into between the Gwalior Government and M/s. Birla Bros., Ltd., on April 7, 1947, for the grant of certain facilities, concessions and exemption from taxation in connection with the establishment and starting of certain industries mentioned in the agreement. One of the industries specified was the rayon silk manufacturing factory which included production of rayon or other synthetic fibres, yarns, and knitting, weaving and processing of such fibres and yarns. In 1951, the Maharaja of Gwalior offered land in Nagda to set up a viscose staple fibre (VSF) plant. Abundant water resources and proximity to textile markets in Bombay and Ahmedabad made Nagda the right choice to set up a manufacturing unit. Grasim has been a trailblazer. It filed the world's first patent for developing pulp (raw material for manufacturing VSF) from mixed hardwood. Later, it established the world's first bamboo-based rayon-grade pulp plant and also became the first Indian company to set up manufacturing units outside India.
Scindia Steam Navigation Company Ltd- Maharaja Madho Rao Scindia acquired the ship Empress of India, from the Canadian Pacific Railway Company. The Director of the Royal Indian Marine and his officers acted for Scindia in the matter of buying, altering, and refitting the Empress of India of London, and changing her to the Loyalty of Bombay. This was done in October 1914, and within four months from the time war was declared the hospital ship Loyalty was ready to begin her good work and assist in the relief of suffering humanity. The cost of buying and fitting out the ship was approximately £120,000, and the expense of her up-keep for four years was £360,000, the total being nearly half a million sterling. Businessmen Narottam Morarjee and Walchand Hirachand established a syndicate to form a syndicate and soon Sir (then not knighted) Lalubhai Samaldas and Kilachand Devchand joined the syndicate. They bought the Ship Loyalty Maharaja Scindia had got to India. Within a month's time, on March 27, 1919, the Scindia Steam Navigation Company Ltd was registered with an authorised capital of Rs 4.5 crores. When Scindia Steam Navigation Company's first ship, Loyalty, set sail for the UK on April 5, 1919, an Indian flag was unfurled in international waters for the first time in modern maritime history. Appropriately, since 1964, April 5, is celebrated annually as India's National Maritime Day.
Finance For Service- For his own Privy Purse Maharaja Madho Rao Scindia fixed the amount he took from the Gwalior revenue at two per cent. In many an Indian State no distinction was made between the private expenditure of the Ruler and that devoted to the general administration. Even in principalities where such a separation was made, the total taken for the Privy Purse usually ranged from five per cent of the total revenues upwards. No Prince, it is believed, took so small a portion of the total revenues of his State as did Scindia. V. P. Menon who played an important role in the integration of Indian states along with Sardar Patel mentioned in his book “Story of The Integration of Indian States” that the rulers of Gwalior have not as a rule been prone to extravagance. Successive rulers had, in fact, exercised the greatest economy in their administration. Late Rajmata Vijaya Raje Scindia in her autobiography that when more that 500 princely states gave independent India 74 Crores of Rupees, Scindia alone gave 54 Crores. The financial contribution of Scindia royal family to India has indeed been enormous.
(The opinions expressed in this article are those of the author. They do not reflect the opinions or views of ETV Bharat.)
