How Gujarmal found Modinagar after being banished from the Patiala riyasat

In the Modinagar township, Gujarmal would take an extended morning walk with his assistant trailing him with a notepad in hand.

Gujarmal Modi | Illustration by Ramandeep Kaur | ThePrint

If one looks at 19^th century billionairs on any continent – they largely dealt in food items because that was the only essential commodity of that era. It’s the same with the Modis. Across two centuries, the Modi family travelled a full business arc — starting as traders of ration items, to being retailers, then mill owners and then onwards to developing series of other industries producing sugar, cloth, soap, rubber among others.

The recorded history of Modis begins in 1800 with Rambaksh Modi who provided rations to the army of Jhajjar Nawab. Following the 1857 mutiny, the Jhajjar region was handed over to Mahendra Singh, the Maharaja of Patiala.  This facilitated Rambaksh Modi, the premier ration vendor of this region, to get permission to also open an office in Patiala. Business grew exponentially with increased footprint. Serving the Maharaja as well as the British army, Rambaksh’s son Chiranjilal expanded the business from Multan in the west to Kanpur in east. In fact, Chiranjilal’s first son was born in Multan and so he was named Multanimal.

Multanimal had an active entrepreneurship gene and he soon branched into a new retail business of selling grains to local flour mill run by Sikh business people. When the mill got into a loss, Multanimal, seeing an opportunity, acquired the loss-making unit and re-fashioned it into a profit-making unit.

Meanwhile, Multanimal lost his wife. He remarried but his second wife too died, within a week after giving birth to their son. Since the newborn was nurtured by a wet nurse named Gujari, the child began to be known by her name: Gujarmal.

Early setbacks

Sonu Bhasin in her book, Entrepreneurs who Built India, writes: “Entering family business at a young age of 17, Gujarmal had to first face a series of reverses. Dipping into the grain sales business, he created a differential pricing system of a higher price for selling wholesale stock to the British army and charging a lower retail rate from common citizens as per local purchasing power. This led to an altercation with a British colonel in Patiala who accused Gujarmal of overcharging the British. The fight eventually got diffused but it sowed the first seed in Gujarmal’s mind to shift out of Patiala and seek an alternative Karmbhoomi”.

More strife was to follow. The maharaja of Patiala and his officialdom refused Gujarmal the certificate to set up a vanaspati ghee factory and then soon after, denied him permission to set up a cloth mill. The last straw was when Gujarmal was humiliated when he refused to drink alcohol at a gathering at the residence of Maharaja of Patiala. In fact, this mis-understanding reached a point where Gujarmal was banished from the Patiala riyasat.

Gujarmal was in no position to fight the Maharaja but the incident led him to think up an audacious plan – that of creating his own independent riyasat or a township where he would be free from whims and fancies of maharajas and the British officials.  Gujarmal was barely 30, yet the scale of his ambition was huge.

Finding and founding Modinagar

He started talking about a private township with a well laid out industrial belt, accommodation for all workers, civic facilities such as schools, hospitals, parks and temples. A visit to Calcutta and then to Hapur where his cousins were already running established businesses made Gujarmal realise that if one has a good plan, it is possible to raise funds from investors. In 1932, British government increased import duty on sugar to encourage local production. This made it prudent for Gujarmal to set up a sugar plant first.

Based on his detailed proposals, Gujarmal managed to raise enough money from the market to activate plans and begin to look for land. He travelled across the region to search for a large piece of fertile land that had ample water supply and access to rail and road transport. About 50 kilometers from Delhi, Begumabad ticked all boxes. It took him a mighty effort to persuade multiple owners to sell their individual pieces of agricultural land. But finally, he consolidated a piece of 40 acres and started work on building a sugar mill here. From the start – there was a marked difference in the way business was done by Gujarmal . For instance, at the sugar mill, Gujarmal noticed that the sugarcane harvest came on cattle-driven carts and the animals were made to stand through the night with the heavy loads on their back. He ordered creation of special stands so that the load could be off the animals.

Sonu Bhasin writes: “Starting in 1934 with one sugar mill and a few hundred residents, in mere four decades, by 1970s, the Modi Group became the 7^th largest business group in India with assets of over Rs 900 crore and annual sales revenue of Rs 1600 crore. The name of Begamabad town and its important installations like its railway station, post office etc were changed to ‘Modinagar’ — after its most important resident. Modinagar became a landmark on the industrial map of India with over 35 factories, numerous parks, educational institutes, healthcare facilities that served not just the town’s middle class but also workers and their families.”

The family tree

Not just business — but even in his personal life — Gujarmal Modi was a man with dramatic destiny. As was the custom in those days, he was married at a tender age of 13 to an equally young Rajban Devi. Over the next decade, the couple had 10 children but none survived. But from his second marriage to Dayawati in 1932, Gujarmal had five daughters and four sons – all of whom were born and brought up in Modinagar and were witness to the evolution of the Modinagar story.

To best understand the mindscape of the man who actualised a daring mission during the closing years of the Raj — when dice was always cast against the average Indian entrepreneur — one must dip into the treasure house of memories and stories recounted by Gujarmal children and the larger family. It is these anecdotes and stories that best describe the man.

Modest living

Rajkumari Agarwal, his eldest daughter, recalls Gujarmal as an extremely affectionate father who treated her like a son and called her ‘Raj Babu‘. She recalls that she and all her siblings played and studied with the workers’ kids and lived together like a close-knit community. Despite early success in business, the Modi family lived in a modest manner with no flamboyance or extravagance.

Raj Kumari says that at the Modi residence, there was always simple meals of daal and saabzi etc. An extra dish was made only if there were guests visiting. The extended Modi family was involved in the lives of workers with weddings happening at the local school. As the first couple of the town, Gujarmal and Dayawati would be involved in the marriage rituals — from the welcome teeka to parting gifts, including sarees and ‘ginnis’ as a gold coin was called in those days.

It was customary for the entire town to wake up to a bugle at 5am every morning. Gujarmal would have an extended morning walk through the town with his assistant trailing him with a notepad in hand. Any resident could approach him with their problem and he would try to solve the issue.

Promila, Gujarmal’s fourth daughter, too recalls with fondness her father’s tremendous sense of parity and liberty toward girls of the family. When all boys of the family were being sent to Scindia school in Gwalior – Promila insisted that she too would like to join her siblings. Despite the tremendously conservative atmosphere in that era, Gujarmal sent Promila to live in the Scindia girls hostel. Years later, when Promila got married to a prominent industrialist who ran an iron and steel manufacturing plant from Vishakhapatnam, Gujarmal would give tips to Promila on how to remain an active part of the decision-making board of the company.

Gujarmal Modi’s youngest son Umesh Modi says: “My father is perhaps the only industrialist in India who had an entire town named after him – during his lifetime. It was a town he made from scratch and he spent his entire life there. It is my intention to re-invigorate Modinagar and to build on his legacy.”

This article is a part of a series called BusinessHistories exploring iconic businesses in India that have endured tough times and changing markets. Read all articles here.

(Edited by Anurag Chaubey)