ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Gender, Religion and Tax Concessions

The Tenacity of the Hindu Undivided Family

The key houses of business, both old and new, found ways to maintain control over decision-making through the institutional structure of the family-run business house. This article attempts to point out the unique interstices of gender, property and religion in the facilitation of the family-run business house as the locus of organisation of industry and commerce in India.

One of the most significant contributions of the R K Hazari report was the official identification of the 1960s “business group” as the basic institutional unit of organisation of Indian monopoly capital. The group, in this view, consisted of a number of related and unrelated activities controlled by a single central decision-making authority and thereby functioning as a coordinated organisation (Hazari 1967). This meant that besides a high degree of product concentration, monopoly capital in India consisted of the predominance of a few representative units of organisation of capital in most areas of industry and trade. The key houses of business, both old and new, found ways to maintain control over decision-making through the institutional structure of the family-run business house. While the entity of the “business group” has been emphasised in the literature, the familial basis of ownership and control remains an understudied area. This article aims to point out the unique interstices of gender, property and religion in the facilitation of the family-run business house as the locus of organisation of industry and commerce in India.

There were two ways in which family control over the organisational structure of business groups and the ownership of wealth generated through these structures were maintained. The first had to do with the legal provisions of “corporate governance” structures which facilitated the optimum mix of various forms of registered companies like partnerships, private limited companies, unregistered and registered public limited companies under the umbrella group through interlocking shareholdings. These were done within the enabling legal provisions of the Indian Partnerships Act of 1932 and the Companies Act of 1956. Apart from risk spreading, this also ensured an avenue to escape the minimal restrictions on expansion under the Monopolies and Restrictive Trade Practices (MRTP) Act after 1973. It was also important for labour deployment and control with employers often making sure that each company only had less than seven employees and pre-empting any possibility of trade union formation since the stipulations of the Trade Union Act of 1926 (Das Gupta 2010).

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