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A Vision of Karmayogi Gujarmal Modi

A V i s i o n o f K arm ayogi G ujarm al M odi First P u b lish ed : August 1 9 7 7

P ublishers :

Allied P u b lic ity Bureau M odinagar-201104


Delhi P re ss, Jh an dew ala Estate^ Rani J h a n s i R oad, New D elhi-110055

A u g u s t 19 77

P rice Rs. 5/-



C ontents

Preface Introduction

v—vi 1—4 5 -1 1

Chapter One

Family, boyhood and early education

Chapter Two

The first step


Chapter Three

The Quest


Chapter Four

Early struggles


Chapter Five

Fresh Laurels at home

4 0 -4 3

Chapter Six

An industrial town is born


C hapter Seven

Further Trials and achievements


Chapter Eight

On the heights


Chapter Nine

The last days

8I— 85

Chapter Ten


86— 93


We have few biographies of Indian

businessmen because

their routine lives have little to attract an author. Yet it is these very men who by slow and patient efforts first perceive their goal and then by steady and powerful strides, march forward till

it is achieved, It is indeed fascinating to see how many of th em s ta rte d fro m h u m b le b eginnings

a n d grew in to b ig in ­

dustrial giants, to watch the step-by-step emergence and growth o f their sharp minds and to see them emerge as distinguished men.

Often it is a story not merely o f how an industry is built

but of how the profits are spent for constructive and creative schemes. Rai Bahadur Gujarmal Modi was a man who knew how to not only make a fortune but also how to spend it fruitfully. He had all the qualities which make a successful m an of busi­ ness and honesty, resoluteness, circumspection and, what is more im portant, a powerful imagination and exemplary courage which made his m ost am bitious schemes successful.

He was

an industrialist, a patriot and a philanthropist whose service to the country was as great as his love for humanity was profound. This book is more a chronicle o f Mr. M odi’s life than a biography.

The author had the good fortune o f coming into

close personal contact with him and was, therefore, privileged to know him and his family at close quarters.

Mr. Modi often

talked to him about his past life in a reminiscent mood. author also had the benefit o f getting inform ation

The about

Mr. Modi from the members of his family.

It was only after

1972, when Mr. Modi began to keep indifferent health, that the author could not meet him regularly, and so the narrative since th at date is sketchy, even disjointed. An attem pt is however made to give an adequate account of Mr. M odi's life and a balanced estimate of his character and achievements. If a more knowledgeable reader finds any factual errors or lacunae in this account, the fault lies with the

author. P. P. S. C h a u h a n

Professer’s Lodge, Modinagar 9 .8.1977


On the main State Highway No. 45 as you pass by the spraw足 ling yard of the Government Ordnance factory at M uradnagar, you will see on your right an old and friendly signboard ex足 tending a warm welcome to M odinagar.

This is the entrance

to the industrial town o f M odinagar, a centre o f intense indus足 trial activity.

M odinagar, the source of employment to several

thousand families, lies about 50 kilometres north o f Delhi. In every respect, it is a model town situated in an agriculturally fertile and climatically salubrious temperate zone. It is a selfcontained city with a variety of educational institutions for boys and girls, workers, clubs, subsidised canteens, dharamshalas (public inns), guest houses, hospitals, libraries, hostels and spacious parks and play grounds. Until the year 1932, this was a sleepy village known by the name o f Begumabad comprising a few huts, a small post office and a police post. o f Begumabad.

Nearby there was the small railway station

The arterial road and the railway station were

the only signs o f industrialisation in this part of the country where life otherwise was leisurely and undisturbed. vellers along the state

Few tra足

highway took to the winding path

leading to the village and only an occasional hey-ho of the cart drivers disturbed the sylvan calm o f the area.

D uring the day,

peasants tended their growing crops in the fields, but in the evening as night descended, the quiet village was transformed into a place infested with antisocial elements, dacoits, sansis and

2 marias. The last were members o f criminal tribes often rounded up by the hand o f law and put behind bars.

Only those pre足

pared to risk their lives would dare pass through this area after dusk. The area, which grew sugarcane and green vegetables then, is now a bustling industrial town boasting of more than twenty medium and large scale industries and employing more than 18,000 workers.

The people living in this area are hard work足

ing, peace-loving and deeply religious.

Behind the big-size

mansions flanking both sides o f the main road, there are rows o f residential quarters built for the employees working in the various industries in the town.

The houses neat; clean and

close to their place of work, provide comfortable accommo足 dation to the workers. The first factory to come up in this area was a small sugar mill with an initial capacity of crushing 800 tons o f sugarcane per day and employing about two hundred workers. in the year 1933.

This was

It marked the beginning of the long process

of industrialisation which was to change the entire landscape. The

capacity o f the sugar mill was quickly expanded to

1132 tons of sugarcane per day.

About seven years later came

the vanaspati factory whose popular brand, Kotogem, conti足 nues to be a household name.

Thereafter, during the period

from 1940 to 1963 came the soap factory, the oil crushing plant, the paint and varnish factory, the glycerine extraction plant, the cotton textile mill, the lantern factory, the torch factory, the arc electrodes factory, the steel mill, the silk and yarn mill and the thread mil! among others all in quick succession. Who is the moving spirit behind this vast industrial complex embracing in its fold more than twenty industries and supporting a population of 80,000? Mr. Gujarmal Modi, the industrialist with a vision was an

embodiment of enterprise.

The story

of the development of M odinagar is the history of his dogged determination.

3 Tall, well-built he stood erect even in old age.

He could

be seen with a walking stick in his hand while he took his m orn­ ing and evening walks, but the stick was more a symbol o f com­ mand than a necessity.

The penetrating gaze underneath his

dense eyebrows indicated a deep insight bom of sincere hard work and profound experience.

He had his hands on the pulse

o f almost every single individual who mattered in one or the other of the various factories run by him or by the members of his big family.

He discussed and solved the intricate prob­

lems of the industry with the same ease and attention as he listen­ ed to and resolved the difficulties of the smallest of his numer­ ous workmen. It is well-known that almost three-fourths of all the factories and buildings in M odinagar were built by Mr. Modi, or Rai Bahadur as he was called,

under 1'is personal


took rightful pride in claiming that h. had been able to com ­ plete the construction o f almost every building in the town in about nine m onths’ time. Why nine months for every building, big or small?

Quickly would he add, “ Well, God creates new

life in that much time.

I am only following what the Almighty

has been doing all along.”

U nder his personal supervision

many a wall was pulled down, beams re-laid and the position of the shuttering changed to accommodate the practical sug­ gestions made by him during the process of construction. The personal life of Mr. Modi was a marvellous blend of all that is modern and traditional.

As a person he was a perfect

synthesis o f the feudal and the progressive.

He would not

sacrifice all th at was Indian for the sake of the so-called modern values.

He led a simple life deeply dedicated to his work. He

commanded full respect among the members of his household in the same way as he exercised full control over the numerous factories owned and run by him.

A t his behest everyone in the

household visited the temple in the morning and bowed before their elders to seek their blessings.

Himself a deeply religious

4 man, he attended religious discourses almost every day and at times held philosophical conversations with learned people of all faiths on the eternal problems o f man. There he meditated and prayed for spiritual solace. Such was the man who from a modest beginning rose to the towering heights o f an industrial giant.


C h a p te r

O n e


M r . G u ja rm a l M odi belonged to a fam ily which had a tra 足 d i t i o n o f business. His great g ra n d -fath e r M r. R am Baksh J V f o d i w a s a simple, kind-hearted, h ard w o rk in g and honest b u s i n e s s m a n . H e had set up his business in M ahendra G arh w h i c h w as then know n as K a n a u r an d w as the capital o f the s t a t e o f N a w a b o f Jhajjar. U ntil 1857 M r. R am Baksh M odi a r r a n g e d civil supplies fo r the arm ies o f th e N aw ab. D uring t h e f i r s t rebellion o f 1857 when the B ritish R egent was com pel足 l e d t o leav e the state of Jh ajjar, he en su red his safe conduct to R e w a r i . L ater, when the rebellion was suppressed and the p r i n c e l y state o f Jhajjar came under th e sw ay o f the British, the r e s p o n s i b i l i t y o f arranging civil supplies f o r the British forces s t a t i o n e d a t K a n a u r was once again e n tru ste d to the experienced a n d c a p a b le hands o f the M odi family. T h e State was later on g i v e n b y th e B ritish to M ah araja M a h e n d ra Singh o f P atiala as a . r e w a r d fo r the help rendered by him to th e B ritish during the r e b e l l i o n . T he nam e o f K a n au r was then ch an g ed by the M aha足 r a j a t o M a h e n d ra G arh after his own nam e, a n d the M odi family w a s n o w asked to arrange civil supplies f o r the British forces s t a t i o n e d a t P atiala. It was, thus, th a t the business activities o f t h e M o d i fam ily came to be extended to P a tia la where Mr. R am B a k s h M o d i established a branch o f his business. A f t e r the death o f M r. R am Baksh in 1857, the family b u s i n e s s was ably carried on by his son M r. C hiranji Lai M odi, t h e g ra n d -fa th e r o f M r. G ujarm al M odi. A s tim e passed, the task

6 o f arranging civil supplies fo r the whole range o f British c a n to n 足 ments from K a n p u r to Peshaw ar cam e to be entrusted to the M odi family an d this w ork was carried on by them efficiently and to the entire satisfactio n o f the arm ed forces. F o r th e sake o f efficiency and convenience, M r. C hiranjiL al shifted the h e a d 足 quarters of his fam ily business to M ultan (now a part o f W est Pakistan) with a d d itio n a l branches at K anpur and A m b ala and also a t N a u sh e ra an d Jullunder. It was at M ultan th a t on 21st October, 1875, M r. C hiranji Lai was blessed with a son whom he nam ed M u ltan im al after the city o f Multan. M r. M u ltan im a l M odi was also a gifted businessm an like his father. W hile helping his fath er in business, Mr. M u lta n i足 mal in his own r ig h t cam e to be know n for his honest dealings and shrewd b usin ess acum en. He told his father that he w ould join neither arm y n o r civil service nor any other service, but would set up his o w n independent business. He had an im m ense measure o f self-confidence an d his discerning father gave him the desired consent. H e had no difficulty in raising the initial finance required for the business. M r. M u ltanim al started his career as a commission ag e n t in foodgrains a t P a tia la . G radually, he started supplying w h e at to a flour mill at P a tia la which was then run in partnership b y a few Parsi and S ikh officers. F o r some years business a t th e mill ran sm oothly. But suddenly the mill suffered heavy losses and the owners w e re obliged to dispose it of. This offered a natural o p p ortunity to M r. M ultanim al to expand and diversify his business. He p u rc h a se d the mill in 1894 and with his m a n a 足 gerial skill and b usiness talent reorganized its working. T h e business flourished rapidly. Mr. M ultanim al established his nam e n o t only in business circles but also in t h e field o f public service. It was due to h is popularity and u n d e rsta n d in g of public affairs that he was m ad e an honorary m ag istrate an d was also elected City F a th e r o f Patiala.

He was th e first and also the last in the state to g e t

7 the title o f R ai B ahadur. This was a fitting recognition o f his services as a businessm an and philanthropist. Two high schools were am ong the m any public welfare institutions established o r patronised by him . He also contributed liberally to the gosfialas besides form ing a public welfare council to lo o k after the welfare o f others. He took keen interest in Persian language and literature and left behind several m anuscripts in th a t language M r. G ujarm al M odi was the second child in the family of M r M ultanim al M odi who m arried four times. His first wife, who hailed from the family o f the Dewan o f K hetri, gave b irth to a d aughter and died four years after m arriage. His second m arriage was solemnised with C handi Devi, daughter o f N an ak R am o f N aw azpura, D istrict N arnaul, in 1896. M r. M ultanim al did n o t have any son so far. Being an orthodox H indu, the elders in the family believed th at the birth o f a son was necessary to ensure one’s salvation after death. There was a natural desire, therefore, th at there should be a son in the family. This was, perhaps, one o f the m any reasons which had impelled him to m arry again after the death o f his first wife. W hen he was blessed with a son on 9th August, 1902 a t K an au r (Shravana S hukla Shashthi o f 1859 according to the H indu calendar, m ore popularly known as the V ikram i C alendar) there was great rejoicing in the whole family. The b irth was cele­ brated with songs an d music because this was the fulfilm ent o f a long cherished desire for a son. G ood wishes continued to p o u r in for days and weeks. The astrologers were sum m oned a n d they stated th a t a t the time o f the birth, the position o f the stars was extrem ely favourable for the child. The devout father then arranged a Yagna followed by all the cerem onies th a t n o r­ mally take place in an orthodox H indu family after the birth o f a son. But this rejoicing in the family and the m ood o f gaiety lasted barely six days as the m other developed sepsis and all the m edical a id th at was available in those days could n o t save her.


8 little child was left w ithout a m other. This naturally created num erous problem s for the fam ily. A t first it was decided to bring up the child on bottle feeding. But the elders in the family resisted the idea. They firmly believed th a t breast-feeding was the only way to save the child, the only m ale issue so far in the family. The father could n o t resist the wishes o f the elders and thus a foster-m other from the nearby village o f M ajra was engaged to breastfeed the child. The grand-m other w ould visit the child and the wet nurse alm ost every other day to ensure th a t the child received full a t­ tention. But after a few days b o th the foster-m other and the child were brought over to P atiala w here they could stay under the direct supervision o f the grand-m other. The birth nam e o f the child was R am P rasad, b u t as time passed, the child was nicknam ed G u ja r after his foster m other whose name was G ujari. T he nam e G u ja r stuck on and the child came to be know n as G ujarm al. T h at is how the little Ram Prasad, who was destined to becom e an industrial m agnate in his later years, cam e to be know n as M r. G ujarm al Modi. M eanwhile little G u jarm a l’s fa th e r was m arried fo r the third time to the daughter o f a w ell-know n fam ily at P atiala. As illluck would have it, th e third wife to o died after a year o f m arried life w ithout leaving any issue. W hen the father m arried his fourth wife, R ukm ini Devi, d au g h ter o f M r. Bansi D h a r o f M a­ hendra G arh, when the young G ujarm al was only 2£ years o f age. It was under her loving care th a t the child received real m otherly affection. By the time G ujarm al was four, his father h ad established his business at P atiala. In those days the m odern system o f pre-prim ary schooling was n o t in vogue. D uring the early years, therefore, the young child was p u t under the care o f a Maulvi at his private coaching centre. In those days education in such single-teacher coaching centres, established privately, was free. In return fo r the instruction given, the students paid

9 in k in d in the shape o f grains and o th e r household goods. It w a s u n d e r the care o f the M aulvi t h a t the young G ujarm al, t h o u g h th e son o f an affluent fam ily , started learning the M a h a ja n i style o f writing. A fte r com pleting one year o f p re -s c h o o l education, the child, at th e age o f five, was adm itted t o a local school. T h e gran d -father o f the child was a staunch believer in disci­ p lin e . H e w anted the child to be a d m itte d to a Sainik School t o b eco m e a soldier. B ut this was n o t to be. The grand-father d i e d in 1913 when the boy was stu d y in g in class VI. D estiny h a d o rd ain ed for him a n alto g eth er diiferent path—the path o f in d u stry . A nd rightly so, because, as later events proved, in th e field o f industry M r. G u ja rm a l M odi acquitted him self e x tre m e ly well by creating the in fra stru c tu re for new and diverse in d u s trie s in those areas which h a d hitherto been thoroughly b a c k w a rd and undeveloped. P erso n s who h ad the occasion to w atch the young G ujarm al g r o w u p confide th at right fro m h is early days he had started s h o w in g unm istakable signs o f a p ro m isin g career. While his o t h e r friends at school appeared to b e book-w orm s, the young G u ja r m a l could be seen engaged in n ew a n d uncom m on pursuits. O n e p erso n who had w atched him d u rin g his school days from c lo s e q u arte rs states th a t up to his eig h th standard, the young G u ja r m a l used to get two paise (th re e paise in the new decimal c u rre n c y ) as pocket m oney each d a y . Those were the days w h e n the first W orld W ar h ad ju s t started and inflation and r i s i n g prices were yet far away. E v ery th in g was less expensive a n d even a little m oney could buy a lot. A nd so, out o f the p o c k e t m oney, the boy would m eet h is daily expenses on snacks a n d yet save som ething for helping th e p o o r and needy students, s o m e th in g unim aginable in these d ay s o f spiralling prices. T h e m ovem ent started by Sw am i D ay an an d and other con­ te m p o r a r y reform ers against child m arria g es and other custom s h a d m ade a deep im pact on society.

T he custom o f early m ar­

10 riages had not, h o w e v er, disappeared altogether. The M odi family, essentially, w a s orthodox. So the m arriage of the youngG ujarm al was solem nised a t the early age o f 13 in 1915. A t the time o f his m a rria g e w ith R ajb an Devi, daughter o f M r. Goverdhan D as o f village S inghana in R ajasthan. He was still studying at the M o d e l School, P atiala. Gauna, the post-m arriage ceremony w h e n the bride com es to live with her husband, took place two y e a r s later. M arriage did n o t have any adverse effect on the education o f the young M o d i. W hat did, how ever, disturb his studies was an otherwise m in o r incident a t school which eventually disrupted his school ed u catio n . T he incident relates to the year 1920 when he was stu d y in g in the tenth standard. It was a cloudy day and th e r e was cool breeze blow ing all around. The weather outside w a s extremely pleasant and inviting and the M athem atics te a c h e r, Mr. C hopra, suggested that the students might go on an ex c u rsio n on th a t fine day. The suggestion w a s m et with spontaneous response and the overjoyed students sta rte d p reparing for an outing. But the principal, who was n o t o n good term s with the M athem atics teacher, came in t h e way. T aking advantage o f the situation, he levelled the a lle g a tio n th a t the teacher was inciting the students to go on strike a n d had, thus, violated the discipline of the school. He also a s k e d the students to apologise. The students led by G ujarm al, o p p o se d this suggestion. They argued that as students they were n o t to blam e a n d should, therefore, not be asked to apologise. T h e principal, how ever, was in no m ood to listen. Ultim ately, th e echoes o f the incident reached the M aharaja. There, t o o the young G ujarm al turned Student leader, argued the c a s e o f th e students fearlessly and sought justice at the han d s o f the M ah araja. While G ujarm al w as th u s engaged in pursuing the case o f the students, the last d a te fo r sending theexam inationfees expired. This m eant the loss o f a full year fo r the young Modi.

By this

II tim e th e business o f Mr. M ultanim al M odi h ad grow n m ani­ fold a n d he felt the need o f som eone who could help him in ru n ­ ning th e family business. The father considered this a G odsent o p p ortunity and asked his son G ujarm al to sta rt attending to th e family business. T h e young Modi w anted to pursue his studies, b u t in the face o f th e firm opinion expressed by his father, who believed th a t p ractical experience in life could im p art better education th an th e ro u tin e school education, the son yielded. A t the same time, being aw are o f the son’s appetite for learning, the father m ade arrangem ents for private coaching a t hom e. T h e boy started pursuing privately courses in business m a ­ nagem ent, accountancy and o th er allied subjects. By 1919 h e h ad started working as M unim (A ccountant) and cashier at th e fam ily shop. A genius learns in m ysterious and strange w ays; it ru n s while the ordinary person crawls. T he gifted G ujarm al ab so rb ed knowledge o f business organisation rapidly. H e acq u ired knowledge o f practical aspects o f business m anagem ent a n d th e intricacies o f the trad e. H e w orked very hard, spent lo n g hours o f his leisure in,reading books o n com m erce, arch itec­ tu re, engineering and m arketing. W hat he missed by n o t going in fo r form al college education, he m ore th an m ade u p by th e p ractical training and the dedicated application he brought to b e a r o n his chosen subjects. T he fath er encouraged him in his studies and provided him w ith opportunities to gain practical experience.

Chapter Two


Those were the days o f W orld W ar I w hen businessmen were experiencing difficulties i n securing railway wagons for the m ove­ ment o f flour to th e m a rk e ts o f L ahore an d Amritsar. In the absence o f wagons g o o d s had to be tran sp o rted by bullock carts. This m eant higher tra n s p o rta tio n costs and also stiff com peti­ tion from the local m ills w hich were able to m ove their products to the nearby m arkets q u ick ly and a t sm aller costs. There were also rum ours th at one m ill ow ner o f A m bala had close connec­ tions with the G o v e rn o r o f P unjab, and, therefore, his mill had been able to secure w a g o n allotm ents m ore easily. The young G ujarm al decided to fin d out the tru th behind these rum ours. He went to Lahore a lo n g with the trusted M unim , Gopal Sahai, and found th at the r u m o u r was baseless. A few certificates from the railway auth orities w a s all th a t w as needed to ensure sm ooth allotm ent o f wagons. T h is he was able to do. Armed with the certificates, he h urried b a c k to his father w ho was happy to see how cleverly his son h a d m anaged a difficult task. The new step was destined to in cre ase and expand the demand for the products o f their m ill. T h e fa th e r was so h appy at the achieve­ m ent o f his son th a t h e w illingly gave him perm ission to take fur­ ther initiative in business m atters. H e also decided to allow his son to equip him self w ith m odern m ethods o f book-keeping. A rrangem ents fo r th is w e re m ad e at the local branch o f the Punjab N ational B ank a t P atiala. There is an o th er in te re stin g incident which illustrates the enor­

13 mous am o u n t o f courage and conviction which G ujarm al had developed v ery early in his life. The M odis were running a wholesale business at Patiala. One day a M arw ari businessman came to the sh o p in an im posing dress and suggested that if the M odis could send their m erchandise to C alcutta for sale through him, they c o u ld earn a lot o f profit. The father thought that the person w as an established businessm an and commission agent. So h e agreed to send the consignm ents direct to his C alcutta ad d ress and forw arded the hundi (a type o f demand note) th ro u g h th e bank. But when the hundi was not honoured by the C a lc u tta dealer within the specified time, the father got suspicious. T h e question now was how to pursue the dealer and recover th e am ount. G ujarm al, then in his twentieth year, offered to go to C alcutta. He was so confident o f handling the job. He p ro m ised th at in case he was no t able to recover the am ount, he w ould bear the entire expense o f the journey ou t of his pocket m oney which, then, was barely Rs. 10/-per m onth. In the face o f the firm determ ination and confidence shown by the son, th e father perm itted him to go to Calcutta. A t first, th e railway authorities in C alcutta appeared to be reluctant to h e lp G ujarm al trace the w hereabouts o f the dealer b u t when th e youngm an threatened legal action, the authorities yielded. T h e dealer was called and G ujarm al was able to reco足 ver the m oney. W hile in C alcutta, the young businessman m ade a thorough study o f th e m ark e t conditions in the city. It was there that he first learnt a b o u t the principles o f general insurance business. He saw th e signboard o f an insurance com pany outside one godown. W ith an enquiring m ind he went inside to find out w hat the w o rd insurance m eant. Once inside, he was fully convinced a b o u t the soundness o f the principle o f general insu足 rance. On h is return hom e he tried to explain to his father the need to h av e the family business insured against the risk o f fire and o ther accidents. To this the father agreed. Very soon

14 thereafter, th e fa m ily was a b l e t o reap the fruit o f the wise step taken by th em w h en a fte r a f i i 'e a c c id e n t at their flour mill they got full c o m p e n s a tio n f r o m t h e in su ra n c e company. This also earned G u ja rm a l M o d i t h e a s s i s t a n t m anagership o f the flour mill. This w as one o f the e a r l y o p p o rtu n itie s for him to show his mettle. He a d m in is te re d t h e a f f a i r s of the mill well and was able to expand its b u sin ess. There is one m o r e i n c i d e n t w hich illustrates his business acum en, a n d also, i n c i d e n t a l l y , th e m agnanim ous nature of the M odi fam ily. I n t h o s e d a y s India used to im port foodgrains and w heat f r o m A u s t r a l i a and some other countries. The cost o f w h eat o n a r r i v a l a t t h e mill was 4.5 seers (about 4.2 kg) per ru p ee. W h ile w h e a t f l o u r from the mill was being supplied to th e arm y a t the r a t e o f 4 seers (approx. 3.5 kg) per rupee, its re ta il price f o r t h e p o o r h a d been kept deliberately at 5 seers per rupee. A t a t i m e o n e custom er was allowed to purchase o n ly one r u p e e w o r t h o f flour from the retail shop. T h e m ilitary officers w e re a n n o y e d a t this apparent disparity in the retail a n d w h o le sa le p r i c e s o f flour. Mr. M odi was sum ­ m oned to ex plain the p o s i t i o n a n d h e stated that the retail price had been k e p t d e lib e ra te ly l o w in order to help the p o o r and the under-privileged. T h e m i l i t a r y authorities were no t con­ vinced by th e a r g u m e n t a n d m a i n t a i n e d th a t any talk o f p hilan­ thropy in th is m atter w a s a h o a x a n d that the mill was actually indulging in p ro fite e rin g by s e l l i n g w heat flour to the arm y at higher rates. It a p p e a r s t h a t t h e r e was a heated exchange in which the a rm y officer h u rt t h e re lig io u s feelings o f the M odi family. This was i n t o le r a b l e t o t h e proud young man and he rem inded the colonel t h a t it w a s n o t proper for him to use in­ sulting words fo r the M o d i f a m i l y . T he officer became furious and th reaten ed to c o u r t - m a r t i a l h i m . But M r. M odi stood his ground. T h e o ffic e r c o m p l a i n e d to M r. M odi’s father. The father w as fully c o n v i n c e d a b o u t the reasonableness o f his son’s stand a n d w ould not a c c e p t t h e allegation against him.


M r . M o d i w as, how ever, asked to explain the in cid en t and he r e i t e r a t e d h i s firm stand th at he would prefer to quit the prin­ c e l y s ta te r a t h e r th a n tolerate insults. It w as w ith great dfficulty t h a t h e w a s prevailed upon to stay on in P atiala. I n th e y e a r 1922 M r. M odi u n d erto o k a to u r o f im portant t r a d i n g a n d business centres th ro u g h o u t the co u n try . W ith h i s h a r d w o r k a n d sincere efforts he was able to win over nu­ m e r o u s c u s to m e r s fo r the products o f his fa cto ry . W hoever c a m e i n t o c o n ta c t with him becam e his custom er. Then, M r . M o d i t o o k u p o n him self the responsibility o f reconstructing a n d re -e s ta b lis h in g the mill after the serious fire accident which h a d ta k e n p la c e earlier. The fire did n o t d am p en his spirits a n d h e w a s o n the look out fo r a capable engineer to take up t h e s u p e r v is io n o f the construction w ork o f th e mill. He ap­ p r o a c h e d M r . B hanu K um ar M athur, a retired engineer who was t h e n liv in g in D elhi. M r. M athur h ad already served the mill a s a n e x e c u tiv e fo r ab o u t 15 or 16 years a n d h ad retired in 1916 a f t e r g e t t i n g his son appointed in his place. M r. M ultanim al w a n t e d t h e fa cto ry to be constructed u n d er th e able guidance o f t h e e n g in e e r. However, the latter did n o t w a n t to come o v e r to P a t i a l a because there were feelings o f extrem e bitterness b e t w e e n h i m a n d his son. A fter persuasion, he ag reed to come t o P a t i a l a o n co n d itio n th at M r. G u jarm al M odi w ould ensure h i s s a f e ty . M r. M odi agreed to this readily. S h a rp at six in t h e m o r n i n g h e w ould escort him to the factory site and move w i t h h im l ik e a shadow till bedtim e. H e also to o k every pre­ c a u t i o n t o en su re th a t there were no chances o f the engineer b e i n g p o is o n e d . Close proxim ity gave M r. M o d i an o p p o rtu ­ n i t y t o l e a r n fro m the engineer the field an d desk w ork required f o r c o n s t r u c ti n g a mill. T h e m o t t o w hich continued to inspire G u jarm a l throughout h i s c a r e e r w a s th a t the will power to face o d d s gives rise to c o u r a g e i n m an . R ight from his early days, h e h ad been an e a r l y ris e r. H e w ould wake up a t 5 a.m . a n d afte r getting ready,

16 by 6 a.m . he could b e seen grappling with his business affairs. The energetic M odi w o u ld ride on horseback daily fro m N ab h a to P atiala to su p e rv ise the w ork. He had not only to look after a team o f 500 w o rk e rs engaged in the mill b u t also th e construction w ork o f the building. Cement had to be p ro ­ cured; lime too, w as n e e d e d and so were bricks, m o rta r, steel and conduit pipes, a n d m ost im portant was the m anagerial skill needed to h a n d le all these w ithout loss o f time. Personal su p e rv isio n m eant that for hours to g eth er he had to keep standing in th e scorching sun. All this kept him busy for 16 to 17 hours a d a y . But hard work never dam pened his spirits. The challenge o f ever increasing business activity gave him encouragem ent. E ven after the day’s chores he m anaged to find time to type o u t replies to a large num ber o f letters. The new factory w a s constructed on scientific and m odern lines. It took only n in e m onths to be built. His fa th e r, by now, was fully c o n v in c e d th a t the young M odi had fully deve­ loped the sense o f d e v o tio n to duty. H e had, by then, acq u ired m ore experience o f ru n n in g an industrial establishm ent, o f building co n stru ctio n , business accounts and engineering than could be e x p e c te d o f a young man barely tw enty-tw o years old. It was re a so n a b le and natural, therefore, th at he should be asked to sh o u ld e r the responsibility o f ru n n in g the affairs o f the new m ill. In 1924 the new fa c to ry a t P atiala started functio n in g under the guidance o f the y o u n g M odi. The traditional fam ily quali­ ties o f foresight and p ru d e n c e helped him to m ake his w ay into the business world. H is outlook on business was progressive and socialistic. H e s h o w e d a deep insight into o f business affairs and had a firm grip o v e r the w ork entrusted to him. H e was always willing to set a n exam ple o f hard w ork before h is w or­ kers. A ny co m p ro m ise with the ideal of sincere hard w o rk on the p art o f an em p lo y ee was n o t acceptable to him . H e was a strict disciplinarian.

17 A small incident illustrates well his keen desire to adhere to the principle o f disciplined and diligent work. A m ong the persons em ployed to keep a watch on the large num ber o f weighmen (Palledars) em ployed in the factory was one B arum al. He was a clever m an. W henever the father was present in the factory, he w ould p u t up a show o f real hard w ork. B ut the m om ent the fa th e r was away, he would slip into his norm al habit o f lethargy. B ut Barum al could not escape the observing eyes o f G ujarm al. The result was th at one day he was rem oved from service fo r dereliction o f duty and for indiscipline. The dism issed em ployee approached the father for mercy. The father was generous and forgiving. So the young M odi had to bow before th e orders o f his father. B ut while reemploying him M r. M odi warned him to be careful in future. This B arum al could not do. So after one m onth he was once again given th e sack and the large-hearted father had to intervene once again. However, this time the young M odi was unbending and instead o f saying anything, he sent in his own resignation to the father. This was surprising and u n 足 expected but, perhaps, a better way o f expressing his strong indignation over the episode. However, the benevolent father would not be outw itted. Having been a m agistrate he knew th a t an erring m an could always be won over through fo r足 giveness. H e called fo r the young M odi and m ade him see reason. While w orking as M agistrate, the father had let off m any an offender with a simple warning. N o police officer had ever shown indignation o r disgust over his orders. W hy, then, should the young M odi feel offended? A nd then the father had never m eant th at the erring employee should n o t be punished in future. H e felt that on being forgiven again, the employee m ight see reason and m ight mend his ways. Once the erring em ployee was m ade to feel sorry for his m istake, it m ight become a turning point in his life. The young M odi appreciated the wisdom o f the arguments put forw ard by his

18 father. F o r he knew th a t hearts could be won over by sym­ pathy and also th a t renouncing anger was no t only good but also necessary. This incident helped to soften the young m an's heart. Now he started showing a better un d erstan d in g o f his w orkers’ prob­ lems. Fury and anger quickly gave way to am iability. F o r­ giving and forgetting now becam e the rule. This welcome change naturally pleased the father. W henever he was out of town, he would issue orders th a t all the appeals m ade to him against the decisions o f the son w ould be heard by the son him ­ self in his absence. H earing appeals against his own decisions led to a complex psychological process. It was difficult to accept, at first, and m ore difficult to im plem ent. But the son agreed to undergo the experience an d once the new process was underway, it had a w onderful softening effect on him. These appeal sessions had a real, solid effect in shaping and m oulding the thought processes o f the m an who was destined to hold an em inent place am ong the to p m en o f the industrial world. This went a long way tow ards raising the statu re o f the man as a popular, justice-loving industrial leader and m anager. Very early in his life, M r. M odi had realised the inherent defects in the indigenous trad in g practices one o f which was to quote different sets o f rates to different parties. The prevailing system, to an extent, m eant concealing the tru th . He preferred the m odern system of fixing a specific price for a particular day and then sticking to it fo r all the deals m ade during that particular day. F o r the young M odi, this m eant breaking the vicious circle o f quoting different price levels to different parties. However, any change to the new system was not liked by his inunims who saw m ore advantages and m ore profits in the old system. But M r. M odi was firm and he was able to have his way. Success in later years proved his point, fo r there came a time when 90% o f the indenting parties started placing their orders with the M odis w ithout asking for quotations. Other


businessmen o f the M o d i’s stature continued to practise the old system o f q u o ting different prices. They would fix the price of a certain com m odity, b u t when the prices soared, they would change the term s and charge higher rates. G ujarm al co n tin u ed to develop and expand his business activities. In 1928, he p u rchased an old cotton mill, added to it a new oil expelling u n it and started the new venture un d er the name, M /s. M odi Oil G inning Mills. In 1929 he planned to start a Vanaspati (hydrogenated oil) factory at P atiala, but official perm ission fo r th is was n o t given and he had, therefore, to abandon his plans. In 1930 he was asked to set up a new cot­ ton factory at N a b h a fo r his uncle M r. G irdhari Lai M odi. This was a clear recognition o f his organising capabilities. Tow ards the end o f th e year 1930, the father o f M r. G ujarm al M odi resigned fro m th e post o f M unicipal C om m issioner and the son was n o m in ated in his place. This provided to the son yel an o th er o p p o rtu n ity to serve the com m on man. The D eputy C om m issioner in those days also used to hold the post o f the ex-officio chairm an o f the M unicipal Com m ittee. One day a t one o f th e m eetings o f the M unicipal C om m ittee Mr. M odi p u t a q u estio n to the President which he latter re­ fused to answer. M r. M o d i insisted and when he saw th a t no answer was fo rth co m in g , he prom ptly brought forw ard a noconfidence m o tion ag ain st the chairm an. This was a bold and courageous step a s the m em bers o f the M unicipal C om ­ mittee in those days w ere governm ent functionaries. In this particular case the ch airm an o f the M unicipal C om m ittee also happened to be the brother-in-law o f the M aharaja and also the D istrict M ag istrate o f the town. A t th at time, the D istrict M agistrate also used to be the Incom e-tax Officer o f the area and was, thus, in a p o sitio n to exert his influence over the busi­ ness com m unity o f the area. B ut in spite o f the risks involved in this step o f which h e was fully aw are, M r. M odi rem ained firm on his d arin g stan d . The m em bers o f the M unicipal

20 C om m ittee were im pressed by the fearlessness and the sense o f ju stic e o f M r. M odi. H ectic consultations am ong the m em bers to o k place and ultim ately when the vote was taken, the noconfidence m o tio n was carried and the chairm an had to bow o u t o f office. It is rem arkable th at even the Police C hief o f the area voted in favour o f the m otion. T his was an unprecedented incident in th e history o f the M unicipal C om m ittee and it gave a trem endous fillip to the rising p o p u larity o f the young industrialist. H e became, in the eyes o f th e co m m o n m an, the cham pion o f right causes. People now started show ing courage in fighting for their rights and m any used to co m e to him to seek advice in cases o f injustice an d excesses a g a in st them . The prevailing conditions and his ow n n a tu re com bined to push M r. M odi into the field o f public w elfare activities. T he sam e y e a r M r. M odi founded the C ham ber o f C om 足 m erce a n d In d u s try at P atiala. The spade w ork for organising the business and trad e o f the area under the banner o f the C h am b er o f C om m erce and Industry was done by him alm ost single-handed. I t was inaugurated by Sir F redrick G auntlet w ho, a t th a t tim e, was the Finance M inister o f the State, and h ad earlier held th e position o f the A uditor G eneral in the G o v ern m en t o f In d ia. Sir F redrick was considered an authority on econom ic issues. T he speech which M r. M odi delivered on this im p o rta n t occasion clearly indicated the high esteem in which M r. M odi was held in Patiala because o f his fearless ch aracter. W hile engaged in his business pursuits M r. M odi never allow ed any com prom ise w ith his sense o f self-respect and n atio n al h o n o ur. I n his early days in the princely states he saw th a t ab ject su rre n d e r and slavery to the B ritish resident officers was th e established p attern o f behaviour, and the ruling princes were deeply im m ersed in the pursuit o f sensual pleasures and in pleasin g their B ritish m asters.

They developed a sense o f

21 hatred and co n tem pt for their subjects. D uring his frequent visits to these rulers’ palaces in the com pany o f his father, G ujarm al M o d i cam e to have fairly good idea o f the kind of life these princely rulers were leading. H is h ea rt pained to see the steep fall in m oral values in their lives. H e felt indig­ n a n t but th ere was no way to express it. A t last an opportunity to give vent to his feelings cam e in 1926. M r. T u rn er, an Englishman, was w orking as the super­ intending engineer in the garage o f the then M ah a raja B hupendra Singh o f Patiala. His attitude tow ards Indian officers was insulting a n d hum iliating. In the year 1926 there was a public auction at w hich M r. M odi outbidded M r. T urner. This h u rt the E nglishm an’s pride and in a fit o f anger he started h u r­ ling abuses a t M r. M odi. “ Y ou, dirty In d ia n ” , was one o f the phrases which hu rt Mr. M odi deeply. I t was im possible fo r this self-respecting person to bear this insult to his person and his nation. He, at once, pounced u p o n the autom obile engineer, slapped him on his face and pushed him to the ground. M r. T u rn er used still m ore filthy language an d this enraged M r. M odi all the m ore. The result was th at M r. M odi b eat the autom obile engineer so badly th at the latter becam e u n co n ­ scious. A t once M r. M odi became the p o p u lar hero an d the exem plary courage shown by him was praised by all the Indians p resent a t the auction. M r. M odi was happy, for he knew th a t he h ad done the right thing. B u t since an Englishman was involved, it was consi­ dered necessary to apprise the Dew an o f the S tate ab o u t the whole affair. T he Dewan, R aja D aya K rishan K aul, ap p re­ ciated th e sense o f courage shown by the young m an, b u t he h ad a genuine fear th a t the M aharaja, who was know n to be a blind follow er o f the British, would no t do justice if the case was b ro u g h t to his notice by the autom obile engineer. M r. K aul, therefore, advised Mr. M odi to move ou t o f the S tate fo r som e tim e so th a t things m ight cool down. H e agreed and

22 left for H apur in the State o f U nited Provinces (now known as U ttar Pradesh). Mr. Salig R am and M r. T a ra C hand, his two elder cousins, were ru n n in g a successful business there. F rom here he had to keep m oving to different places for some time. The atm osphere in British India was quite different from the one prevailing in the princely states, and his b rief stay at H apur naturally afforded him an opportunity to study public life from close quarters. He was able to see how the B ritish rulers gene­ rated communal disharm ony by follow ing the policy o f divide and rule, in order to exploit the Indian people. He was also able to see how the evil o f speculative trad in g was ruining the business com m unity. He him self had been attracted to this type o f trading under the influence o f his m atern al uncle, M r. M usaddi Lai. However, the failure o f a w ell-established firm, M /s. T ota M ai Jagga Mai m ade him realise the disastrous effect o f speculative trading. He even advised his elder cousins a t H apur to run their business on the industrial trad in g pattern which he him self dem onstrated to them . Meanwhile, after a week’s stay at H apur, M r. M odi was called back to Patiala and was produced before the M aharaja. He was asked to explain his conduct a t the auction. The ques­ tion was “ Why did he beat Mr. T u rn er when he knew th a t the latter was an Englishman an d was to be respected as a sup­ erior.” Quick came the reply “ In th a t case I have certainly made a mistake, for I had all along tho u g h t th a t in the State of Patiala, there was none superior to the M aharaja, therefore, when an ordinary servant o f the M ah a raja abused the M aharja. how could I tolerate it? ” “ W hat did T urner say?” asked the M aharaja. He said, “ You dirty Indian. . . . Sir, are you not an In d ian ?” The M aharaja listened carefully. He knew th a t perhaps the angry young m an was right, but he w anted to take a different stan d . He called M r. M ultanim al M odi an d told him th at

23 he feared his young, irate son m ight t u r n out to be a revolu­ tionary. There is still an o th er incident w h ich illustrates how young Modi had developed a dauntless c h a ra c te r and a strong love for discipline and self-respect. In 1930 the M aharaja o f Patiala won a suit against the Princely R u le r o f the neighbour­ ing State o f N abha. It was an occasion fo r rejoicing. A public reception w a3 arranged to h o n o u r and rew ard those who had helped in winning the suit against the S ta te o f N abha. Prom i­ nent men from all walks o f life were in v ite d to a public durbar in front o f the fort and separate en c lo su res were set apart for each category o f invitees. An official o f the reception com ­ mittee, who was deputed to look after t h e seating arrangem ents, objected to one invitee, a prom inent c itiz e n , taking his seat on the Chandni (a while sheet)— m eant f o r the gazetted officers. Mr. Modi took this as an insult to all t h e invitees. He protested and talked to all the invitees present th e re . This had an elec­ trifying effect. All the invitees in c lu d in g the Com missioner were convinced o f the reasonableness o f his argum ent. There was a mild flutter in the durbar an d the au th o rities had to inter­ vene to bring the situation under c o n tro l. On an o th er occasion, at a party hosted by the M aharaja, t h e invitees were asked to drink and dance in the W estern style, b u t M r. M odi refused to do so, m uch to the chagrin o f the M a h a ra ja . In this respect, he was a traditionalist. By his very nature M r. M odi n e v e r would compromise on matters o f principles dear to him . H e always had an urge to give a new and dynam ic direction t o his business activities. The new accounting system in tro d u ce d by him for m aintaining the accounts of his business had been w o rk in g very satisfactorily and his father, who was n o t c o n v e rsa n t with the new system was satisfied th at the new system h a d neither resulted in any com plaint o f irregularities n o r had i t show n any pitfalls. The cram ping atm osphere in th e princely states, and the

24 rulers’ unfavourable attitude tow ards the setting up o f new industrial ventures in the states sapped the enthusiasm a n d initiative o f the business com m unity. This was felt keenly by the im patient G ujarm al who began to think in term s o f expanding his business activities outside Patiala. The problem , however, was how to obtain perm ission from his father who did n o t w ant his son to be away from Patiala. Patient efforts b ro ­ ught dividends at persistence an d the father gave his consent on condition th at wherever M r. M odi m ight set up his new indus­ trial ventures, he w ould n o t leave the perm anent residence at Patiala. This the devoted son agreed to abide by. So in 1931 when M r. M odi h a d a chance to purchase a flour mill in Bom bay, he decided to shift it to a new site in Ludhiana, the industrial hub o f m odern Punjab. Selections for the posts o f engineers and other officers were m ade a n d o th er arrangem ents to o were in advanced stages o f finalisation when suddenly M r. G opal Sahai, the old trusted munim o f the family, brought the news th at the father o f M r. M odi was not too happy with this idea. The news was distressing, because by then most o f the plans for establishing and running the new mills at Ludhiana had been finalised. M r. M odi th o u g h t o f a way out. He approached his father and assured him th a t he w ould come back to P atiala im m e­ diately after setting up the new mill. But the father was u n ­ convinced o f the wisdom o f all this. W ho would look after the family business at P atiala, was the question which nagged him. Finally, the son h ad to give in to the wish o f his father an d it was decided th at a new cloth m ill a t Patiala would be set up instead o f the proposed venture at Ludhiana. Official p er­ mission for the new mill was obtained. A rrangem ents for the selection and developm ent o f the site too were also made. Plans fo r the construction work were finalised and selection o f p er­ sonnel progressed well. A capital o f Rs. 1.5 million was a r ­ ranged for the new venture. B ut ju st when these plans had

Rai Bahadur G. M . Modi with Shri N . Sanjiva Reddi and Shri H . N . Bahuguna on the occasion o f Founder’s D ay Celebrations at Modinagar.

25 reached an advanced stage, there came a nasty shock. The civil adm inistration o f the princely state had cancelled its earlier permission for the mill w ithout assigning any reason whatsoever. This was enough to dam pen the zeal o f any new industrialist. But there was no way out except to bow before the will o f the M aharaja. The background for cancelling the perm it o f the mill was provided by the conditions o f political unrest and uncertainty prevailing in B ritish India. There were a spate o f strikes and an eruption o f general unrest throughout the country in the wake o f the non-cooperation movement started under the leader­ ship o f M ah atm a G andhi. To the M aharaja the opening o f a new mill at P atiala m eant trouble from organised labour. A p ­ prehensions in this regard prom pted the M aharaja to cancel the perm it fo r the mill. M r. M odi was greatly perturbed over the arb itrary and autocratic attitu d e adopted by the civil adm inistration under the M aharaja. It brought home the painful realisation th a t life in the princely states m eant complete subjugation and hum i­ liation. The sudden cancellation o f the licence for the new mill plus the refusal to give licence for the vanaspati u n it only ac­ centuated this realisation. The pleasure-seeking luxurious life o f the princely rulers was responsible for the industrial back­ wardness o f the princely states. In the Punjab, the conditions were m ore deplorable. All this aroused in M r. M odi a keen desire to shift his business interests outside P atiala. T he p ro verbial last straw on the camel’s back in this regard was provided by an incident in which M r. Sukhdev Sahai, an affluent in d u strialist from K anaur (the birth place o f M r. M odi) was hum iliated by the State o f H yderabad. M r. Sahai h ad n o t only been decorated with the title o f “ R aja B ah ad u r” in the year 1931, b u t h ad also lent to the royal heir a huge am o u n t o f money in the fo rm o f interest-bearing loan. W hen M r. Sahai wanted his m oney back, all that he got was a rebuke and a flat

26 refusal to pay. To this were added insults to his person. The aggrieved Mr. Sahai had to run for his life and seek the p ro ­ tection and intervention o f Lord Irwin, the then Viceroy of British India and the Political A gent o f the C row n, who was stationed at Secunderabad. As a direct consequence o f this episode, he was forced to sell all his assets including his landed property worth thousand o f rupees at throw -aw ay prices to flee the State in the shortest time. This episode m ade Mr. M odi take the firm decision to shift his business interests outside the princely State to the terri­ tories ruled by the British, where the capital could be better protected and where there would alm ost be no chance of facing hum iliation and insult at the hands o f the adm inistrators. H ow ­ ever, the problem o f convincing the father who was conservative in his ideas about moving out o f the State rem ained. This problem continued to worry the young M odi who was keen to expand his industries and at the sam e tim e not to displease his father. The personal life o f Mr. G ujarm al M odi was also n o t free from troubles. He had to face m any m isfortunes but these did not shake his self-confidence. Between his first m arriage in 1914 and the year 1931, he lost ten children. In 1931 there was yet another m isfortune in the family when his only surviving dau­ ghter from the first wife died. His first wife had been suffering from w hat is known in medical parlance as a fibroid uterus and was therefore unable to bear healthy children. This caused great disappointm ent to the young M odi who was a staunch believer in the H indu way o f life in w hich the birth o f a son is considered essential for ensuring salvation after death. The absence o f a male issue in the fam ily m ade him pon­ der over the futility o f this world. M r. M odi started brooding. F o r hours together he would sit a n d m editate. W hat was the use o f all the wealth and honour when there was no one to share them with, he wondered. H e left for H ardw ar, the

27 sacred tow n on the b a n k s o f the river G anga and stayed in the jungles o f R ishikesh for m any days in search o f peace of mind. His father hinted th a t the family m ight adopt his younger brother, M r. H a rm u k h Rai, as a son. This was resisted by G ujarm al. The b o ld reaction shown by him to this suggestion speaks volum es o f th e m ental m ake-up o f the man. “ If the void created by the absence o f a male issue in the family can be filled in this way” , he said , “ I can regard the sons and daughters o f the whole m ankind a s my ow n” . A doption o f a male issue, thus, became out o f the question. Then Mr. M odi’s father-in-law hinted th at he would be willing to give the h a n d o f his younger daughter in m arriage to Mr. M odi, b u t he declined the offer. M eanwhile his worries continued t o grow and this had an adverse effect on his physical health, a n d a tim e came when he had to agree to a proposal m ade by h is father for a second m arriage. T hus on 19th June, 1932 M r. M odi was married to D ayaw ati, daughter o f Mr. C hheda Lai o f K asganj, in District E tah o f U ttar Pradesh. As was expected, the second marriage brought him a new lease o f life. The m ood o f gloom and m elancholia gave way to a fresh zeal a n d desire to live and work. The young man started taking full in te re st in his business activities. Sir Fredrick G auntlet, the old tr u s te d friend o f the family, had all along been advising him to u n d e rta k e new industrial ventures. By now, he had several p la n s u p his sleeves, but obtaining the consent o f his father still p o sed a problem. There was, h o w e v er, one ray o f hope.

Over the p ast few

years M r. Janki D a s , the trusted M unim, who was o f the same age as M r. M odi, had become quite fam iliar with the new accounting system . T his provided a welcome relief to Mr. M odi. If he had to be a w a y from Patiala for some time, he was now confident that a c c o u n tin g would go on w ithout difficulty. By now, the father, to o , had come round to the view th at the son

28 should go ahead w ith his plans to expand his industries. But the wise father also k n e w th a t in youth one is prone to indulge in day-dreams. H e d i d not w ant the fam ily m oney to be frit­ tered away in experim ents. Yet, he w ould have liked his son to depend upon h im se lf for finances to ru n the new industrial ventures, as he him self h a d done. W hen the young M odi came to know this, he w as overjoyed. H e felt th at the n e w ventures m ight keep him unusually busy for some time. S o he sent back his bride, D ayaw ati to her father’s home a n d left fo r Delhi with a m eagre am ount o f Rs. 400/- in his p o ck e t. This was the beginning o f the indus­ trial career o f this e n te rp risin g youngm an w ho was destined to carve out a place fo r h im s e lf in the world o f industry.

C hapter Three


It was a clear Septem ber day in 1932 when M r. M o d i started on his journey from P atiala. H e was determ in ed to launch new ventures in the field o f industry. H e was not s u re o f what he was going to do, but he was confident th a t w h a te v e r he would do would be great. He decided to go to Delhi, w h ic h being the capital o f India prom ised good prospects f o r a young industrialist. On reaching Delhi, M r. M odi stayed in a h o te l and paid Rs. 150/- as advance rent for one m onth. Im m ed iately there足 after he started scanning the city and its n eig h b o u rh o o d in search o f a suitable place for a new industry. H ow ever, even after a week o f running a b o u t he rem ained undecided. Suddenly one evening as he was taking stock o f the efforts m a d e by him so far, he realised th a t though D elhi was th e m etropolis o f India, Calcutta as the industrial city estab lish ed by the British, still retained its glory as the seat o f in d u s tria l power. To him Calcutta offered better possibilities fo r estab lish in g a new industry. He, therefore, decided to try this lu c k there. While at Patiala, M r. M odi had been keeping i n to u ch with M r. N arayan Das B ajoria, one o f his trusted frie n d s, who had established his business at C alcutta. A regular exchange of ideas had been taking place between the two. N o w a t C alcutta after hurried consultations it was decided th a t in view o f the ever-increasing dem and for vanaspati (h y d ro g en ated vegetable oil) it would be better and, perhaps, wiser to go in f o r a vanaspati

30 m anufacturing unit. Until the year 1932, vanaspati as a substitute f o r p u re desi ghee was being im ported into Indiaby British firms fro m H olland. Mr. Bajoria intended to start a vanaspati unit in the country but he was not able to arrange the finances re q u ire d fo r this. Mr. M odi had ea rlier toyed with the idea o f sta rtin g a vanaspati industry in Patiala, b u t could not implement his p la n e ow ing to opposition by the S ta te adm inistration. Having set his m ind on the vanaspati in d u stry , M r. M odi started to mobilise financial resources for the v en tu re. In the m eantim e the G overnm ent, all o f a sudden, a n n o u n c e d an in足 crease in duty on sugar im ported into India. T h e step was m eant to curtail im p o rt o f sugar and encourage its indigenous production. There was, therefore, im mediately a sp u rt in interest am ong the business com m unity for estab lish in g sugar mills. This inspired M r. M odi to begin his n ew industrial career with a sugar m anufacturing unit and he d ec id e d to move out o f C alcutta in search o f a suitable location for a sugar mill. A t H apur, in U .P . he met his cousins, M r. S alig ram and Mr. T ara Chand, an d his m aternal uncle M r. M u sa d d i Lai who were in the speculation business. Mr. M odi called a m eeting o f prom inent businessm en there and persuaded th e m to accept his plan. His cousins agreed to help him. The problem o f m obilising capital was, thus, p a rtia lly solved, but the selection o f a suitable site continued to p re s e n t obstacles. F o r sugar industry several preconditions are o f p rim e im p o r足 tance. The land a ro u n d the area should be su ita b le fo r the cultivation o f sugarcane. It should also have a railw ay station nearby for ensuring q u ick and prom pt transport o f sugar and sugarcane besides the facility o f postal links for p u rp o se s o f com 足 m unication. Plenty o f soft w ater and proper facilities for drainage are also needed. Lastly, the available land should be sufficient to allow fu tu re expansion o f the industry. M r. M odi collected a small folding chair, a co tto n m at and a

few things to eat and started his survey journey by a c a r loaned to him by his relations at H ap u r. H e visited several places in and around H apur, and while on his way from D elhi to M eerut he passed through B egum abad, a little known place till then. He stopped his car at a lonely spot, a stretch o f w ilderness in the surrounding irrigated area. This was a sandy a re a over­ grown with grass and throny bushes. The place w as alm ost equi-distant from H a p u r and M eerut, both these places being roughly 24 kms away, and a b o u t 50 kms from D elhi. The area lay along the m ain highway. H e felt th a t this w ould be ideal for establishing a sugar mill. On his retu rn to P atiala he told his fath er a b o u t his great idea of setting up a factory at B egum abad. He go t the c u rt reply that he would have to arrange the finance himself. M r. M odi readily agreed. He acquired practically the whole o f Beguma­ bad village and started developing it. W hat was once a desolate area infested w ith reptiles an d dangerous crim inals, soon be­ came the nucleus o f an industrial tow nship, hum m ing with new life. T h at was the birth o f M o d in ag ar 45 years ago. W ithin a few m onths’ he raised the m oney required to put up a sugar factory, which was set up in 1933. H ow ever, nature and man, b oth seemed to be pitted against him . In the very first year o f the launching o f the factory, th e sugarcane crop was p o o r because o f an indifferent m onsoon. T he landlords in the area were angry because their agricultural lab o u r was being weaned aw ay by better opportunities for w o rk in the newly started factory. U n d au n ted , G u jarm a l set o u t to over­ come the problem s. He convinced the landlords th a t indus­ trialisation o f the a rea w ould be to th eir advantage as the value o f their landed p ro p erty would appreciate. W ith the develop­ ment o f roads in the area th eir m arkets w ould increase, he told them. By offering secure rou n d -th e-y ear em ploym ent he re­ leased landless lab o u r m ostly harijans, from veritable bondage. He exhorted the sm all trad ers o f H a p u r and o ther nearb y towns

32 to invest their m oney in industry fo r national developm ent as well as personal advancem ent, instead o f indulging in specula足 tion. H e b ro ught them together under an association fo r th a t purpose. Strange as it m ay sound, the industrial m agnate in the m aking went around on a bicycle for these missions. V isiting villages far and wide, he individually carried to the p eo p le his message o f prosperity th ro u g h industry. H e persuaded his relations everywhere to buy shares in the industry he was establishing. T hough less discernible, this kind o f spade w ork he h ad p u t in at the personal level was as m uch responsible as his business acum en and m anagerial skill in developing M o d in a g a r into w hat it is today. A cquisition o f lan d fo r the factory presented several com plex problem s, but these were tackled sm oothly by the tactful han d 足 ling and the sym pathetic attitude adopted by the young indus足 trialist. H e obtained the land on hire and on lease. The first man with whom he developed intim acy there w as M r. Ram Sarup, whose b ro th er was the h o n o rary m agistrate o f the area, and who helped him a lot by driving hom e to the village-folk the im portance o f industrialisation. T he simple village people were won over th ro u g h the im m ediate prospect o f increased opportunities o f em ploym ent, and the educated ru ra l elite were tackled through discussion and persuasion. G radually, M r. M odi was able to get about 100 bighas (ap足 proxim ately 62 acres) o f land, and w ork on the factory was taken u p in right earnest. A brick kiln was set up quickly a n d a place fo r p reparing m aterials for the foundation w as selected in the nearby village o f Sikri K hurd. T he level o f th e railway line running along the area was enough to serve as a ro u g h guide for deciding the p lin th level. The construction w o rk o f the factory was taken up with great speed. Even while the w ork was in progress, orders for the m achinery required fo r the mill were placed with a firm in England. F rom m orning till evening

33 M r. Modi w ould remain busy at the construction site and then at night, he would attend to the correspondence. When th e father learnt about the venture o f his son, he was visibly m oved because the success achieved by the son was beyond his expectations. He decided to go to B egum abad to see with his ow n eyes the am bitious venture o f his son. W hen he went to th e construction site, he m arvelled at the organising ability o f his son. To show his appreciation and to encourage his enthusiastic son M r. M ultanim al M odi offered to purchase shares w o rth Rs. 200,000 in the new venture. This gesture had the desired effect and G ujarm al set upon his task w ith added vigour and decided to increase the initial capacity o f the p la n t from 600 to n s to 800 tons.

Chapter F our


W ork at the site of the sugar fa c to ry progressed w ithout much difficulty. However, after the co n stru c tio n was com p­ lete— the plant equipm ent was installed at an expenditure o f Rs. 11,00,000 and the factory came in to actual operation on 15th September 1933—there were some serious and dam pening developments. T he drainage o f the effluent proved a problem . F o r sometime the pits o f the brick kiln served the purpose but soon the pits were filled to capacity a n d could n o t absorb any more water. The residents o f the village Sikri, apparently under the influence o f the landlords o f the area, were bitter on account o f the setting up o f the sugar factory n e a r the area o f their h ab i­ tation. As a protest they had co n stru c te d a bund on the o u t­ skirts o f the village thus obstructing the d rain ag e o f the effluent. The landlords o f the area were at the b a c k o f these irate villagers because the farm labour, which used to be em ployed by them on low wages was engaged at the c o n stru c tio n site on higher wages and with brighter prospects o f g ettin g absorbed in the factory. These villagers of Sikri not only co n stru c te d the bund but also m ounted guard over the en b a n k m e n t o f the bund fearing th at the factory owner might attem pt a forcible breach o f the bund. But breaching o f the bund w a sessential in order to drain out the accum ulated effluent o f t h e factory. All efforts to persuade the villagers to allow the accum ulated effluent to pass through the bund failed.

Mr. M o d i, th ereu p o n , thought

35 ou t a novel p lan .

H e knew that the area was infested w ith

dacoits belonging to the M aria tribe w ho used to lo o t people passing along th e highway as well as th ro u g h the busy area. There was, on this account, an understandable fear am ong the villa­ gers and no one dared to move out of the village after dusk. M r. M odi chalked o u t a plan to scare the village w atchm an away from the bund, b u t kept it a close secret. A m an was taken into confidence and was told to go to the bund site a t the dead of night and cry ‘M ar gay a, mar gay a', (killed, killed) a t the shot o f a fire gun. M r. M odi himself alongw ith the construction engineer went to the bund on a storm y m idnight. M r. M odi fired a few ro unds. The scheme had the desired effect, fo r the village w atchm an ran away to safety. This facilitated the w ork o f cutting breaches into the bund and the effluent was drained out. But th e p roblem , though solved for the tim e being, co n ti­ nued to stare M r. M odi in the face, fo r the villagers who were outwitted and beaten still nursed ill will against him. T hen, M r. M odi ad o p ted the wiser policy o f w ooing the angry villagers till some alternative for draining o u t the effluent was devised. He offered th em assistance in cash an d kind to reconstruct their houses, to reclaim their land and to m ake up fo r the loss suffered by th em . T h u s, he was successful in getting over the antagonism o f the villagers. The setting u p o f the sugar factory a t B egum abad was ju s t one step towards th e realisation o f the dream o f a new industrial empire cherished by M r. G ujarm al M odi. T he sugar factory was ready fo r op eratio n by the m iddle o f Septem ber 1933 and there were full tw o m onths to go before the new sugarcane crop was expected fo r crushing. But M r. M odi would n o t wait. He was anxious th a t the factory should sta rt functioning as early as possible. T herefore, one fine m orning he sum m oned all the engineers em ployed in the factory fo r consultation. H e ex­ plained his anxiety and wanted a solution.

A fter discussions

36 it was agreed that the intervening period o f two m onths should be utilised to convert raw sugar and gur into refined sugar with the help of the sugar refining unit o f the factory. Thus, by the end of O ctober th a t year 35,000 maunds (about 2,880,000 lbs) o f raw sugar was converted into refined sugar. This operation resulted in a loss to Mr. M o d i,b u t his enthusiasm was unabated. He set his eyes on the new sugarcane crop which was expected shortly. There was, however, a new developm ent. By this time, about 30 more sugar mills had been established in the country and they had m opped up alm ost all the best talents in the field. There was, therefore, a shortage o f able chem ists and other tech­ nical personnel to man the sugar factory. M r. M odi wisely decided not to confine his search fo r capable technicians inside the country alone, but to extend it outside as well. W ithin a reasonable time he was able to secure the service o f an experien­ ced chemist from H olland and two experts from Jawa. The conditions dictated by the foreign technical hands in ­ cluded high salaries, signing o f a w ritten agreem ent, com for­ table stay in a well furnished bungalow , free services o f two whole time servants at hom e and sum m er stay a t a hill resort. Judging by the living conditions in E urope during the recession o f the 1930s, these were really ex o rb itan t dem ands. But, then, one had to think o f the industrial prospects. Mr. M odi, there­ fore, agreed to all the demands. He hoped th a t foreign technical hands would be able to show better results in a m arket in which there was a dearth o f capable men. But these foreign experts could not deliver the goods. P roduction did n o t show any upward trend. This was a tim e o f grave trial fo r him. H e thoroughly investigated the cause o f failure and was at last able to locate it. He found th at the D utch chem ist had been neglect­ ful in discharging his duties. T aking a cue from him, other officers, too, had started ignoring their duties. A big percentage o f the sugar was going down the drainunutilised and the uneduca­

37 ted ru ra l w orkers were not am enable to discipline. Many absen足 ted them selves from duty w ithout p rio r intim ation. In o rd e r to im prove m atters, M r. M odi decided to stay within th e fa cto ry premises for all the 24 h o u rs. His presence in the fa cto ry h ad a m iraculous effect, fo r w ithin two weeks conditions in th e factory showed a m arked im provem ent. The workers sta rte d p u ttin g in their sincere effort a n d the result was that while su g a r m ills in the adjoining areas o f M eerut and M ohiuddinpur co n tin u ed to show losses, the M o d i mill showed a profit. A fter the first crushing season w as over M r. M odi left for P a tia la , his ancestral hom e, as it w as the off season and there was no w ork in the factory. The second season at the factory b ro u g h t in its wake a spate o f new problem s. The traditional h a b it o f th e Indian farm er was to m a k e gur from the sugarcane an d it was difficult to induce him t o sell his produce to the mill. Low sugarcane yield added to the p ro b le m andthen there was the p ro b lem o f creating the in fra stru ctu re o f roads to facilitate the tra n s p o rta tio n o f sugarcane from th e farm to the factory. There was also, a t the social level, the tra d itio n a l caste prejudice o f H in d u landlords against Harijan w o rk e rs who had been serving th em as bonded labour. T he em ploym ent o f this labour iby the m ill h ad naturally infuriated the vested interests in the landow ing class. But M r. M odi w ould n o t listen to the suggestion th a t H a rija n labour should be ou sted from the factory to appease the ira te landlord com m unity. In stea d , he rendered financial assistan ce to the Harijan w orkers. T h e forces o f nature too ap p e are d to pose a challenge to the y o u n g entrepreneur. The year 1934 saw the failure of m on足 so o n a n d th e consequent failure o f th e sugarcane crop. A dded to th is w as the attack o f frost w hich ruined whatever prospects o f th e c ro p were left. This m eant a p e rio d o f crisis for the sugar in d u stry . There were two alternatives now, either the factory sh o u ld be closed down or sugarcane should be transported from far-flu n g areas o f H ardoi, S h a h ja h a n p u r and Bareilly. Sugar

38 mills in M eerut an d M ohiuddinpur, too, were facing a similar cirsis and the im pression was gaining ground th at it was im pos足 sible to run sugar factories in W estern U ttar Pradesh. One industrialist from D elhi cam e forw ard with the suggestion that if all the factories in the area were put under his control, he would be able to solve their problem s. But M r. M odi decided to test his luck alone. While Mr. M odi was facing adverse circum stances at M odi足 nagar, conditions a t Patiala were no better. In the absence o f the enterprising son, the father had been incurring heavy losses in his industries an d the arm y supply contract business. W hatever little was earned from the m anaging agency business was neutralised by th e heavy losses sustained at Patiala. This had given a big jo lt to the father who sent a frantic call to his son to come and help him. T he young G ujarm al decided not to lose heart in the face o f the m ounting difficulties. The third crushing season saw Mr. M odi sitting with his fingers crossed. T his season, too, production o f sugarcane had been m uch below the estim ate. The profits m ade during the m onths o f Jan u a ry a n d F ebruary had been offset by the loss incurred during M arch and the only alternative now was either to bring sugarcane from o th er areas or to close the factory earlier and face losses and adm it defeat. Besides, M r. M o d i faced an o th er kind o f difficulty also. The sugarcane brought fro m far-flung areas gave less sugar because o f inversion in the juice. As a result, the production o f sugar was less and the percentage o f m olasses increased. This posed a problem which h a d no easy solution. As if Providence came to his help a t this ju n ctu re , one day when M r. M odi was having his afternoon nap, h e saw the figure o f a M ahatm a (an ascetic) in his dream . A t first the figure was unclear an d hazy. But g ra足 dually it became clearer a n d started talking to him. The Maha足 tma suggested to him that if a certain am ount o f fresh milk o f lime was added to th e sugarcane juice, it would solve all his

39 problem s. M r. M odi woke up in astonishm ent. H e had never met anyone resem bling the figure w h ich he had seen in the dream. Yet the figure appeared to b e fam iliar and re-assuring. He got up and began to recollect w hat h e had seen in the dream . The sub-conscious in him helped h im to recollect all th a t the M ahatm a h ad said in the dream . H e called for the D utch chemist and related to him his asto n ish in g dream . The D utch expert laughed at the idea o f using m ilk o f lime and w ould no t test it. But the young G u jarm al w as so convinced ab o u t the correctness o f the suggestion in the d re am th at he decided to try it. He to ld the D utch expert to q u it and entrusted th e task o f working on th e idea to M r. D e sraj N arula, who was then working as m an u facturing chem ist in th e factory. The novel idea suggested by him p ro v e d m iraculous, fo r the very next day M r. N aru la cam e ru n n in g with the happy news th at production in the factory h ad g o n e up from 400 bags to ab out 500 bags p er day after th e new idea had been p u t to test. Chemical analysis, done later a t different laboratories, revealed th at the new process discovered by M r. M odi had the effect of reversing the process w hich w as responsible fo r the low re足 covery. W hat h ad been happening so fa r was th at when sugar足 cane juice was k ept for a certain p e rio d of time, it becam e sour and acidic and this inverted the su cro se content in the juice and turned it into m olasses. The a d d itio n of fresh m ilk o f lime had the effect o f checking the in v ersio n thereby yielding higher quantities of sugar. T oday, it is c u sto m a ry to use this process in the sugar industry, but in th e 1930s when the sugar industry in India was still in its infancy, th is discovery was o f m ajor im portance, fo r it gave a n am azing b o o s t to the p ro d u ctio n o f sugar in the country. T his ac h iev em en t is all the m ore re m a r足 kable as it cam e from a p erso n w ho did not have any form al technical know ledge o f the su g ar in d u stry .

C h ap ter Five


M r. M odi w as pleased at the success of the new discovery m ade by him on th e basis o f the revelations m ade to him by an unknow n M ah atm a in a dream . The new discovery had faci­ litated a better recovery o f sugar from sugarcane juice. In the sum m er o f 1936 h e decided to go on a short holiday to Kashmir. But before u ndertaking the trip, he th o u g h t it better to have an audience with the then M aharaja o f Patiala. T h e M ah araja was already im pressed by the qualities and capabilities o f M r. M odi. He decided to p u t him to a test. M r. H ari K rishna Lai, a well-known industrialist of Bhatinda in P u n jab owed large am ounts o f m oney to the State exchequer. He h ad a wide net-w ork o f industries in different parts o f the state an d had secured loans from the State Bank o f Patiala against the security of these industrial units. The Chief M ini­ ster o f the State, M r. L iaquat Ali K han, and the Finance M ini­ ster, S ir G auntlet, h ad failed in their efforts to realise this money from him and the M ah a raja w anted to en tru st this w ork to M r. M odi. The M ah a raja offered the services o f 100 strong band of arm ed guards to help him in this w ork. M r. M odi declined the offer o f security guards but readily accepted the task. He aban d o n ed his holiday plans and decided to proceed to Bha­ tin d a th e sam e day. T he M anager o f the mill at B hatinda was a British national an d in those days w hen the Political A gent o f the British G ov­ ern m en t had co n tro l over every field o f activity, this m anager

41 was able to wield trem endous influence in public life. Even p er足 sons in high office did n o t dare enter the premises o f the factory which was u nder his charge. M r. M odi, however, decided to undertake the arduous task o f taking over the m anagem ent o f the mill by using this very British M anager an d his Indian secretary, Mr. T ara C hand. H e invited both o f them to tea a t the Rest H ouse and while both were busy enjoying a cup of tea, M r, M odi quietly m ade his way to the factory w ith the intention o f taking charge o f the mill in their absence. T aking charge o f the keys o f the cash box proved very easy because the chief cashier was overawed by the personality o f M r. M odi and did n o t suspect any foul play. He readily agreed to h an d over all the keys o f the cash box. Once this was done, the rem aining task did n o t present any hurdle. W ith his deft handling o f the situation, Mr. M odi succeeded in achieving his seemingly insurm ountable goal w ithout the use o f any force. As a gesture o f goodw ill, which also reflects his tactfulness, M r. M odi allowed the British m anager to continue in his post. W hen the M aharaja heard the happy news, he was overjoyed and he decided to ap p o in t M r. M odi as the official receiver of the mill. This was a unique honour for M r. M odi because norm ally this post is reserved for one who is acquainted w ith law o r who is in the legal profession. When M r. H ari K rishna Lai heard the news, he was beside him self with fury and immediately lodged a com plaint w ith the British G overnm ent against the ruler o f Patiala. In his com 足 plaint M r. L ai alleged th a t the factory at B hatinda h ad been taken possession o f by force. The M aharaja in those days was n o t on good term s w ith the then Viceroy o f the B ritish G overn足 m ent and he feared some legal action m ight be tak en against him. M r. M odi was, therefore, sum m oned once again fo r consultation. B ut the latter had accom plished the whole task w ithout leaving any legal flaws whatsoever. Therefore, when the Political A gent started the enquiry, he was show n the transfer

42 deed signed by the M anager a n d th e secretary o f the mill.


totally belied the allegation o f use o f force and so the M aharaja was acquitted o f the charge. This second achievem ent was certainly greater th a n the first, fo r the M ah araja now began to have full trust in him and started consulting him on every im足 p o rtan t m atter concerning the State. These incidents obviously added to the self-confidence o f M r. M odi. While working a t the B hatinda mill, M r. M odi had the opportunity of testing the behavioural pattern o f the bureau足 cracy. The factory was being run efficiently under his able guidance. A small tract o f land and a few villages form ed part o f the fixed assets o f th e factory and M r. M odi decided to auction them. An advertisem ent was, accordingly, issued. But the then Deputy C om m issioner had his eye sset on this auction. He approached Mr. M odi an d suggested th a t if one village and a part o f the land were given over to him a t a lower price with足 out auctioning it, he w ould be w illing to share h a lf the am ount thus saved with Mr. M odi. W hen Mr. M odi declined the offer, the Deputy C om m issioner felt offended and sought an opportunity to take revenge. One such occasion came his way w hen the Revenue M inister o f the State paid a visit to the office o f th e D eputy Com missioner. W ord was sent to M r. M odi to send one slab o f ice from the factory and as expected, no m oney was sent fo r it. M r. M odi sent the slab as requested bu t p aid its price from his own pocket. The Deputy C om m issioner m ade a note o f this incident for future use. On an o th er occasion M r. M odi had to travel to Bhatinda in the com pany o f his father. W hile the son used to travel first class, the father alw ays preferred to travel second class. As usual, M r. M odi purchased a first class ticket but, in deference to the wishes o f the father, decided to travel with him in the second class. T he D ep u ty C om m issioner thought th at this was another good occasion for him to take revenge. Immediately he took action. A p h o to g rap h o f M r. M odi

43 travelling in the second class was ta k e n and a com plaint was lodged with th e M aharaja alleging th a t Mr. M odi had been giving away slabs o f ice to people w ith o u t charging any price and that while he had travelled in th e second class, he had charged for first class. The p h o to g rap h w a s presented in support o f the second allegation. This was sufficient to create an elem ent o f doubt in the m ind o f the M a h a ra ja who summoned M r. M odi and asked him to explain his c o n d u c t. Mr. M odi had to show th at he had actually purchased a first class ticket but was obliged to sit with his father in the second class. Similarly he was able to prove th a t he had paid the p ric e o f the ice from his own pocket. M r M odi, was, th u s, ex o n erated , but this incident shook his faith in the bureaucracy. He realised th at an officer was an officer first and a friend afterw ards. But in the m ind o f the M a h a ra ja , this incident created a trem endous am ount o f goodwill f o r Mr. Modi. H e was entremely pleased with his blotless co n d u ct and offered him a contract for the factory a t a concessional rate. However, M r. M odi preferred to let his cousin, M r. H arnam Singh M odi, become m anager o f the factory, a n d kept himself alo o f from its affairs.

C h ap ter Six


M r. M odi now concentrated his atten tio n on the develop足 m en t o f industry a t Begumabad. The th ird crushing season had b ro u g h t in its w ake a few m ore serious threatening problems. P ro d u ctio n o f su g ar during these years had crossed the de足 m and and in view o f the glut in the m arket, the sugar factories were obliged to sell their product at below -the-cost prices. This was a period o f crisis for the industry. M r M odi then hit upon the idea o f organising the sugar factory ow ners into a syndicate w hich would co n tro l the price levels and also regulate the flow o f sugar stocks in the m arket. Official blessing came forth readily and thus M r. M odi was able to tackle one serious p ro 足 blem o f the industry at least tem porarily. W hile the year 1936-37 was the year o f crises for the sugar industry, the year 1938-39 saw it achieve m aturity and stability. This y ear saw the b irth o f Sugarcane D evelopm ent Cooperative Societies. The concept o f having com m and areas for sugar mills was also introduced during these days. All the farm ers in a p artic u la r area were organised into one cooperative society and all the supplies o f sugarcane to a p articu lar mill were regulated with the assistance o f the cooperative society w orking in that area. T he factory ow ners quickly realised the im portance o f these societies and a com m ission o f one p e r cent was fixed in o rd er to build up the finances o f these societies. The am ount th u s collected was utilised to repair, im prove and augm ent the net-w ork of roads in th e area. A lm ost all th e new roads which

45 were laid in th is a re a during the course o f the early years were constructed by these cooperative societies which also played a leading role in im p ro v in g the lot o f the farm ers. T he growers were now assured o f a certain fixed price for their produce and they had no longer to wait in never-ending queues outside factories. W ith his u ntiring efforts Mr. M odi was thus able to put the sugar in d u stry in Western U.P. on a stable footing. At the same tim e, th e welfare o f the w orkers was n o t neglec­ ted by Mr. G u jarm a l Modi. In 1938 a w ater supply system was laid by him to ta c k le the basic problem o f drinking w ater for the w orkm en em ployed in the factory. One m edical offi­ cer was also a p p o in te d to look after the health needs o f the labour force and th e medical facilities available at the hospital were throw n open to th e general public. The sugar fa c to ry provided only seasonal em ploym ent to labour and was n o t conducive to the establishm ent o f the in ­ dustrial town envisaged by Mr. Modi. H e had been, therefore, on the lo o k o u t fo r so m e other factories in o rder to provide yearround em ploym ent t o the workers and be able to give them a n opportunity to stay n e a r the place o f their em ploym ent. A fter considering several schem es Mr. M odi decided to go in for a vanaspati m an u fa ctu rin g unit. He had already toyed w ith this idea in 1928 at P a tia la when his plans were fru strated because o f the refusal o f th e then M aharaja to grant him necessary permission. A t C a lc u tta , too, his plans in this regard h ad n o t materialised in 1932 because he was not able to m obilise suffi­ cient capital to estab lish the factory. A better o p p o rtu n ity came his way in 1939. This was the tim e when G erm any was engaged in hectic p re p ara tio n s for W orld W ar II. T ra n sp o rt of civil m aterial at t h a t tim e was given a very low priority. H o w ­ ever, M r. M odi m a n a g e d to im port all the m achinery needed by him for estab lish in g the factory, and by the end o f June 1939 the new factory s ta rte d operating. In those days th e vanaspati m anufactured and m arketed by

46 M/s. Lever Brothers, Bom bay ( n o w M /s. H industan Lever Ltd.) was very po p ular and it was g i v i n g the highest percentage o f profit to the com pany. T heir f a c t o r y in India was the first o f its kind, and when the M odi V a n a s p a t i M anufacturing com ­ pany started functioning, the m a n a g e m e n t o f the Lever Bros., did not like it. They offered to p u rc h a s e all the assets of the factory at double the am o u n t o f m o n e y invested. M r. M odi rejected the offer outright. T h is e n ra g e d th e m anagem ent o f Lever Bros., who decided to f o r c e Mr. M odi into subm ission. The strategy of underselling t h e ir p ro d u c t was ad o p ted in the area served by M odi’s K otogem a n d the result was th a t in areas like M eerut and G haziabad v a n a s p a ti m an u factu red by Lever Bros started selling at b e lo w -th e -c o s t prices. M r. M odi had anticipated this and he also knew t h a t if he could face this c u t­ th ro at com petition for som e tim e , h e w ould be able to win. This com petition went on for a b o u t a year an d at the end o f this period Lever Bros., was forced to re v e rs e its strategy. The progress o f W orld W ar II g a v e a boost to the dem and for vanaspati which in tu rn resulted i n a rise in price. Vanaspati, therefore, became a gold mine a n d IC otogem , too, becam e very popular. By this tim e M odis h a d s t a r t e d using c o tto n seed oil for the m anufacture of vanaspati. Tatas too im plicated M odis i n t o a copyright suit concerning the use of the brand nam e o f K o t o g e m and threatened to spend huge am ounts of money to pu rsu e t h e case. W hen they did not succeed in the lower court, they w e n t up to the High C ourt, but there too they could not s u b s ta n tia te the charge o f the in­ fringement o f copyright and h ad t o p a y the costs u n d er a H igh C ourt decree. In 1940 M r. M odi established a w ashing soap factory by utilising the waste sludge resulting f r o m the processing o f vanas­ pati. A fter his initial success w ith th e w a sh in g soap project, Mr. M odi decided to go in for a toilet s o a p factory. This was no easy


task , for no soap m anufacturer in the organised sector was wil­ ling to reveal the details o f his m anufacturing process. He visited V aranasi a n d saw some small-scale factories but this did no t satisfy him. Thereafter, he went to C alcutta and sought the h elp o f his friend M r. Bajoria, but here, too, he did n o t suc­ ceed. He was disappointed, but he refused to accept defeat. Suddenly one day he thought o f a clever plan. H e m ade his way to a big soap-m aking factory in an ordinary dress on the excuse o f getting some drinking water. He secured entry into th e factory prem ises and was able to talk to one Bengali gentle­ m an, Mr. D as G u p ta, who he learnt later, was the chem ical engineer o f the factory. M r. M odi approached him as an o r­ dinary, innocent person and enquired, “ W hat do you m anu­ factu re here. Sir ?” “T oilet soap” , was the reply. “ Really ? C an toilet soap be m anufactured in

In d ia?” M r.

M odi asked in am azem ent. “ Why n o t” , replied the chemical engineer, and in o rd er to reassure the unfam iliar visitor, he olfered to show him round th e factory. This provided Mr. M odi the m uch-needed o p p o r­ tu n ity to study the soap-m aking process. It was here th a t he cam e to know th a t the white oily substance which was stored in the factory in huge wooden barrels and was being used in the m anufacture o f toilet soaps was nothing else but tallow. “ C an’t we m anufacture toilet soap w ithout the use o f ta l­ low ?” M r. M odi enquired. “ N o ” said the chemical engineer, “ for it is only tallow which keeps the soap cake hard and dry.” “ I can m ake it possible” , asserted the visitor. “Will you use vanaspatiV’ “ Yes” “ But th a t will be a costly affair.” “ Sometim es sentim ents have more value than m oney,” serted the visitor.



This casual acquaintance betw een the two grew and Mr. M odi was able to persuade M r. D asg u p ta to jo in his toilet soapm aking project at M odinagar. A nd, thus, the year 1941 saw the emergence o f the toilet soap factory at M odinagar. Modis started m anufacturing soaps under the bran d nam es, M odi No. 1 and Prefect soap. In 1941 came the M odi Tin F acto ry to fulfil the dem and of the vanaspati unit for tin containers. The construction o f the M odi Hospital too was taken up the sam e year. By now the ever-expanding activities at M o d in ag ar had com e to a p oint where M r. Gujarm al M odi had to decide to cut off his links with Patiala. The year 1941-42 saw m any countries get involved in the W orld W ar and the British G overnm ent was hard pressed for resources and for arranging civil supplies for the arm ies. It wanted to involve its pro tecto rates to o in the w ar effort. In India several new industries were set up to provide civil supplies to the armies. The biggest need o f the h o u r was food and clothing. Some way had to be fo u n d to process dehydrated vegetables and other foods for the arm ed forces. An English General was asked to explore the possibilities o f setting up such industries in India. T he G eneral cam e to this country and cal­ led a meeting of the leading industrialists. H e was surprised to see th at no one was willing to com e forw ard to set u p any such industry. M r. M odi was the only in d u strialist who came forw ard and offered to try his hand in this line. H e was given one m on­ th ’s time to submit his scheme. M r. M odi had to start from scratch because the necessary technical know -how for such an industry was not available in the country. M r. M odi was all the time thinking about m aking a blue-print o f the m achinery for the factory. Suddenly once again he saw the im age o f the M ahatm a in his dream . T he im age was clear and fam iliar. On his request the M ahatm a to o k him to a p lan t in G erm any,

S h ri G ujarm al M odi in discussion w ith S h ri Ja w a h a r L ai N ehru during his visit to M odi N a g a r.

49 and showed him the different parts o f the m achinery. W hen the reverie broke G ujarm al found him self lying on his cosy bed. He was overjoyed as the dream sequence h ad set his m ind at rest. H e sketched a blue-print. A wooden m odel o f the dehy­ drating m achines was prepared on the basis o f the rough sketch p ro v id ed by M r. M odi which was later on im proved an d in co r­ p o rated into prototype machines which were fu rth er im proved for the factory. Thus on 28th M ay 1941 was b o rn the M odi F ood P roducts, based entirely on the ideas provided by the enterprising young industrialist. On 18th D ecem ber 1941, this factory was separated from the sugar factory and converted into a public lim ited com pany. Sometim e later a new company, M odi Supplies C o rp o ratio n Ltd. was set up to process dry fruits into cakes and tablets fo r the use o f th e arm ed forces. The dehydrating p lan t o f the M odis was the first o f its kind in the country. The dehydration p ro ­ cess was paten ted by M r. M odi and dedicated to the G overnm ent o f India. M eanw hile, M r. M odi continued to expand facilities for his w orkers. T hey were given canteen facilities a t M od in ag ar and a school was opened for the benefit of their children. In 1942, M r. Jaw ah ar Lai N ehru, Leader o f the N a tio n al M ovem ent, visited the School and a purse was presented to him . M r. N eh ru is reported to have quipped: “Is it m eant to stop me from incit­ ing y o u r w orkers ?” P at came the reply fi'om M r. M odi, “ I f an outsider can exercise so m uch influence on my w orkers, one can imagine how m uch influence I have over them .” M r. N e h ru was pleased and he praised the sense of goodwill show n by M r. M odi tow ards his workers. The title o f R ai B ahadur was conferred on G ujarm al M odi at a form al investiture ceremony held at the G overnm ent H ouse, Lucknow , on 28th Novem ber 1942. His Excellency Sir M au ­ rice H allet, the G overnor o f the then U nited Provinces, read out the citatio n th a t M r. M odi had “ not only rendered a valu­


able contribution to supply” but had also show n him self as “ a generous helper o f all good causes” an d h ad “ considerably con­ tributed in the furtherance o f the W ar E ffort.” The same year Mr. M odi established a girl’s school for the benefit o f children o f the w orkers em ployed a t M odinagar. All these years he had not been oblivious o f M ahendra G arh, his birth-place. H e took a num ber o f m easures for the welfare o f the people o f the area. In 1942 he constructed a W om en’s Hospital at M ahendra G arh in the m em ory o f his grand-m other, Mrs. Jai Devi, and handed it over to the G overnm ent. The hospital fulfiled the long-standing need for a w om en’s hospital in the area. M r. M odi also felt th at there should be a high school at M ahendra Garh. There was only one m iddle school for the villages surrounding this town. In 1943, M r. M odi established a higher secondary school under the nam e o f Y adavendra M ultanim al M odi Higher Secondary School. The G overnm ent o f India was so far im porting biscuits from abroad. In 1943 M r. M odi was encouraged to set up a biscuit m anufacturing factory. C onstruction o f the factory was pro m p t­ ly taken up, the machinery was im ported and the factory started m anufacturing a variety o f biscuits two years later. Sim ulta­ neously, a confectionary plant was also set up. Rai B ahadur M ultanim al M odi C h aritable T rust was formed in the same year in order to carry on various public welfare activities. The rules of the T rust were approved at its first m eet­ ing held at P atiala under the C hairm anship o f his father. A cash grant of Rs. 10,00,000 and a G uest H ouse at the pilgrim centre o f H ardw ar com prised the first d o nation m ade by Mr. M ultanimal M odi to the Trust. M odi Oil Mills was set up in 1944 to m eet the needs o f the vanaspati unit for pure cottonseed oil and g ro undnut oil. As a token o f his love and affection for the Jciwans, M r. M odi constructed an im posing Sainik B haw an at M eerut and dedica­

51 ted it to the Jawcms. Acquisition o f land for constructing living accom m odation for the ever-increasing lab o u r force em ployed at M odinagar presented a problem . M r. M odi was able to persuade the Governm ent to h an d over to him a m ilitary cam ping ground opposite the sugar mill. A scheme fo r construction o f living quarters for the w orkers was taken up. In 1944, when the oil mill was established, an o th er dispensary was set up for the benefit of the w orkers there. By this time, M odi H igh School had started attracting an increasing num ber o f students from the surrounding villages. The construction o f boys’ hostel for these students was, therefore, taken up in 1944 and com pleted in 1945. C onstruction o f a teachers’ colony was also taken up the sam e year. The year 1945 saw the end o f W orld W ar II. The British G overnm ent heaved a sigh o f relief at the end o f the war. As a natural corollary to the end o f the W'ar, industries like M odi Food Products and M odi Supplies C o rp o ratio n were w ound up. In appreciation o f the sevices rendered by him during the war period, M r. M odi was taken in an im posing procession through the m ain streets o f M eerut. A t the head o f the proces­ sion Mr. M odi was seated on a well d ecorated elephant and along with him sat the D istrict M agistrate. A n o th er elephant carried the A dditional D istrict M agistrate an d the Tehsildar o f M eerut. The m ilitary p arade which follow ed these elephants passed through the m ain ro a d o f the city. C oins w orth Rs. 5,000/were showered by the G overnm ent on M r. M odi. It was at this tim e th a t the G overnm ent thought o f confer­ ring knighthood on him as a m ark o f fu rth e r appreciation o f the valuable services rendered by him . W hen M r. M odi’s father was inform ed ab out the G o v ern m en t’s desire, he is reported to have rem arked th at it w ould be better if som e ‘In d ian ’ title was con­ ferred on the son. M r. M odi conveyed the wish o f his father to the G overnor who suggested th a t nstead o f ‘kinighthood’

52 the title o f R aja B ahadur m ight be conferred on him. The G over­ n or conveyed his suggestion to th e Viceroy. The problem , how ­ ever, was th at this title was generally conferred on big landlords or on those who ow ned village property or were owners o f farm lands. M r. M odi neither ow ned any villages nor was he a big landlord. In o rd e r to remove this difficulty the G overnor sug­ gested th at the colony set up by M r. M odi near Begum abad be nam ed M odinagar and in his capacity as the founder o f the colo­ ny the title of R a ja B ahadur be conferred on him. In 1945, therefore, the industrial colony founded by M r. G ujaral M odi was form ally and officially nam ed M odinagar. The names o f the post office, R ailw ay S tation and Police Station also were changed fro m B egum abad to M odinagar. The year 1945-46 saw events o f m ajor political significance taking place in th e country. T he ‘Q uit India M ovem ent’ o f 1942 had m ore th an convinced the British G overnm ent th at it would have to grant an am ple m easure of autonom y to the country. They knew well th a t they were able to secure public cooperation d u rin g the W ar only in exchange for the prom ise o f granting au tonom y to the In d ian people. In 1945, therefore, elections to the provincial legislature were held, and next year elections to the C onstituent Assem bly took place. The Interim G overnm ent, w hich was form ed in Septem ber 1946, decided to stop the practice o f conferring titles in vogue during the B ritish regime. The question o f conferring the title o f R aja B ahadur on M r. M odi, was, therefore, deferred. In view o f the fast pace o f expansion and developm ent o f M odinagar, a T ow n A rea C om m ittee was constituted by the G overnm ent in 1746. The C om m ittee was entrusted w ith the task o f looking afte r public health, sanitation, lighting and other civic needs o f the area. M r. G ujarm al M odi, as the founder o f the tow n was naturally nom inated, and later on elected the first C hairm an o f th e Town A rea Committee.



On June 17, 1946, R. B. M u lta n im a l M odi C haritable T rust decided to construct one Sadhu A shram at Patiala for the benefit of sadhus. A scheme to sta rt a S anskrit Pathshala was also approved by the T rust.

C hapter Seven


In 1946, Mr. G ujarm al M odi decided to set up a textile mill a t an estim ated co st o f Rs. 10 m illion. A big p lo t o f land adjoining the existing factory in village Sikri was selected fo r the purpose and after prelim inary negotiations w ith the parties concerned, the G overnm ent w as approached for perm ission to acquire the land from the G u ja r land-owners. The G overnm ent granted the necessary perm ission and M r. M odi to o k possession o f the land on 6th June 1946 w hen there was an unexpected development. The G u jars of the area were dissatisfied over the G overnm ent decision to perm it acquisition o f the land. A t th a t time a large num ber o f com m unist leaders and w orkers h ad gathered at Delhi to take p a rt in the im pending strike by railwaym en. The strike, how ever, fizzled o u t and therefore the com m unist wor足 kers h a d to retreat. On their way back, some o f them stopped a t M o d inagar and dem anded a sum o f Rs. 5000/-from M r. Modi but he refused. The com m unist leaders decided to incite the mill w orkers against M r. M odi. Loud speakers were installed in fro n t o f the facto ry gates and a venom ous propaganda tirade was let loose ag ain st Mr. M odi. A com plaint a b o u t a th reat to peace in the mill area was lodged with D istrict M agistrate at M eerut who forw arded it to the new G o vernm ent at Lucknow . The P arliam entary Sec足 retary attach ed to th e M inistry o f H om e Affairs in the new G overnm ent reportedly told the D istrict M agistrate th a t the new po p u lar M inistry was not bound to follow the old British practice


o f patronising an d protecting capitalist interests. In view o f this advice, the D istrict M agistrate decided to keep quiet and to o k no action in the m atter. W hen Mr. M odi was apprised o f this new policy o f the p o p u la r ministry, he, too, decided to w atch the situation quietly. M eanwhile, the communists and others started spreading all sorts o f ru m o u rs in the surrounding villages. One such ru m o u r was th a t the new Governm ent had issued orders th a t every farm er w ho had supplied sugarcane to the sugar factory was entitled to get free o f cost sugar to the extent o f 1/IO th o f the sugar produced from the cane supplied by him. The irate landlords o f the Sikri village joined h ands w ith com m unist elem ents and incited the farm ers. The result was th a t on 26th June 1946 a huge mob collected in fro n t o f the sugar mill. It included young girls and both undergraduate a n d p o st足 graduate students from Meerut. The girl students an d sm all children were k ept at the head of this m ob an d the com m unists and others arm ed with lathis kept themselves behind them . The organisers o f this dem onstration perhaps expected th a t the watch an d w ard staff o f the mills w ould be ordered to open fire on the restive people and this would give the agitated m ob an opportunity to level the allegation th at M r. M odi h ad com m it足 ted excesses ag ainst a peaceful gathering. B ut th a t did n o t happen, for th e far sighted industrialist h ad anticipated such moves on the p a r t o f these elements and h ad quietly disarm ed the watch and w ard staff. The angry m ob beat the w atch an d ward staff an d slappd them in their faces an d threw their tu rb an s away. However, even these tactics failed to provoke the w atch and ward staff into reacting in any violent m anner. F rom the sugar mill the mob proceeded to the biscuit mill where the sam e dram a of violence was enacted. A s a m easure o f safety, M r. M odi had to order all the factories to close dow n fo r the day. The row dy elements continued their tactics alm ost th roughout th e day and retreated only late in the evening.

56 M r. M odi lodged a report ab o u t these incidents w ith the D istrict M agistrate who prom ised to ho ld an inquiry into the m atter. N ext day when the D istrict M agistrate and the police officer in charge o f the area came to the scene o f the incidents, they, too, were m anhandled by rowdy elem ents. One person threw the pea-cap o f the Police Chief, a British national, and another snatched away his baton. The police chief refrained from using force, fo r he did not w ant to incur the displeasure o f the new G overnm ent. But as the crow d becam e m ore restive, a few o f the row dy elements were ro u n d ed up an d taken to the local Police S tation. The m ob, how ever, was able to secure their release u n d er the threat o f futher violence. The police officers left for M eerut with the prom ise to retu rn in the after足 noon, b u t they never came back. The irate m ob led by the rowdy elem ents continued their dram a o f violence fo r eight days. D uring this period life in the town came to a standstill. There was panic all a round and it appeared as if lawlessness had become the law o f the day. As the situation in the town continued to deteriorate, M r. M odi decided to go to Lucknow to discuss the m atter with the M inisters o f the new G overnm ent. T here M r. M odi m et Mr. G ovind B allabh Pant, Mr. Rafi A hm ed K idw ai and M r. K. N. K atju, the C hief M inister, the H om e M inister and the M inister fo r Ind u stry respectively. H e was able to convince them th a t if it was intended th at no p ro tec tio n should be affor足 ded to the industries or th at the industries should n o t function at all, it would be b etter to order their closure in a peaceful m an足 ner, b u t the type o f rowdyism which was being perm itted in M odinagar did n o t benefit anyone. M r. M odi came back from Lucknow after securing an assu足 rance th a t due protection would be given to the industries at M odinagar. The factories in the tow n were able to resum e norm al working a fte r about ten days o f disorder. M r. M odi now started his search for an alternative site for


t h e t e x t i l e m i l l an d finally selected a b ig p lo t o f barren land near v illa g e B i s o k h a r . C onstruction of t h e factory building was s t a r t e d i n 1946 after the necessary fo rm alities o f acquiring and d e v e l o p i n g th e land h ad been com pleted. M obilising capital f o r t h e f a c t o r y did n o t present any obstacles. In view of his p a s t p e r f o r m a n c e . M r. M odi was able to arrange all the neces­ s a r y s l a a r e c a p ita l w ithin three days o f floating o f shares. I n i 9 4 7 h e decided to start a paints a n d varnish factory. Mr. J V t o d i m a d e a big contribution in dev elo p in g indigenous know ­ h o w in t h i s field. T h e y e a r 1947 also saw a big change fo r the better in his life. T h e e n t e r p r i s i n g industrialist h ad alw ays preferred to live am ong t l i e w o r k e r s w ho ra n his factories. T h is helped him to share t h e i r j o y s a n d sorrow s and also to k n o w their difficulties. It w a s t h i s w h i c h helped him win the fa v o u r o f the ministers o f the p o p u la r G o v e rn m e n t in U tta r P ra d e sh . S o f a r M r. M o d i had been w e a rin g his traditional dress c H u r i d a r s a n d achken studded with g o ld e n buttons and a tu rb an i n t h e t r a d i t i o n a l Jo d h p u ri style. H o w e v er, while at Lucknow, h e w a s h i g h l y im pressed by the m inisters. In deference to the w i s h e s a n d advice o f the popular C h ie f M inister, M r. M odi d e c i d e d t o change his style o f d ress. The expensive dresses o f t h e in d u s tr ia lis t gave way to sim ple ones and the royal-style t u r b a n g a v e w ay to a simple G a n d h ia n style white cap. P a r t i t i o n o f the country in 1947 b ro u g h t in its wake several p ro b le m s . L akhs o f refugees from areas which went over to P a k i s t a n m ig ra te d to India. Their reh ab ilitatio n caused severe s tra in


th e

co u n try ’s economy.

T h e new governm ent o f

i n d e p e n d e n t India decided to a d o p t a policy of prom oting i n d u s t r i e s b o th in the private and p u b lic sectors. IV T r. M o d i had already placed o rd e rs for machinery for the t h e t e x t i l e fa c to ry w ith a firm in E n g la n d in 1947. The arrival o f m a c h i n e r y in In d ia had been d elay e d m uch beyond the sche­ d u le d

p e r io d .

M r. M odi had so f a r mobilised

50% o f


58 share capital and m o b ilisa tio n o f th e rem aining 50% was creat­ ing difficulties b e c a u se o f the non-arrival o f the m achinery. M any o f the refugees who h ad purchased shares o f the M odi Spinning & W eaving M ills Co. L td. were obliged to sell their shares in the m arket w ith the result th at the m arket value o f the the shares fell to a lm o s t half their face value. Mr. M odi had to step in and purchase a large num ber of shares in order to m ain­ tain the price-level. T his restored the confidence in the share m arket. M r. M odi was a n x io u s to know when exactly he could ex­ pect the im ported m ach in e ry from England. Therefore, in M ay 1948 he sent his y o u n g e r b ro th er M r. K edar N ath M odi to England. However, i n England he was greatly disappointed by the lack o f sy m p a th y shown tow ards Indian business interests by the Indian a m b a s sa d o r there. M r. K edar N ath M odi issued a press s ta te m e n t saying th a t the M odis had come to the conclusion th at c o n d itio n s in the British industries in England were deteriorating a n d since they h a d not been able to get all the textile m achinery f o r w hich orders had been placed as far as two years back, th e y were now obliged to place their orders in America. This sta te m e n t was refuted by the M inister for Trade in the British G o v e rn m e n t who insinuated that the M odi belonged to an average class o f Indian businessmen and may not be in a position to p a y for the m achinery. Mr. K ed ar N ath M odi thereupon issued a rejoinder. He declared th at he was prepared to show ‘le tte rs o f credit’ and other docm uents to prove th at the M odis w e re in a position to pay for the machinery worth Rs. ten million. The Indian am bassador initiated enqui­ ries and when he cam e t o know the actual position in this regard, he was sorry for the a p a th e tic attitu d e adopted by him tow ards M r. M odi. The B ritis h G overnm ent also then gave him due honour but expressed its inability to secure the machinery re­ quired for the textile m ill. M r. M odi, therefore, left for Am erica and succeeded in se c u rin g the necessary m achinery from there.

59 M any industrialists had ea rn ed huge am ounts o f profit d u r i n g W orld W ar II.

Therefore, the new governm ent at the C e n t r e

set up an Inquiry B oard to go into th e financial c o n d itio n s o f the industries established d u rin g this p e rio d and to detect ta x evasion, if any. The B oard sta rte d enquiries and tax asse ssm e n t proceedings were initiated ag ain st a num ber o f b u sin essm en . As an industrialist who h ad u n d e rta k e n huge expansion o f in 足 dustries during th a t period, M r. M o d i also cam e under the p u r 足 view of this inquiry. He was alread y facing the p ro b le m s o f im porting textile m achinery fro m a b ro a d , and m obilising th e rem aining am ount o f share m oney fro m the share-holders, a n d now he was faced with the th ird p ro b lem o f tax asse ssm e n t. His financial advisers counselled him to d ro p the idea of s e t t i n g up the proposed textile m ill, b u t he refused to listen to t h e m . He was o f the opinion th a t fo r an industrialist m a in ta in in g the public image was m ore im p o rta n t th a n facing an enquiry a n d , possibly, losing some m oney as a result o f tax assessm ent. H e was, therefore, determ ined to go ah e ad with his project. In 1948 M odi H osiery F acto ry a n d M odi T ent Factory w e re started. In the sam e year M o d i H ig h School was c o n v e rte d into M odi Science & C om m erce College. It had been estim ated th a t a b o u t 2,000 w orkers w o u l d be needed for the new textile factory. T here was also the p r o b l e m o f rehabilitating the refugees from Pakistan. He, th e re fo re , thought it p ro p er to establish a new colony for the re fu g e e s at M odinagar. M r. G ovind B allabh P a n t was then the C h ie f M inister o f U tta r Pradesh. M r. M o d i placed his p r o j e c t before him and gave the u n d erta k in g th a t if he was g r a n te d a loan to establish the new colony, he w ould return with i n t e r e s t every rupee loaned to him by th e G overnm ent. He also w a n t e d permission to establish a few co ttag e industries fo r the b e n e f i t o f the refugees. The U .P. G o v e rn m en t gave him the n e c e s s a ry perm ission to go ahead w ith th e p ro jec t. The M odi S pinning & W eaving M ills Co. Ltd. was i n a u g u 足

60 rated by M r. P a n t on June 29, 1949 an d o n the same day he laid th e fo u n d atio n -sto n e of the new c o l o n y which was nam ed G ov in d p u ri after his name. The U .P. G o v e rn m e n t gave an advance o f Rs. 3 m illion for the c o n s tru c tio n of the colony. The refugees were also perm itted to have t h e i r adm itted claims o f com pensation fo r property lost because o f partition set off against the p rice o f the houses purchased by th e m in this colony. In 1949 M r. M o d i established a la n te r n factory which was inaugurated by C .B . G upta, the then M i n i s t e r for Industries in U.P. o n M ay 13, 1950. The quality o f th e lanterns produced in this factory com pared very favourably w i t h those im ported from G erm any. T h e factory could p r o d u c e 5000 lanterns per day. T he same year M r. M odi was invited to t h e F ourth C onven­ tion o f the All In d ia M anufacturers’ O rg a n is a tio n at Delhi on 26th M arch, 1949. I n his address he d e c la re d that political free­ dom was m eaningless if there was no e c o n o m ic freedom . M r. M odi always fav o u red progressive e x p a n s io n of industries. In 1950-51 M o d i G irls School was u p g r a d e d and nam ed R ukm ini M odi G irls ’ College. T ow ards the en d of 1951 Mr. M odi h a d t o face a distressing situation. I t was th e m onth o f N ovem ber a n d he was about to leave fo r M adras to participate in th e m e e tin g o f the E xport A dvisory C om m ittee. Just then his y o u n g er b r o th e r , M r. K edar N ath M odi broke th e news th at D elhi Police h a d fram ed charges against the M odis alleging th at they h a d c o llu d e d with railway officials and h ad em bezzled railway c o n s ig n m e n ts w orth several thousands o f rupees. The news was s h o c k i n g but M r. M odi advised his b ro th er to have patience, fo r he h a d always believed th a t tru th ultim ately prevails. T he real story regarding this allegation w a s revealed only later. A pparently, there had been som e h e a te d exchange o f words between the Claim s Inspector o f th e railways and the M ovem ent Officer o f the Modi mills, and t h e Claims Inspector

61 h ad felt insulted and offended. W ith the help o f one o f his rela­ tives w ho was a senior official in the C ID , the Inspector m an a­ ged to get Mr. M odi involved in an em bezzlem ent case. The Claims Inspector, on the advice o f the C ID official, sent an anonym ous letter of com plaint to the Prim e M inister alleging that during the disturbed conditions o f the p o st-p artitio n days Mr. M odi had entered into a conspiracy w ith the railw ay officials and h ad managed to m isappropriate railway consignm ents w orth several thousands of rupees. The Prim e M inister’s Secretariat forw arded the anonym ous letter to the M inister for Railways who ordered an investigation. T he case was entrusted to the Special Police Establishm ent. Once the case was with the S.P.E., the C ID Officer, w ho was a relation of the Claims Inspector, was able to cook up a case of cheating implicating M r M odi and several officers o f M odi mills including the A ccountant an d the Secretary. The officer of the mills dealing with the railways was forced by the police to side with them under th reat an d preparations for a large num ber of fake witnesses were also made. Thereafter, a request was m ade to the U nion G overnm ent th at since the person in­ volved in the racket happened to be a very influential industria­ list o f N orthern India, som e judge from M adhya Pradesh should be asked to hear the case. E laborate preparations were made to cook up a false case, an d for its prosecution. The simple fact, which cam e to light only later, was th a t in 1947, when the country was passing thro u g h a state o f turm oil, a large num ber o f wagons carrying coal to destinations in West Punjab were detained by the railw ay officials a t D elhi and to avoid congestion at Delhi mill owners in adjoining states were requested to take some o f these wagons over to their sidings. Some wagons, in this way, were despatched to M o d in ag ar and incidentally some wagons carrying pipes, stone, an d salt also came to be diverted to M odinagar along with the wagons loaded with coal.

Consignments w orth roughly Rs. 1,50,000 were in

62 this way diverted to M odinagar.

Similarly, due to the confu足

sion, consignm ents w orth nearly Rs. 2,50,000 belonging to the M odis were diverted to unknow n destinations instead o f being transported to M odinagar. These m atters were sorted o u t with the help o f the railway officials. D elhi police was then able to detect the alleged racket. M r. Modi was extremely worried over the case. He a p p ro a 足 ched the then M inister for Home Affairs, Dr. K ailash N ath K atju , and the M inister for Railways, Mr. Iyengar, an d requested th a t proper investigations should be m ade before prosecution was launched, for M r. M odi was o f the view th at the case, if launched, would tak e at least ten years to decide and th a t this period would be sufficient to damage the established rep u tatio n o f the firm. Secondly, in the prevailing conditions then, no ju d g e would be p re p are d to exonerate even a n innocent capita list for fear th at he m ight be accused o f having accepted bribes. T he Hom e M inister explained th at while the G overnm ent shared the views o f M r. M odi, they were helpless. They knew th a t th e case was baseless, b u t they were no t prep ared to order its withdraw al for the sim ple reason that they, too, m ight be accused. M r. M odi was to ld th at in the prevailing atm osphere even persons in high offices who were under co n stan t public gaze could not w ithdraw the case. Ultimately, M r. M odi took the m atter to the U nion C abinet. T he Cabinet sought the opinion of the A dvocate G eneral, the A tto rn ey General, and the M inister for Law. On the strength o f their advice and also after a thorough exam ination o f the case, the G overnm ent finally came to the conclusion th a t the case ag ain st the M odis was false and that no prosecution should be launched in the m atter. In 1952 the G overnm ent at the Centre decided to im plem ent its program m e o f abolition o f Zamindari. This historic step tow ards reform in th e field o f agriculture was announced on 1st. July 1952.

It was at th at time that the Prim e M inister M r.

63 Jaw aharlal N ehru paid a second visit to M odinagar.

M r. N ehru

had visited M odinagar in his capacity as a leader o f the N ational M ovement in the country and now he was visiting the tow n in his capacity as the Prime M inister o f independent India. Mr. Nehru was accorded a rousing reception by M r. M odi and the people o f the town. A m am m oth gathering including students, workers an d farmers from the surrounding villages braved heavy rain to listen to the speech o f their beloved Prim e M inister in the spacious lawns o f the college at M odinagar. W hen the public meeting was over. M r. M odi requested Mr. N ehru to accept his invitation for a cup o f tea at his residence. The members o f the D istrict Congress C om m ittee were against accepting this type o f invitation from a capitalist. M r. Modi explained th a t in the past also M r. N ehru h ad h o n o u red him by accepting his courtesy and there was no reason why a sim ilar opportunity should be denied to him this time. M r. N ehru was listening to the discussions o n this issue betw een M r. M odi and the Congress leaders. He turned to M r. M odi with a smile and said, “ If you w ant to invite Jaw aharlal N ehru, a n d not the Prime M inister, I will be glad to accept the invitation.” U lti­ mately, it was agreed th at the tea m ight be arranged at the M urad N agar Rest House which was away from public gaze and also a quiet and lonely spot. Only a lim ited num ber o f persons— Mr. N ehru, Mr. Lai B ahadur Shastri, M r. K rish n a C handra Sharma, M .P., M r. G ujarm al M odi and his younger brother, Mr. K edar N a th M odi—were present on the occasion. At the Rest H ouse which overlooked the G an g a canal and was situated am idst beautiful natural sourrounding, M r. Mr. N ehru and M r. M odi exchanged ideas over a cup o f tea. Mr. N ehru is believed to have pointed th at the C ongress party was against capitalist interests and was com m itted to the early abolition o f capitalism .

He w arned th a t the big industries in

the country m ight be nationalised any time and was surprised why in the face o f such a threat capitalists were always eager to


extend a warm w elcom e to him instead o f being disappoin­ ted at his an ti-cap italist policies and program m es. He also w ondered why the capitalists continued to expand their indus­ tries every year in the fa ce o f a genuine fear th at all these indus­ tries m ight be nationalised one day. M r. M odi replied t o these queries in his own characteristic way. He said, “ Y ou cannot claim to have fought big battles n o r can you claim to b e the m ost learned person in the country. Still if the com m on p eople are prepared to brave the scorching sun and wait for h o u rs in order to have a glimpse o f you, it is because you have p erfo rm ed really good deeds (Karmas) in y o u r p ast life. In t h e same way it m ust be because o f good deeds perform ed by m e in past life that even th o u g h I have n o t received very h ig h education and even th o u g h I do no t possess any special qualities, G od has always fulfilled my wishes,” Mr. M odi added. T he year 1952 w as no less difficult for M r. M odi. F ro st had destroyed the sugarcane crop and at the end o f M arch-A pril w hen the gro u ndnut crop was ready, there was a large accum u­ lation o f stocks w ith the mill owners, and the speculators entered the m arket to c re a te conditions o f slump. W hen M r. M odi reached Bombay fro m N asik he was inform ed th a t oil prices in the m arket had crash ed and continued to register a steep fall. The prices o f g ro u n d n u t oil fell from Rs. 70 to Rs. 40 per maund (37.1 Kg) The n ex t day M r. M odi got the news th a t there had been a further fall in the prices of oils. T here was also a fall in the prices of m etals, cotton and some other item s. W ith the result several established firms had to close dow n.

M any

factories were fo rc e d to close down and the banks were worried. The econom ic c o n d itio n o f the mills deteriorated to such an extent th at the m an ag in g agents had to agree to forego their their com m ission a n d the employees, too, h ad to accept a cut in their salaries in o rd e r to keep the industry going. A n oil mill o f M r. M odi at R ajpura registered heavy losses.

65 In view o f th e ad v erse fin an cial condition o f the industries, a m eeting o f th e B o ard o f D irectors was called. Some o f the directors w ere re p o rte d ly o f the view th at if oil did n o t sell, M r. M odi sh o u ld sell g o ld a n d silver in order to cover the risk. However, th e general o p in io n at the m eeting was th a t the situation sh o u ld be w a tc h e d fo r some m ore time. Luckily, conditions in th e m a rk e t started im proving after a few days and the result w as th a t th e losses became less heavy. M r. M o d i h a d p u rc h a s e d a big plot o f land on N ajafg arh R oad in D elhi in th e y e a r 1945. H e w anted to establish one vanaspati u n it a n d o n e textile unit there. He h ad purchased this land a t 50 paise p e r sq. yard, but the m arket price h ad now gone up to R s. 6 p er sq . y ard , M r. M odi sold this lan d at the m arket price as also h is oxygen gas plant in ord er to face the slump. T he financial crisis which he had to face along w ith other difficulties in 1952 convinced him th a t it was absolutely necessary to m a in ta in a reserve fund to ensure industrial stability. All the con cern s o f M r. M o d i h ad a sm ooth ru n during 1953. T he losses su stain ed d u rin g the previous year were wiped o u t an d some p ro fit w as also made. In 1954 M r. M o d i w as elected M em ber o f the Executive C om m ittee o f th e F e d e ra tio n o f Indian C ham bers of C om m erce an d Industry a n d w as n o m in ated adviser to the C onsultative C om m ittee o f th e R ailw ay s. H e was also elected F inancial Adviser to R o o rk e e U n iv ersity the same year. M r. M o d i set u p a n O xygen G as Plant in the year 1954 an d also purch ased o n e tu b e w e ll com pany owned b y a British firm. The com pany h a d a c a p ita l o f Rs. 10 m illion, but M r. M odi was able to n eg o tiate a n d purchase it for Rs. 1.2 m illion. H e handed over th e m a n a g e m e n t o f the concern to his eldest sonin-law M r. Ja y a n ti P ra s a d Agarwal and his brothers who be足 came p artn ers in th e firm . In 1955 a big colony consisting o f 360 tenem ents k n o w n as H a rm u k h Puri was constructed. On 11th O c to b e r 1956 M r. G ovind Ballabh P an t visited M odi

66 Nagar to inaugurate the M odi Silk Factory. It was drizzling when M r. P ant arrived at M odinagar. B ut on the night which followed, there was a heavy d o w npour and it was estim ated th at M odinagar registered a record 20 inches o f rainfall. The tow nship o f M odinagar was nearly 4 ft. u n d e r water. The rain water entered the premises of the cotton mill an d the silk mill and dam aged costly m achinery and finished piece-goods. Dye stuffs and other m aterials used in th e mills got m ixed with the rain-w ater and were washed away. Similarly, huge quantities o f the finished product o f the sugar mill were lost in the rain water. There was panic all around a n d it looked as if it would be impossible to save the town. T h e railw ay line also gave way at several places and thus com m unication between Delhi and M odinagar was dislocated. Inside the tow n arm y m otor boats h ad to be pressed into service to ru sh ratio n s and other supplies to the m arooned people. E xperts advised th a t a five feet high protective bund should be built aro u n d the cotton textile mills. This was done and a ro a d was also constructed in o rder to strengthen the bund. L ater, residential quarters were also constructed on the o u tsk irts o f the factory. It to o k two full days to clear o u t accum ulated ra in water. On the third day th e weather was clea r an d there was no sign o f reflooding. Yet suddenly the flood w aters flowed into the tow n once again. Enquiries revealed th a t there h a d been excessive rainfall in H aridw ar and its adjoining area which had raised the water level o f the G anga. W ater level in the G anga C anal also became high and it was feared th a t areas in B ulandshahar m ight get subm erged in the ra in w aters. In order to save these areas, the irrigation canal n e a r N iw ari Village, about 5 Km s from M odinagar, was opened to stop entry o f ra in w ater into the canal. All this w ater accu m u lated in the K ad arab ad N ullah. The railw ay under-bridges in the areas were n o t wide enough to perm it a sm ooth flow o f th e flood w aters and caused heavy dam ages. It became im perative th a t the two railway

67 under-bridges and three road under-bridges along the H apurM odinagar ro a d should be widened sufficiently to allow the sm ooth flow o f flood-water. The governm ent allowed these projects to be undertaken. In spite o f all these nature-calam ities M r. M odi did n o t lose courage. He faced these odds bravely. While he helped and cooperated with the governmental machinery in its long and short term protective measures, he was seen helping the p o o r and misery-stricken people. In the knee-deep flood waters he moved from door to door distributing rations to the hungry, clothes to the needy and medicines to the indisposed. His nam e h ad become synonymous with hope and cheer. A w ord o f encouragem ent from him acted as a healing balm to those affec­ ted by the floods. A nother textile unit was planned to be set up in 1956 at a cost of Rs. 3.85 million. Capital for the mill was arranged through the issue o f shares. The same year M r. M usaddi Lai, a director in the M odi concerns, was compelled by deteriorating financial circumstances to dispose o f his shares in the Com pany. In 1957 a degree college was established at M odinagar. Its fo u n ­ dation stone was laid on 11th M ay 1957. On G ovardhan Puja day, the 23th October 1957 R ai B ahadur M ultanim al M odi, G ujarm al M odi’s beloved father, breathed his last. He was born on 21st October 1875 and died at the age o f 82 years. H e was a religious and G od-fearing person and had lived m ost of his life at Patiala. Mr. M odi would seek the blessings o f his father while em barking on any new project. It was on his advice that Mr. M odi dropped the idea o f purchasing a wire-drawing factory at Patiala. It appears th at the father had some intuition ab o u t his a p ­ proaching death. One day he called his son and told him th at he had faith that he would be able to carry o u t his three m ost ardent wishes. He w anted him to take pro p er care o f his m other, keep all the brothers happy and contended, and

68 lastly safeguard the assets o f the family. On the night before his death, Rai B ahadur M ultanim al was in fairly good health for his age. He was put in a chair and carried to his shop where the fam ily w orshipped Lakshm i, the Goddess o f W ealth. N ext m orning, having finished the usual m orning chores, he took his breakfast and suddenly died. The last rites were perform ed a t his Ashram situated outside the city. A big temple was later constructed there in his memory and a Sanskrit College was also established. In the early years after Independence there were rum ours that the new socialist G overnm ent m ight nationalise all big indus­ tries. The younger brother, M r. K edar N a th M odi, one day suggested that the M odi family m ight go in fo r m edium and small size industries in keeping w ith the socialistic thinking. Just then Ganesh F lo u r M ills in D elhi was gutted by fire and the then U nion M inister fo r F o o d suggested th at the M odis might also set up a big flour mill in D elhi. The idea was tempting. A fter prelim inary negotiations, orders for the flour mill m achinery were placed w ith a firm in Czechoslovakia in early 1957. Sim ultaneously, a search for a suitable site for the factory was made. At long last a site in Olchla was selected, but this land could be acquired only after prolonged efforts. In April, 1957 a new spinning unit with 28,000 spindles was set up at a cost of Rs. 3.85 m illion. This mill cam e to be known as ‘B’ mill. A new acetylene gas factory also was set up. The next year was an otherw ise ordinary year for the M odi concerns except in the case o f the textile mill where an atm osphere o f unrest was brewing. F loods in the p ast two years had dam aged costly m achinery in the factory and this had resulted in a loss in production and the w orkers o f the factory were not getting the usual am ount o f bonus. The w orkers, therefore, went on a strike which continued for 20 days. The leaders of the striking employees adopted all sorts o f tactics to brow -beat the management.

One w orker was m ade to lie down on the

69 r o a d a n d the news was spread th at he had died as a result o f the in ju rie s received during a police lathi-charge. This led to a f u r th e r flare-up am ong the workers. One D eputy Superinten­ d e n t o f Police also reportedly joined hands with the workers a n d began to incite them. A t this juncture Mr. Gyan Prakash, t h e D istrict M agistrate o f M eerut, intervened to tackle the s itu a tio n . He went to the place where the ‘dead’ w orker lay o n th e road and kicked the ‘body’. Immediately the worker, w h o w as supposed to be dead, got up and started crying. This d e f t h an dling o f the situation by the D istrict M agistrate saved i t fro m deteriorating further. However, the leaders continued t o incite the workers by raising all sorts o f false bogies. O n e im p o rtant factor which came to light during this strike w a s th a t the leaders o f the striking workers would not allow t h e m anagem ent to have a direct dialogue with the workers. T h e G overnm ent officials, too, advised th at the m anagem ent s h o u ld n o t bypass the leaders and have a direct dialogue with th e w orkers. It was feared th at the agitated workers m ight in s u lt th e officials o f the managem ent. P ro h ib ito ry orders under section 144 o f the Indian Penal C o d e h ad been im posed in M odinagar town. All meetings of th e em ployees began to be held outside the town. M r M odi s e n t his officials to one o f the meetings o f the striking em plo­ yees. The m anagem ent tried to convince the workers th at they w e re being misled by elem ents with vested interests from outside th e tow n. In com plete disregard o f the advice given by the p o lice an d the authorities M r. M odi himself went to the m eet­ in g s an d calmly advised the workers th at if they had any com ­ p la in ts, they were free to come to him personally for redress. T h is bold approach adopted by M r. M odi had the desired effect f o r it rem oved m any m isunderstandings between the workers a n d th e m anagem ent. A deteriorating labour situation was th u s brought under control. His dynamic approach brought h im success in m any sim ilar situations.

70 The new flour mill at O khla in New D elhi was inaugurated on 14th May, 1959. In the same year it was decided to start p ro ­ duction o f finer varieties o f cloth in the textile mill as these were found to be m ore profitable than the coarse and medium varie­ ties m anufactured there so far. M r. K edar N ath M odi and M r. K rishna K um ar M odi u ndertook a 25 day tour of Switzerland, Italy, Germ any a n d o ther E uropean countries to explore the possibilities of purchasing the latest type o f textile machinery from these countries. The sam e year a new distillery was also established to m anufacture pow er alcohol. M odi’s Prefect S oap h ad been doing very well in the m arket. In the initial stages som e difficulty was experienced in prom o­ ting its sales because the M odis could no t afford to spend huge am ounts o f money on prom otional publicity and the traders were interested in selling only the established brands o f toilet soaps. Therefore, the com pany’s own salesmen had to be engaged to create initial dem and for the soap. L ater on, due to its better quality, the dem and for the soap picked up and the traders and shop-keepers too began to show interest in its sale. The m echanism o f price-controls, which did not apply to M odi soaps, also helped in pushing up their sales. How ­ ever, during W orld W ar II, the G overnm ent pu t a ban on the im port o f the perfum e which was used in the m anufacture of the Prefect toilet soap. This had a serious effect on the quality, Sometime later there was an o th er serious developm ent which forced M odis and several other big m anufacturers o f toilet soaps to discontinue the p ro d u c tio n of toilet soaps. Lever Brothers and some other foreign firms m anufacturing soaps in India decided to create m onopoly conditions fo r their toilet soaps by resorting to the technique o f heavily under-selling their product. This process continued to such an extent th a t it became imposible for other m anufacturers to get back even the cost o f the oil used by them. Levers was an in tern atio n al com pany doing business in

71 several countries. It could afford to sustain itself even after heavily undercutting the prices o f their toilet soaps a n d even after spending huge am ounts o f money on p ro m o tio n a l publicity. A bout 300 Indian concerns which were at the tim e engaged in the m anufacture o f toilet soaps started closing d o w n o n e after the other in the face of heavy and unequal c o m p e titio n thus offered by the Levers, and only Tatas and Levers w ere left in the m arket. Both these firms used to spend th o u san d s o f ru p ees on prom otional publicity of their products. A fter W ar, th e Levers set up a big toilet soap factory at C alcutta an d , T a ta s, too, established another factory at G haziabad in o rd e r to p u sh the sales o f their products in N orthern India a n d m ake th e ir soaps more competitive in com parison to Levers’ p ro d u c ts. The T atas adopted one m ore technique in order to su stain them selves in the com petition with Levers. They w ould supply their bleaching powder only to those dealers w ho ag reed to p lace orders for their toilet products. Since the bleaching p o w d e r had a better m argin o f profit, this inducem ent helped to p u sh up the sales of their toilet soaps. A m ong the num erous toilet soap factories w hich closed down in the face o f the cut-throat com petition fro m Levers were those established by Birlas, T hapars a n d L ala S hri R am . M odis, too, had to close down their toilet so ap u n it, b u t they continued to m anufacture washing soap. The distillery set up by M r. M odi was in a u g u ra te d by M r. M anubhai Shah, the theu, M inister for Industries, o n 10th Jan u ary 1960. While inaugurating the factory, M r. S h ah exhorted M r. M odi to go in for the production o f acetate y a rn b ased on chemicals and alcohol. M odis realised th a t m an -m a d e fibres had a bright future and from that very day they s ta rte d looking for a suitable scheme for the m anufacture o f sy n th etic yarn. In 1960, the G overnm ent decided to establish o n e E ngineer­ ing College at K an p u r and a B oard o f G o v ern o rs consisting o f four em inent persons was set up for running th e sam e. M r. M odi

72 was appointed G o v ern o r on the board representing p u b lic in ter足 ests. In the sam e year a synthetic Silk Y a rn D evelopm ent Council was set u p by the G overnm ent and M r. M o d i was a p 足 pointed m em ber o f the Council for a p eriod o f th ree years. Again, a branch o f the N ational P roductivity C ouncil w as set up at M eerut and M r. M odi was elected its first P resident. A C entral C ustom s and Excise Advisory C o m m ittee w as set up by the G overnm ent th at year and M r. M odi w as ap p o in ted its member. The G overnm ent o f U. P. also set u p a B o ard o f Technical E d u cation in the State o f which M odi becam e a nom i足 nated m em ber representing industrial establishm ents. H e was also appointed a m em ber and later V ice-President o f the B oard o f Directors o f the Reserve B ank o f N o rth e rn In d ia. On 16 July 1961 M r. M odi decided to g o on a to u r to foreign countries which lasted ab o u t fifty days. M any o f his bro th ers and other relations had been abroad, but this w as fo r th e first time th at this self-m ade industrialist decided to u n d e rta k e a foreign to u r himself. D uring the past 40 years o f h is industrial career, on several occasions he had planned to go a b ro a d , but each tim e he had to d ro p the idea on the advice o f his father. On his first to u r abroad, M r. M odi was acco m p an ied by his wife, younger b ro th er M r. K edar N a th M odi an d his sister-inlaw. They visited several countries and places in clu d in g R om e, M ilan, Zurich, F rance, W est G erm any, Sweden, E n g lan d , New Y ork and W ashington. O n his 60th birthday, M r. M o d i was in England. Being a religious m an, he w anted to celeb rate it in a place o f worship a n d therefore he w ent to a ch u rch in L ondon. Then, passing th ro u g h San Francisco, H o nolulu, T o k y o an d Hongkong, M r. M o d i returned to India o n 5 S ep tem b er 1961. The first foreign to u r o f M r. M odi was educative and full o f varied experiences. The first thing th a t he learn t w as th a t it was very difficult fo r a vegetarian to find a variety o f fo o d s to eat in these countries. T h roughout his to u r ab ro ad , M r.M o d i had to live on m ilk and fruits. Only a t far off places in L o ndon,

AIR -iNbu

Shri G ujarm al M odi & Shrim ati M odi with his brother Shri K. N. Modi and his wife a t the airp o rt a t the tim e of their departure to Foreign Countries,

73 Japan and a t a few places in A m erica, he could get satisfactory vegetarian food. B ut in H ongkong he found that he had no difficulty in getting In d ian meals. On account o f his strict vegetarianism the tour had an adverse effect o n his health. He felt fatigued and developed a swelling in one knee-joint. The medicines which were given for the treatm ent o f the swelling did not suit him and he deve足 loped an ulcer in his liver. This becam e rather serious. Even till 4 D ecem ber 1961, w hen M r. K rish n a K um ar Modi, his eldest son, was m arried, M r. M odi continued to suffer from the effects o f the knee-joint swelling. H e was cured only after 4 to 5 m onths of treatm ent b u t the swelling had even then not altogether dis足 appeared. It left a p erm anent m ark on him. He was advised not to take baths w ith cold w ater an d he was prevented from going on pilgrim age to the hill areas. In 1961 a to rch factory was set up and machines for the arc electrodes factory were im ported from East Germany. The same year M r. M odi was elected President of Indian Sugar Mills A ssociation. H e also visited K ulu, M anali, Jwalaji. On his retu rn jo u rn ey from these places, he stayed with the R aja o f M andi. H e was treated by the royal family as a guest o f honour. In A pril 1961 M r. M odi presided over the annual conference o f the M echanical Engineers o f India at Bombay. In the veryfirst y ea r the arc-electrodes factory yielded enough profit to cover the initial expenditure incurred in setting up the factory. W o rk on the setting up o f a Steel factory was taken in hand th a t year. A scheme was also prepared to set up the fourth textile u n it a t an estim ated cost of Rs. 25 million. M a足 chinery for the steel furnace, rolling mill and the wire-drawing plant was ordered. A co tto n delinting factory was also set up at A bohar in P u n jab at a co st o f R s. 1.45 million. A t the same time w ork on the setting u p o f a new distillery at Jagadhri was taken u p at an estim ated co st o f Rs. 3 million.

C h apter Eight


T he year 1963 m arks the beginning o f a period o f pre-eminence in the life o f M r. M odi. By this time he had established a chain o f industries a t M odinagar after getting over all kinds of teething troubles a n d crises. He had also built up a consider足 able rep u ta tio n w ith the G overnm ent and the public by virtue o f his rem arkable business acum en and entrepreneurial ability. He h a d established him self as a great industrialist with a large vision an d a dynam ic outlook. F rom now onwards, M r. Modi received h onour a fte r honour from both the Governm ent and the p u b lic in recognition o f his services to the people and the in d u stry in the country. Besides, he continued to expand his in d u strial capital a t M odinagar. It is in the fitness o f things th a t th is period o f g lory began with the opening o f Laxmi N arayan Tem ple constructed in the heart o f M odinagar. The conse足 c ratio n o f the idols installed in the temple was performed by his Guru K rishnashram ji M aharaj on 3rd Feb. 1963 who came dow n fro m his ashram in the Himalayas especially for this purpose. T he steel factory a t M odinagar was inaugurated on 25 Janu足 ary 1964. The fa cto ry was set up at a cost of Rs. 10 million. In the sam e year a big pilgrim G uest Home was constructed at V rin d ab an in U tta r Pradesh. On lo th January 1965, the founda足 tio n -sto n e o f a m ost m odern thread mill was laid and the electric fu rn ace o f the steel mill a t M odinagar was inaugurated. In the sam e y ear a public library was set up at M ahendra Garh. It

| sw Shri G ujarm al M odi with his G uru 1008 Swami K rishnashram J i M ah araj, riding on the elephant in a procession a t the tim e of installation ceremony of Shri L akshm i N arayan Tem ple, M odi N agar.

76 lise the negotiations. They were highly im pressed by 'the p ro ­ gress m ade by the tow n in 32 years. They were also surprised to find th at children o f the M odi family were studying in the same com m on school in which children o f the workers were studying. One o f them is rep o rted to have rem arked th at this was th e best way to fight com m unism . The Am erican firm w anted the new factory to be established at Bombay. But M r. M odi was u n ­ willing to shift to Bom bay. Therefore, it was finally agreed to set up the factory a t M odinagar. A large plot o f 585, 288 sq. m eters o f land was acquired for the factory. In the sam e year M r. M odi was nom inated m em ber o f the N atio n al P roductivity Council and as such m ade several im p o r­ ta n t suggestions to im prove productivity in a num ber o f indus­ tries. In A ugust 1965 he went on a pilgrimage to A m arn ath and o th er holy places, an d by the time the family returned from K ashm ir, the w ar between India and Pakistan h ad broken o u t and one could see In d ian armies moving along alm ost all the im p o rtan t hill routes in the K ashm ir Valley. A t S rinagar M r. M odi announced a donation of Rs. 50,000 to the D efence o f In d ia F u n d as his contribution to the war effort. The d o n atio n was accepted by M r. Lai B ahadur Shastri, the then Prim e M inister o f India on 6th N ovem ber 1965. The year 1966 was an eventful one both for M r. M odi a n d the country. O n a political scene, the reigns o f the U nion G overn­ m ent were tak en over by Prim e M inister Indira G andhi after the sad demise o f M r. L ai B ahadur Shastri at T ashkent in Soviet U nion. The M odi family, too, had its share o f bereavem ents. M r. Salig R am , one o f the close relations o f M r. M odi, died o f h eart failure at H ap u r. His younger brother also lost his wife th at year. M r. Salig R am was M r. M odi’s close friend w ith w hom he could talk w ith a n open heart and unreservedly. H e was his com panion w ith w hom he shared his weal and woe. N aturally his passing aw ay left a void in his life. In April, the sam e year,


was inaugurated by M r. R am K ishan, the then C hief M inister of Punjab, on 1st M arch, 1965. In the sam e m o n th the foundation stone o f a temple consecrated to G oddess D u rg a was laid at Shukratal in D istrict M uzaffarnagar. On 7th September 1965 it was finally decided to establish a new company under the nam e o f M o dipon to produce nylon yarn a t M odinagar in collaboration w ith an A m erican firm. M/s. Rohm and Hass agreed to contribute 40 per cent o f the share capital in the form o f foreign exchange. M r. M odi was appoin­ ted Chairm an and Mr. K edar N a th M odi an d M r. K rishna K um ar Modi, his younger b ro th er an d eldest son respectively, were appointed President an d V ice-President o f the new Com pany. Dr. Murphy, the C hairm an o f the collaborating American firm came to India to finalise the agreem ent. W hile at M odi­ nagar, Mr. M odi asked D r. M urphy : “ W hat is it th at has attracted you to agree to invest so m uch m oney in the new firm even though we are no t know n to each o th e r? ” D r. M urphy replied that while talking to M r. M odi, he w as hypnotised and charmed by the simplicity and high ch aracter o f the members o f the M odi family. The A m erican co llab o rato rs were indeed surprised when in Paris the previous year they noticed th a t both Mr. K edar N ath M odi and M r. K rishna K u m a r M odi had abs­ tained from drinks and all types o f sexual indulgence or enter­ tainm ent so com m on in w estern countries. The American firm w anted M r. M odi to go to Am erica to finalise the deal fo r the new venture. B ut he declined the in­ vitation on grounds o f health. H e received tw o m ore invita­ tions to go to the U nited States. O ne o f these was to negotiate a deal for the export o f sugar from In d ia as President o f the Sugar Mills Association and the o th er was to preside over the L abour Conference at San Francisco. B oth these invitations were also declined by him on medical advice. The American collaborators, therefore, decided to com e over to India to fina-

Shri G ujarm a! Modi in discussion with Shri M orarji Desai a t the F IC C I Session in 1967.


M r. M odi had the opportunity to preside o v e r the 33rd conven­ tion o f the Industrial E m ployers’ O rg a n is a tio n at Vigyan B havan in New Delhi. An event o f great h o n o u r an d h is to ric significance cam e in M arch 1967 when the corner stone o f M odip o n , one m ore im portant venture o f the M odi fam ily w a s laid on 12 M arch 1967. This was the m ost prestigious v e n tu re undertaken by the M odis in collaboration with a n A m e ric a n firm m ost reputed in the field o f Nylon yarn. A m am m o th co n g re g a tio n o f invitees assembled a t M odinagar and the in a u g u ra tio n cerem ony was perform ed by the renow ned A m erican in d u s tria lis t D r F . C. Hass, Head o f the collaborating A m eric an firm. The same day a nine feet high statu e o f R a i B ahadur M ultani m al M odi, father of M r. G ujarm al M odi, w a s unveiled in the p ark adjoining the college. This was an o th er m em o rab le day in the life o f this industrial town. H igh d ig n ita rie s present at the u n ­ veiling ceremony included H igh C o u rt J u d g e s , several political leaders and the M aharani o f P atiala. A t t h e unveiling cerem ony, glowing tributes were paid to the m e m o ry o f the R ai B ahadur M ultanim al for the services ren d ered by h i m to the people. There were yet m ore honours in sto re fo r G ujarm al M odi. One such occasion cam e w hen he w as n o m in a te d a m em ber of the Export and Im p o rt A dvisory C ouncil a n d also o f the In d ian Exports Organisation. H e was also n o m in a te d a m em ber o f the Senate o f the M eerut U niversity in re c o g n itio n o f the invaluable services rendered by him to the cause o f ed u c a tio n . The year 1968 was the m ost m e m o ra b le in his life. H e was then holding the post o f the P resid en t of t h e Federation o f Indian Cham bers o f Com m erce and In d u stry . T h e po p u lar G overn­ m ent of the day m ade an assessm ent o f th e valuable contribution m ade by M r. M odi to the developm ent o f the country a n d in recognition o f the services ren d ered by h i m to the nation, the U nion G overnm ent decided to co n fer the c o v e te d aw ard o f P adm a Bhushan on him.

78 The announcem ent o f the d e c o ra tio n w as greeted with a p ­ plause by the industry and th e leaders o f public opinion. T h o u s ­ ands o f greetings a n d co n g ratu lato ry m essages poured into M o d i ­ nagar. The industrialists o f C a lc u tta arranged a big p u b lic reception in his h onour, a t w hich M r . D h aram Vira, the t h e n G overnor o f W est Bengal, presided. This was followed b y a public reception at D elhi u n d er the C h airm an sh ip o f M r. F a k h ruddin Ali Ahm ed w ho was th en th e U n io n M inister for In d u s try and C om pany Affairs. T he D elhi re c e p tio n was attended b y over 2,000 im p o rtan t personalities in clu d in g M inisters, M e m b e rs o f Parliam ent, representatives o f th e diplom atic corps, and t h e business com m unity. G low ing trib u te s were paid to M r. M o d i for the yeom an’s service rendered by h im to the cause o f in d u stry . On behalf o f the citizens o f D elhi, M r. B alraj K hanna, t h e n Deputy M ayor of Delhi, p resen ted a n ivory A shoka Pillar t o him. The Punjab, H a ry a n a a n d D e lh i C ham bers o f C o m m e rce and the H industan M erchants A sso c ia tio n also arranged p u b lic receptions in his honour. T he N a tio n a l A w ard o f P adm a B h u shan was m ade to M r. M odi on 7 A p ril, 1968. The c ita tio n accom panying the aw ard lauded his achievem ents and c o n trib u ­ tions in the fieds o f industry, social service an d education. I t read : “ Shri G ujarm al M odi (65), the m o v in g spirit behind the la rg e industrial com plex o f M o d in a g a r is the founder o f the i n ­ dustrial tow nship o f M o d in ag ar. I t is due to his v isio n , foresight a n d drive th a t th e to w n sh ip w ith m ore th an a score o f factories has em erged o u t o f the wilderness of B e ­ gum abad. Shri M odi m ade su b sta n tia l contribution i n rehabilitating displaced p erso n s b y constructing G o v in d P uri C olony consisting o f 5,000 h o u se s and 25 sm all s c a le industries. All those persons w h o were rehabilitated i n M odinagar were given e m p lo y m e n t either in M odi E n te r­ prises o r in sm all scale industries b u ilt in the Colony.

Shri Gujarmal M odi b e i n g Dr.

a w a r d e d “ P A D M A B H U S H A N ” by the President of In d ia, Z a k i r H u s s a i n , on 1 6 th A pril 1968

79 F o r the benefit o f the workers at M odinagar and people o f neighbouring villages he has established a full fledged P ost-G rad u ate College, two Intermediate colleges, one J u ­ nior H igh School, a W omen’s Training College and a chain o f P rim ary Schools which are providing education to 8,000 students. H e has also established a num ber o f charitable trusts and has constructed Dharam shalas a t various centres o f Pilgrimage. S hri M odi has rendered im mense service in prom oting social welfare with the zeal of an industrialists.” The coveted aw ard was followed by m ore honours. In April 1968, a public reception was arranged in his h o n o u r by the citi­ zens o f Bom bay. H e was nominated C hairm an o f the In ter­ national A rbitration Council and his services were co-opted for various governm ental bodies including the Planning C om ­ mission, the C entral Excise Advisory Board, and the U tta r Pradesh Planning Board. In July 1968 the G overnor o f U ttar Pradesh convened a m eeting to discuss the cause of widespread poverty in the state. In th at m eeting M r. M odi gave a very clear and forthright analy­ sis o f how the per cap ita income in U. P. had gone dow n as com pared to the all In d ia average and how the system o f salestax and pow er tariffs as devised by the State G overnm ent were w orking to the detrim ent o f industrial developm ent and h ad led to the m igration o f industries to other States. This clear analysis was widely appreciated by those present a t the meeting. In O ctober 1968 M r. M odi presided over the m eeting o f the F ed eratio n o f Indian Cham bers of Commerce and Industry at K anpur, the industrial tow n of U ttar Pradesh. The last achievem ent o f Mr. Modi in the industrial field was the setting up o f an autom obile tyre and tube factory under the nam e o f M odi R ubber Ltd. in technical collaboration w ith C ontinental G um m i W erke A. G. H annover, W est G erm any, the world fam ous m anufacturers o f tyres and tubes.

It was

80 formally inaugurated by M r. F ak h ru d d in A li A hm ed, the then President o f India, at M odipuram , an o th er tow n founded by him. 9 lcms beyond M eerut. It is now fast developing as a model town. The plant covers 70 acres o f land an d incorporates the m ost m odern and sophisticated m achinery an d W est G erm an technology to ensure the production o f quality tyres best suited to Indian road conditions. It has a licensed pro d u ctio n capacity o f 400,000 units annually. It has been designed to process 16,000 tons o f rubber com pound into tyres and tubes p er annum . On achieving its full rated capacity the p lan t will con足 tribute Rs. 220 million per year to the C entral Exchequer and will provide employm ent to 3,000 persons. It is a n im p o rtan t land足 m ark in the economic growth o f U. P. and th a t o f the country. It will help resolve the transportation bottleneck in the country caused by immense shortage o f tyres. Towards the end o f the year M r. M odi received a delegation of Japanese businessmen. This provided him an opportunity o f exchanging ideas on the developm ent o f industries in India. In December, he m et M r. R obert M cN am ara, C hairm an o f the W orld Bank, when he had another oppo rtu n ity to discuss how other countries could extend their cooperation to the develop足 m ent o f industries in India. Exchange o f ideas on industrial grow th continued a t the international level when he attended the deliberations o f the International Investm ent Seminar. These deliberations a t national and in ternational levels provided him with excellent opportunities to express his opinion on num erous problem s of industrial developm ent in the country.

S h ri G u j a r m a l M odi and S h ri Fakhruddin A!i A hm ed a t th e M u ltan im al M odi P o s t G ra d u ate C ollege C onv o catio n in 1968.

C hapter N ine


A fter 1972 M r. M odi became m ore and m ore interested in social Welfare activities and religious pursuits. H e was a pious m an who never touched alcohol n o r did he frequent clubs even during his trip abroad. A m an o f austere habits, he also h ad a well regulated daily routine. He regularly w ent to the Laxm i N arayan temple at M odinagar in the m orning and listened to religious discourses late in the night. H e kept fasts and havans were a routine activity in his house. Sadhus, Saints, M ullahs and Church priests always surrounded him , for they found in him a ready and willing helper o r do n o r to th eir reli­ gious projects like renovation o f ruined tem ples, m osques, gurudw aras and churches, for he believed th a t all religions were essen­ tially one. As m entioned earlier, while in L ondon, he celebrated his b irth day in a church in London and during his stay a t A jm er the next year he had visited the fam ous D argah to pray on his birthday. In fact, he believed in the synthesis o f all religions. His visits to H aridw ar and the ashramas o f the well-known Sadhus in the H im alayas became m ore freq u en t The source of his strength and inspiration was his wife, D ayawati. G entle and com passionate, she was devoted to h er husband and he on his p art was her life. In his absence she did n o t get a m om ent’s ease. She regarded him as the bestow er o f bliss and one who dispelled her distress and sorrows. She spent m ost o f her time looking after him and the family, and after his death she became absorbed in social welfare activities o r satsang, H u m ­

82 ble and affectionate, Dayawati M odi literally w orshipped and adored her husband. They both seemed to understand each other perfectly a n d Mr. M odi’s devotion to her was also complete. He regarded h er as Laxmi, for since she h ad com e to his family, business had prospered. He was a doting husband and was m ost conscious o f his duty to her. H e was always seen with her not only in his evening walks a t K rishna Ashram, b u t also at every social function at M odinagar and elsewhere. If, he could not atten d a function owing to certain unavoidable reasons, he w ould send his wife to attend it. In fact, he trained the simple unsophisticated girl o f 17 to take her place am ong the leading w om en of his com m unity. M other o f 11 children, with a large household to look after, the P resident o f a chain o f prim ary and m iddle schools a t M odinagar and in the neigh­ bouring villages and of charitable institutions like M ahila Samaj K alyan P arishad, she is a w om an o f rem arkable qualities o f head and heart. M r. M odi delighted in m eeting people and exchanging ideas with them. He could meet and com m unicate with people o f eminence and th e dow ntrodden and needy w ith equal ease. A daily m orning w alk along the railway track was p a rt o f his routine. While th e officials o f M odi Enterprises m et him at appointed places, the needy and the m iserable w ould w ait at various spots to g et an opportunity to talk to him. Seeing them he always stopped and talked to them . H e also helped them if he found that th e ir need was genuine. O ne incident will il­ lustrate this point. One m orning while w alking tow ards the railway crossing near M odipon, the railway gatem an stood before him with folded hands. H e tearfully told M r. M odi th at his daughter’s leg was fractured and he had no m oney for medical treatm ent. M r. M odi at once granted him Rs. 200. A villager with h is bullock cart laden w ith sugarcane who h ad been watching the scene from a distance, came upto him and said, “ How is it th a t you are helping this m an? He is n o t your

Shri M odi w ith his wife Sm t. D a y aw ati M odi

83 employee.” P ro m pt cam e the answer, “This m an is a resident o f M odinagar. M oreover, his need is genuine.” He was liberal in m aking donations tow ards marriages and funeral expenses of the poor and the needy. M r. M odi h ad a keen sense of hum our and could share a joke with persons o f all classes on certain occasions. A t hom e he was always relaxed. T o pass a hum orous rem ark in a light hearted vein was a h a b it with him. Once his old classm ate M aster Badri Prasad called on him after Mr. Modi h ad a heart attack. He had ju st then aw akened from his afternoon nap. The friend enquired as to w hat he h ad done to himself. He answ ered in a characteristic, frank a n d hum orous m anner th at he h ad only been carrying o u t a n experiment. W hen M asterji said th at he should n o t carry o u t such “great experim ents” , his reply was th at “ G re at persons do great experiments.” Such lively rem arks always p u n ctu ate d his conversation. M r. M odi as the head o f a family ruled over it like a patriarch, whose will dom i­ nated over one and all in his extensive household. To his subor­ dinates and servants he was both a master and a generous friend. His family always bow ed to his judgem ent knowing well th a t he would readily grant an y reasonable request. Ever since his re tu rn from his foreign tour, he h ad been ail­ ing and experiencing th e effects o f growing age. It was simply through his strong will th a t he had continued to lead a life o f intense and varied activity. However, in Decem ber 1975 all the ailm ents which he had never taken seriously m ade a concerted a t­ tack on him . F oreign doctors and specialists in India who exa­ m ined him diagnosed th a t he was suffering from jaundice and th at his kidney, lungs a n d heart were seriously affected. H e was advised to go to B om bay for medical treatm ent, but he was unwilling to leave M odinagar. A staunch believer in destiny, he felt th at th e trip a n d treatm ent would be futile, b u t his fam ily prevailed up o n him. In Bombay he was operated upon a t Jaslok H ospital.

Till the tim e o f his operation, he had been drinking

84 Gangajal, the holy water o f the river G anga, and was constantly muttering ‘K rishna K rishna.’ H e did n o t survive the operation and breathed his last with G o d ’s nam e on his lips a t 4.30 a. m. o n 2 2 n d Jan u a ry 1976. His last words were: “ Pray and have faith.” Then he slipped into blissful peace. The news o f his passing away plunged the tow n o f M odinagar into deep sorrow. His relatives, friends and employees had been praying for his recovery for weeks, bu t all in vain. People in thousands from Punjab, H aryana, R ajasthan, D elhi and U .P. went to the Palam A irport in D elhi to receive the body on its arrival by a chartered plane. Everyone o f them m ourned for him as one would for a beloved father. They rushed to the plane when it touched dow n the runw ay at 2.30 p. m. o n the same day. Unmindful of the rules and regulations o f the airp o rt authorities they all wanted to be the first to have the last glimpse o f the great man. From Palam the cortege was taken to M odinagar on a vehicle decked with flowers. It was followed by five rows of vehicles upto one mile and there was a virtual stam pede for an hour a t M odinagar. His body was taken to Shri Laxm i N arayan Temple and placed on a bier in the S ankirtan B haw an o f the temple where tens of thousands o f people h ad gathered to pay their last homage. It was a veritable ocean o f hum anity. The crem ation cerem ony began a t 7 p. m. T he sandal w ood pyre was lit by his eldest son, K rishna K um ar. A ccording to the last wishes of the R ai Bahadur, the last rites were perform ed in the premises o f the temple, which he had b uilt and which he daily visited when he was at M odinagar, as he always w anted to be near his Creator. On hearing the news, the great Saints a n d M ahatm as— Swami Vishnuasramji, Swami K rishnanand G ovindanand Ji, Jagat G uru Goswami P urushotam Ji, paid hom age and perform ed K irtan and Pravachan for the peace o f the departed soul. Shri Anandmai M a wrote to his wife:



“ I heard on the radio o f the sad news. C reation and its dis­ solution are in the h an d s o f the Almighty. G od sum m oned M odi Baba. In obedience to His Will, he left this w orld. Have patience and rem ain composed at this hour. H e has not gone anywhere. H is soul and your soul are one. He is with you in spirit. Baba built Laxmi N arayan Tem ple at M odinagar an d liked to be near his C reator. C ondolence to you and to all th e members o f M odi Fam ily. P ray.” (English rendering) M r. M o d i devoted h is life to the social and industrial advance­ m ent o f the nation. M odinagar will stand as an im perishable m onum ent to his life a n d work. It is not often th at a m an o f such stature is born. H e departed but his ideas and w ork re­ m ain as a perm anent contribution to the growth and developm ent o f India.

Chapter Ten


Mr. Gujarm al M odi struggled h a rd for the m ajor p a rt o f his life. W ith perseverence and firm determ ination he succeeded in attaining his objectives and rose to heights o f eminence. In times of crisis he never lost heart b u t w ith faith in G od and in himself fought his way through. M oreover, as he prospered in business, his hum anitarian and philanthropic zeal also increased. He was convinced th at the key to the co u n try ’s prosperity was its industry, w ithout o f course neglecting the agricultural sector. Ploughing back profits from running concerns to enlarge them or to establish new industries was a passion w ith him. He did not view his enterprises as m oney-m aking ventures but made them sources o f capital for m ore and m ore industries. He was thus able to build up a vast netw ork o f small and big industries in M odinagar, a township which he built from scratch through his sustained personal efforts. H e was o f the view that the final objectives o f the G overnm ent and the business com m u­ nity were the same. As he observed in his presidential address at the 42nd annual session o f the F ederation o f Indian Cham bers of Commerce and Industry in 1969: “ We both aim a t a faster rate o f development. We both wish the country to have a better standard o f living. We both w ant full em ploym ent fo r o u r people.” A n industrialist w ith a dynam ic and progressive outlook, Mr. M odi realised th a t harm onious relations with lab o u r were necessary for success in an industry. Long before welfare policies became an accepted norm in India, he built pucca houses for

87 workers near the places of w ork and provided educational and other facilities fo r their dependents. H e forestalled the concepts o f w orkers’ participation in m anagem ent by setting u p W orks Com m ittees in his factories as long ago as 1947. T h a t em ployees and em ployers should bilaterally sort o u t their m utual problem s w ithout involvem ent o f extraneous elements was the crux o f his outlook on industrial relations. In 1946 there was a strike in one o f the M odi mills. It lasted a fortnight w ithout a settlement in sight. M r. M odi then called a m eeting o f representatives o f the workers. A fter lis­ tening to them fo r a brief while, he dictated a note in U rd u , which was to form the basis of the settlem ent. W hen the w o r­ kers heard the contents of his aw ard they were satisfied an d readily agreed to call off the strike. M r. M odi’s w ords to them a t th a t time, though simple, are memorable. H e said : “ W e are all m em bers o f the same family and the mill is o u r hom e.” Similarly in 1956, owing to heavy losses, when there w as another strike by workers fo r higher wages and bonus, the lea­ ders o f th e strikers adopted all kinds o f tactics to brow beat the m anagem ent. They did n o t want the m anagem ent to have a direct dialogue with the workers. But M r. M odi ignored their wishes an d advice. He sent his officials to the w orkers’ m eet­ ing and later went there himself. H e calmly advised them to appro ach him directly for the redressal o f their grievances, if they had any. This bold and direct approach helped to clear m uch o f the m isunderstanding that existed between the m anage­ m ent an d the workers. He often acted as an arb itra to r a t the instance o f w orkers themselves between the w orkers and the m anagem ent and his decisions were always fair to the employees who accepted them whole-heartedly. Being an enlightend employer Mr. M odi appreciated the need for responsible trade unionism for healthy industrial relations and played a big role in establishing a R ashtriya M azdoor Sabha. But as an em ployer he believed in a personalised ap p ro ach to

labour relations. It was indeed h is policy o f regarding and treating his workers as his own to w hom h e was nearer th a n any one else which form ed the bed-rock o f happ y industrial relations at M odinagar. Invariably every year when M r. M o d i’s birthday was cele­ brated, workers held meetings a n d felicitated him. H e accepted their good wishes w ith folded h a n d s and he would announce various measures o f public welfare to show his love and concern for the workers and the inhabitants o f the tow n. F o r instance, in 1966 the workers felicitated him in the W orkers’ C lub o f the Textile mills and placed before h im the problem o f adm ission o f their wards to schools. W hile acceding to their dem and for another school he laughed and said th at they were increasing the population at such a speed th a t he h a d to open a new Ju ­ nior School every y ear to meet th e increasing educational re­ quirem ent o f their w ards. He, th e n , enjoined on them to res­ trict their families. A s a m easure o f encouragem ent he announced Rs. 100 w ith seven days leave w ith pay to the w orker who got him self sterilised. In 1967, he distributed 115 radio sets to those who w ent for V asectom y operation. Thus m uch before the G overnm ent realised th e dangers o f a population explosion and em barked upon a fam ily planning cam paign, Mr. M odi encouraged the small fam ily n o rm am ong his workers. He anticipated th at sooner or later th e G overnm ent will have to adopt it as a national program m e to tak e advantage o f the rapid strides made by India in the agricultural, industrial, scientific and economic fields. On each birthday, while M r. M o d i was at M odinagar, he used to plan t a sapling as he believed th a t the trees were the nation’s wealth. It is indeed his inexhaustible interest in treeplantation th at hundreds o f plants a r e grow n in the M odinagar colonies and lawns. H e advised th e people o f M odinagar to exercise utm ost control in the felling o f trees. H e also m ade provision for replacem ent o f old trees felled dow n. As an encou­

89 ragem ent he himself planned and planted an o rc h ard o f m ango trees at M odinagar know n as ‘Sikri B agh’ where different birds chirp and tw itter and have m ade it their hom e. In th e season the ‘B agh’ becomes a veritable nest o f singing birds. M r. M odi was also religious-m inded like his fa th e r a n d fore­ fathers. This trait in him deepened and developed as h e p ros­ pered in business. W henever he could spare tim e, he w e n t out o n a pilgrimage to perform his religious duties as well a s to get the much-needed respite from ceaseless w ork. T he in itia l im­ pulse for pilgrimage, however, was provided by th e vision o f the M ah atm a which had several times come to his aid w hen he was faced w ith the various problem s in his early industrial career. He had ever since been keen to seek out th at holy person. O n his first pilgrimage in 1951 he decided to go to B adrinath. A bout this pilgrimage there is an interesting story. M r. M o d i had gone to M eerut to attend a tea p arty where he m et D r . R. K. C aroli, the famous cardiologist. O n his w ay b a c k hom e D r. Caroli accompanied him . He discovered th a t M r. M odi was having some difficulty in breathing. H e diagnosed th a t his h ea rt valves were defective. H e advised him n o t to g o to the hills because climbing heights w ould strain his h ea rt. B u t M r. M odi was determined to go, and so his reply was th a t i f he died a t the feet of God, he w ould be fortunate, b u t if he survived it would be proved beyond doubt th at his faith w as gen u in e and G o d desired to keep him beyond h arm ’s reach. H e w e n t on the pilgrimage and returned hale and hearty. Such was h is faith in the will o f God. In his second pilgrimage in 1953 when he w ent to G an g o tri, he m et Swami K rishnashram ji M aharaj who he a t o n ce rea­ lised was the living em bodim ent o f the figure o f th e visions th a t had haunted him in his dream s. H e becam e h is disciple an d thereafter pilgrimages to holy places a t intervals becam e his routine. He visited practically all well-know n holy shrines in the n o rth and south o f the country a t different tim es in his

90 lifetime. Mr. M odi was a G od-fearing m an with a d ev o tio n al bent o f mind. He built a n u m b er o f temples in the la b o u r colonies o f M odinagar, besides th e shrine o f Bhagvati D evi a t S h u k ratal in M uzaffarnagar D istric t o f U . P. and Lord Shiv T em p le a t P atiala in Punjab. He also built the magnificent Laxm i N a ra y a n tem ple a t M odinagar. It is a marvel in red sandstone, a triu m p h o f the architect’s im agination, w here the soul inspiring saga o f o u r ancient religion is beautifully carved. The design o f th e tem ple was prepared by M r. M . L. R oy, the famous arch itect o f K a n p u r who had earlier designed the building o f the w ell-know n Birla Temple in Delhi. T h e tem ple is an exquisite stru ctu re a n d stands in the h eart of M odinagar. It is a source o f a ttra c tio n fo r passers-by and visitors. G ay p ark s and fountains a ro u n d th e tem ple encourage people t o spend tim e in its lawns. H e w as later crem ated in the law n s o f this temple where a m arb le samadhi is to be constructed. Mr. G ujarm al h a d boundless faith in G o d .

He strongly

believed th at he w as a m ere instrum ent o f the D ivine W ill and th at his efforts w o u ld succeed only if God w illed them to. M r. M odi was a ls o a great philanthropist. H e established the R. B. M ultanim al M o d i C haritable Trust and th e S ainik Bhawan at Patiala. He established a Sadhu A shram at P atiala. However, his single biggest contribution to th e cause o f p u b ­ lic welfare is the E ye H ospital an d O phthalm ic R e se a rc h C entre a t M odinagar to w h ich he contributed Rs. 3 m illion. It is now working in co llab o ratio n w ith the N ational S ociety fo r the Prevention o f B lindness. Its foundation cerem ony w as p erfo r­ med on 26 April 1975 by the late President o f In d ia , M r. F ak h ruddin Ali Ahmed. T h is R esearch Centre is an in te g ra te d centre fo r prom otive, preventive, curative and re-habilitative care backed by education and research. I t will not only e n d e a v o u r to p re­ vent eye disease a n d blindness through ap p ro p ria te m ethods o f publicity media, co n d u c t surveys in schools and colleges, indus­


trial workers, ru ral p o p u latio n and continuously evaluate th e com m unity needs o f the changing society but will also have a mobile u n it fully equipped w ith instrum ents and medicines fo r giving im m ediate relief to patients at their door-steps. It will help to collect statistics o n the incidence o f eye diseases in ru ra l and industrial areas to help the governm ent to plan various ophthalm ic health program m es. M r. G ujarm al M odi realised the dire need o f such a centre in the country. He was d eter­ mined to m ake the centre a m odel institution to control blind­ ness. He h ad also m ade up his m ind to create em ploym ent opportunities fo r the blind. Mr. M odi prom oted the welfare o f women by establishing a Samaj K alyan V ibhag. The Sam aj K alyan Parishad organises tailoring and em broidary classes fo r women. There is also a n adult education centre u n d er its charge. It ensures em ploy­ m ent for widows and has also arranged some w idow -m arriages. N ow this organisation runs under the patronage o f his wife M rs. D ayaw ati M odi, who like her husband takes keen interest in all p hilanthropic activities. M r. M o d i also m ade substantial contribution in rehabili­ tating displaced persons when the partition o f India to o k place. He constructed G ovindpuri C olony consisting o f 500 houses a n d 25 small scale industries. All those persons who were rehabili­ tated were provided em ploym ent either in M odi enterprises o r in small scale industries set u p in this colony. As a p h ilan thropist, he also contributed greatly to the cause o f education. H e established a chain o f schools and colleges a t his birth place, M ahender G arh , a t Patiala and at M o d in ag ar He supported higher education by giving grants to established institutions like B anaras H indu University, colleges in M eeru t and other places. T here is an interesting story behind th e es­ tablishm ent o f the M. M . M odi Degree College a t M odinagar, which is one o f the prestigious educational institutions devoted to higher ed u cation in U tta r Pradesh. In 1957, Mr. M odi w anted

92 a nephew to be ad m itted to the B.Sc. class in M eerut College, o f w hich he was a generous patron. A t this, the Principal is said to have rem arked th at if M r. G ujarm al was so keen on col­ lege education, why didn’t he establish a college in M odinagar? M r. M o d i did n o t tak e the rem ark as an affront. On the other h an d , it sparked off a desire in him to establish a college at M odi­ n ag ar. The follow ing year the college began to function in rig h t earnest. It w as nam ed M ultanim al M odi Degree College after his father. It is now a full fledged post-graduate institution im p artin g education in 13 subjects o f Science, A rts and Commerce an d is regarded as one o f the best colleges affiliated to M eerut U niversity. It also has an extensive students’ hostel construc­ ted a t a cost o f Rs. 5,00,000 and was inaugurated on 16 January 1961. A W om en’s T raining College and N u rses’ Training Centre a t M o d in ag ar in 1965 was also set u p by him . All these institu­ tions provide education to m ore than 16,000 students. D epen­ d an ts o f the w orkers o f different M o dinagar industries get free ed u catio n o r train in g in these institutions. M onetary help and stipends are also available for students going in for higher educa­ tion in In d ia and abroad. H e also established a High School an d a Sanskrit Pathshala a t M ah in d er G arh, h is birth place and a degree college at Patiala, also nam ed after h is father. H e was interested in scientific research and development. H e co n trib u ted Rs. 2.5 m illion for the establishm ent of the M odi Science F o u n d atio n at M odinagar in 1975. It has a cotton developm ent scheme to train cotton grow ers, and use the latest m eth o d s o f p ro d u cin g high yielding varieties o f natural fibre. M r. M odi also inspired his younger b ro th er M r. K edar N ath M odi to fo u n d a public school nam ed after M r. G ujarm al M odi’s wife, M rs. D ayaw ati M odi. H erself a great p atro n o f education, she is P resident o f th e Public School. It is affiliated to the Cen­ tra l B o ard o f H ig h er Secondary Education. It is housed in a tw o-storcy building w ith 30 spacious class room s and well-equip­

93 ped laboratories. A grand auditorium is a special feature o f the school. The P rincipal's lo d g e and the staff quarters are complete. A self-contained hostel, a sw im m ing pool, a gymnasium, a G ita Bhawan and a h orse-riding track are also under construction to complete the school com plex. Mr. M odi had a m ulti-faceted personality. He was a born adm inistrator. A n a rd e n t believer in God, he was never after power. He led very sim ple life and believed in sharing all th at he had with every one a ro u n d him. Throughout his life, he helped a num ber o f people. H e also helped his relatives, friends and refugees by setting u p industries for them. He was particu­ larly sym pathetic tow ards th e poor and the needy, who, there­ fore, loved and respected h im . He won respect and esteem of one and all because o f his inim itable capacity to distinguish bet­ ween right and w rong a n d to stand up fearlessly for w hat he regarded as his m oral duty. M odinagar is a tangible expression o f his untiring efforts for a n d dedicated service to the cause o f India’s industrial developm ent. Less tangible though, but equal­ ly abiding, is the place he h a s carved out for himself in the hearts o f thousands o f m en and w om en who knew him. He was in­ deed a great hum anitarian ev en more than a great industrial m ag­ nate.

A Vision of Karmayogi Gujar Mal Modi  

The biography of Gujarmal Modi

A Vision of Karmayogi Gujar Mal Modi  

The biography of Gujarmal Modi