Kasturbhai Lalbhai

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Kasturbhai Lalbhai

Born December 19, 1894(1894-12-19)
Died January 20, 1980 (aged 85)
Occupation Industrialist
Website
www.arvindmills.com

Kasturbhai Lalbhai (19 December 1894 – 20 January 1980) was an Indian industrialist. He was widely perceived as a nationalist businessman akin to G. D. Birla.

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[edit] Early life

Kasturbhai was born in a Jain family that owned textile mills in Ahmedabad located in current-day Gujarat. His school education took place in Ahmedabad and he matriculated in 1911. In 1912, when he was studying in college, his father died and being the second son, he was asked to discontinue his studies so as to help in the family business. His father Lalbhai had divided property among his brothers only in the recent past; as his and his sons’ share, Lalbhai had received Raipur mills, a new establishment. By the time of Lalbhai's death, the operations of the mill had not yet stabilised; hence, Kasturbhai had to take care of operations closely. He started off as a timekeeper in the mill, but fed up with the repetitive nature of the job, he started working with suppliers of the mill and travelled far and wide to understand the supplier market. The boom in demand during and post-World War I helped him in stabilising the operations of the firm.

[edit] As a nationalist businessman

Ahmedabad was one of the prominent hubs of textile mills in India, and by virtue of running a successful textile mill there, Kasturbhai increasingly began to represent the voice of the mill-owner community. In 1918, there was a strike by mill workers in Ahmedabad. Mahatma Gandhi had just returned from South Africa and was sympathetic to the demands of the workers. Kasturbhai represented the mill-owners (among others) and the stalemate in talks led Gandhi to undergo his first fast ever for a public cause. However, Mahatma was apprehensive that the mill-owners would give in to the demands more with a view to ensure his well-being rather than address the issue on its merit. Kasturbhai understood and appreciated his concerns and became his staunch follower after the incident. Kasturbhai was also on friendly terms with Sardar Vallabhbhai Patel and contributed generously to the Indian Independence Movement. On the economic front, massive depreciation of the rupee meant that Asoka mill, another of his establishments, could stabilise operations only in mid-1920’s as it ordered for imported machinery. Due to the Montagu-Chelmsford Reforms allowing for limited franchise, Kasturbhai got elected to the central legislative assembly in a seat reserved for mill-owners’ associations of Ahmedabad and Bombay with a 38-33 vote in an electorate of 73. Though he was an independent, he aligned with the Swaraj Party. As a member of the assembly, he persuaded the viceroy to repeal an excise duty on textiles. In 1931, he founded Arvind Mills that manufactured fine and superfine varieties of clothes as opposed to the coarse variety of cloth produced till then by the Indian mills. He also had to bail out several mills belonging to his close relatives; he took over the operations and turned them around in a short time. By 1939, his business empire was rated the seventh largest cotton consumer. It had 12% of India’s spinning capacity and 24% of Ahmedabad’s total weaving capacity. Despite being a mill owner, he surreptitiously supported the 1942 strike by textile mills in Ahmedabad, which was called in support of Quit India Movement as he viewed himself more a nationalist than a businessman. The strike went on for three months. India achieved independence in 1947, in part, due to the Quit India movement.

[edit] Post-independence

In 1952, he started Atul (literally beyond compare) which is located in Atul , India’s first modern dyestuff manufacturer in collaboration with American Cyanamid. It was inaugurated by India’s first prime minister, Jawaharlal Nehru. With time, Kasturbhai started handing over the operations of his businesses to his relations. He devoted more time to public activities. He was awarded the Padma Bhushan, India’s third highest civilian honour in 1968 by the Government of India. He retired from business in 1977 and died in 1980 in Ahmedabad.

[edit] Legacy as a businessman

Kasturbhai was known for ethics despite being a stalwart of the cotton mills industry, which was notorious for underhand dealings in those days. In 1948, his business group was named in the list of business houses indulging in black-marketing. R. K. Shanmukham Chetty, the finance minister and a friend of Kasturbhai had to resign for reportedly suggesting that its name be dropped from the list. The Income Tax department followed its allegations with a spate of inquiries and after almost ten years, absolved the group of any wrongdoing. This lent authenticity to the ethical stature of Kasturbhai. At the same time, he was known to be a hard bargainer, especially, in purchase of capital-intensive equipment such as machinery. However, he always ensured that he bought only state-of-the-art machinery in terms of technological advancement. Despite the scale and scope of enterprises he established, the wealth of experience he had amassed over the years and more importantly, the friendly relations he had with the leaders of the Indian government, he remained a regional entrepreneur with all his projects located in Gujarat and most of them within Ahmedabad.

[edit] Legacy as a builder of institutions

One of the most important roles played by Kasturbhai was in promoting institutions that would serve the country and the industry well. As a youth, he had to drop mid-way out of college to help in his family business, and this unfulfilled desire for higher education found expression in his institute building. As a director of the Reserve Bank of India from 1937 to 1949, he ensured that Indian employees were groomed well to run operations in an Independent India. He along with Sheth Shri Amrutlal Hargovindas, Shri Ganesh Mavlankar started the Ahmedabad Education Society in 1936, which later evolved into the Gujarat University. The society also donated land for the establishment of the Indian Institute of Management Ahmedabad (IIMA). Kasturbhai, along with Vikram Sarabhai, was the driving force behind IIMA. He was on the board of IIMA but declined to accept the position of its chairman. Today, IIMA sports a Kasturbhai Lalbhai Management Development Centre and has a Kasturbhai Lalbhai Chair in Entrepreneurship. He commissioned world-renowned architects such as Louis Kahn and Charles Correa to design some of these institutes. He promoted ATIRA – The Ahmedabad Textile and Industries’ Research Association before independence, which proved to be effective in increasing the competitiveness of the mills in Ahmedabad. He also established the Lalbhai Dalpatbhai Institute of Indology in 1962. Thus, he was not only known as a businessman but also an institute-builder.

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