The battle for India's financial capital Mumbai intensifies

The first stop of several visiting dignitaries to India is now Ahmedabad, not Mumbai or Delhi. What does this augur for the future of India’s financial capital? Many believe this is not accidental

Governor BS Koshyari feeds laddoos to Shiv Sena rebel Eknath Shinde soon after the latter took oath as CM of Maharashtra
Governor BS Koshyari feeds laddoos to Shiv Sena rebel Eknath Shinde soon after the latter took oath as CM of Maharashtra
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Sujata Anandan

Maharashtra Governor Bhagat Singh Koshyari recently said that if Marwaris and Gujaratis were to leave Mumbai, the city would no longer remain the financial capital of India. He later apologised, but Maharashtrians are neither amused nor appeased by the apology. Who wants Marwaris and Gujaratis to leave Mumbai, they ask, and why did the Governor make such a statement out of the blue?

While Koshyari has a well-earned reputation for shooting first and thinking later, and acting in ways hard to defend constitutionally (recall the 80-hour government of Devendra Fadnavis, sworn in hurriedly, the Governor sitting over the Speaker’s election, not allowing nominations to the Legislative Council etc.), many see a method in this apparent madness. Why else would the Governor publicly question the greatness of the iconic Chhatrapati Shivaji Maharaj or publicly make fun of another icon, India’s first woman teacher Savitribai Phule, for getting married when she was still a child?

“Those statements would not have been made if they weren’t meant to be made,” insists Raju Parulekar, veteran television journalist from Mumbai. Tushar Gandhi, great grandson of Mahatma Gandhi, concurs: “Governors don’t deliver extempore speeches or make political statements and crack loose jokes,” he points out. Any local bureaucrat at the Raj Bhavan, they both point out, would have alerted the Governor that his statements would hurt public sentiment.

Charu Satam, who has been media advisor to several political leaders in the state, believes the top BJP leadership has been testing the waters. “I’d say the break-up of the Shiv Sena also bears a [link] to the Governor’s statement. Both the Shiv Sena groups are weak and vulnerable today. Had this rebellion not happened, Shiv Sena would have hit the streets by now and the Governor would have had to leave Mumbai,” he says.

Many Maharashtrians believe Mumbai is a “bleeding wound” in the side of Gujaratis who feel aggrieved that the city is the state capital of Maharashtra and not of Gujarat; especially since they believe Gujaratis established the city as the financial capital of India.

You might reasonably ask: why, then, did Marwaris and Gujaratis fail to transform their own home states into economic powerhouses? Mumbai’s position as the financial capital has not been displaced in the last half a century. Even Surat, which was a thriving port city in the 17th century, lost out to Bombay, which also displaced Calcutta as the hub of commerce and finance. What is it about the city, then? It is the cosmopolitan culture of the city, perhaps even more so than Kolkata, which draws talented people to the city, say Mumbaikars.

Satam points out how the first stop for almost all visiting dignitaries to India in recent years has been Ahmedabad. But despite the Centre’s determined promotion of Gujarat and Ahmedabad, the importance of Mumbai has not diminished.

Several sections of the Reserve Bank of India were shifted to Ahmedabad but the Gujarat capital is yet to be accepted as the financial capital of the country. Efforts have been made to move operations of the Bombay Port Trust to Porbander and Pipava. The contract to build submarines was taken away from Mazgaon Docks in Mumbai to Pipava despite the Shiv Sena workers’ unions fiercely opposing the move on grounds that it would deprive Maharashtrians of jobs.

Indeed, even Gujarati diamond traders have not agreed to shift the diamond bourse from Mumbai to Surat. This is essentially because the traders trust Gujaratis less and the traditional ‘angadias’ -- mostly Muslims from Uttar Pradesh and Bihar working as couriers for the diamond merchants -- more. Given Gujarat’s history of communal riots, the angadias refuse to move house, forcing the diamond merchants to stay rooted to Mumbai.

The battle for India's financial capital Mumbai intensifies

“Had it not been for Maharashtrian and North Indian workers and South Indian managers, industrialists would not have managed to do much with their money,” says Gandhi. The investments were multiplied by South Indian managers and the workers. Everyone has contributed to the making of Mumbai,” he adds.

The historical distrust between Gujaratis and Maharashtrians can be traced back to Chhatrapati Shivaji’s time when the Maratha warrior king invited traders and merchants to settle in his territory. That was because Maharashtrian society did not have a traditional trading class and financial transactions were done by the Deshashtha Brahmins, who acted as mere moneylenders.

Villages were governed by the ‘balutedar’ system of barter. Balutedars were artisans, cobblers, masons, potters etc., all of whose services were required by the residents. In return, the village council housed and clothed these balutedars, provided them land to settle on and took care of their other interests.

There were the lower classes for duties traditionally assigned to them but none to trade, buy or sell. Gujaratis and Marwaris who came forward at the invitation of Shivaji—who had had to raid the diamond merchants of Surat to finance his wars against the Mughals because local Maharashtrians did not have much money—settled to become an integral part of Maharashtra. But they continued to be distrusted.

Two centuries later Mahatma Jyotiba Phule pointed out that many traders were exploiting the common people. Most Maharashtrians developed great contempt for the ‘Shethjis’ (traders, mostly Gujarati) and ‘Bhattjis’ (Brahmins – priests and moneylenders). That contempt against Gujaratis and Brahmins has persisted in Maharashtra and explains why the Brahmin-dominated RSS has not been able to gain a real foothold in a state that swears by the socialist values of Phule, Shahu Maharaj and B.R. Ambedkar.

During Shivaji’s time, Mumbai was just seven disjointed islands ruled by a Muslim Sultan, who sold off two of the islands to the Portuguese in return for protection against the Mughals, who were expanding their territory southwards. At the time Surat was the major port city in India used by the Mughals for maritime trade and Hajj visits; so was it used by other colonisers like the Portuguese, Dutch and British.

Following the wedding of King Charles II of England with Princess Catherine of Braganza in 1662, the seven islands of Bombay passed from Portuguese hands to the British as her dowry. At first, like the Portuguese, the British thought they were useless pieces of land then peopled only by Koli fishermen, and did not know what to do with them. It took them a few more years to realise the strategic maritime and military potential of the islands were they to be joined together and thus began the reclamation of land that became the first settlement of ‘Bombay’.

By 1687, the British East India company had shifted their maritime headquarters from Surat to Bombay.

As Surat began to lose its importance as India’s main western port city, Gujarati businessmen and traders moved in hordes to the reclaimed islands of Bombay. But the crucial push came when the imminent civil war in the US between the Union and Confederate States meant that cotton production and supply from America was affected.


Britain’s textile mills had depended mostly on cotton from the US. They now evolved a plan to grow cotton in Vidarbha (then Central Provinces and Berar), the region with black cotton soil close to Bombay.

At first, they exported cotton to the UK from India. But often water would seep into ships, ruining the bales of cotton by the time they reached Manchester. Thus, they encouraged the Indian business class to set up textile mills in Bombay—the first textile mill owner was a Parsi, Cowasjee Davar, and not a Gujarati.

However, the labour force in the textile mills was almost entirely drawn from the mofussil areas of Maharashtra and so at the time of Independence, Bombay, as a textile city (it became a financial city much later) had a skewed demography, where the rich entrepreneurs were mostly Gujarati, the workers were Maharashtrian and South Indians bridged the gap as clerks and managers between the two.

Not surprisingly, when Shiv Sena was formed in 1966, its first agitation was to elevate the Maharashtrian blue collar workers to the levels of white collar workers and break the domination of Gujaratis in the reconstruction of the city undertaken in the 1950s.

The absolute refusal of Morarji Desai and partly Sardar Vallabhbhai Patel to hand over Mumbai to Maharashtrians alienated Maharashtrians further. Patel passed away too early and by the time Desai became the chief minister of the bilingual Bombay state, the distrust between Gujaratis and Maharashtrians had grown. Desai publicly implied that Maharashtrians were only worthy of scrubbing utensils in Gujarati homes. ‘Bara, Mumbai tumchi, pan ata bhaandi ghasa aamchi! (Ok, Mumbai is yours, now get back to scrubbing our utensils)’, he had famously said, which triggered mass protests. As many as 106 protestors were killed in a police firing at Flora Fountain, now known as the Hutatma (Martyrs) Chowk.

Maharashtrian Congress leaders like Y.B. Chavan were also upset with Desai and other Gujaratis in the state cabinet who allegedly allotted more development funds to Kutch and Saurashtra than to Konkan and Western Maharashtra. But it was only when the Congress almost lost majority in the 1955 elections to the Left parties on this issue that the Union government conceded Bombay to Maharashtrians. But Desai and others dominated the city Congress and made strenuous efforts to hive off Bombay as a city state when efforts to include it in Gujarat failed.

Observers in Maharashtra believe that six decades later, Narendra Modi and Amit Shah are now trying to turn Mumbai into a Union Territory since they are failing in their attempts to diminish the stature of Maximum City.

Even the completely unnecessary bullet train project, whose route runs through middle class Maharashtrian homes, is designed to drive the poor locals to the interiors of Maharashtra, leaving the city to be dominated by Gujaratis again, many believe. But before that they needed to destroy the Shiv Sena and hence the Shinde rebellion.

But Koshyari’s foot-in-the-mouth moment has provoked a sharp reaction and galvanised Maharashtrians. Uddhav Thackeray has even promised to administer Maharashtra’s famed ‘Kolhapuri chappal treatment’ to Koshyari. It has also embarrassed Eknath Shinde’s faction with the chief minister distancing himself from the Governor’s ‘personal’ statement.

While both Shinde and his deputy Devendra Fadnavis have been busy doing damage control and reiterate that Mumbai belongs to all, old memories and old wounds have been revived. It is hard to tell how this is going to end.

(This article was first published in National Herald on Sunday.)

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