B.K. Birla: The conscious capitalist with nationalism at heart

As a cub reporter working with The Indian Express in Kolkata, my first job often entailed working the phones to connect with the city’s top industrialists to get their views on a diverse range of subjects—from views on the Budget, to economic issues of the state, and even topics related to arts and culture.

For one such assignment my editor passed on a landline number of Birla Park, the sprawling residential campus in South Kolkata, which houses several bungalows belonging to different sections of the industrious Birla clan. He asked me to connect with the family patriarch Basant Kumar (B.K.) Birla and get his views on a particular subject, which I cannot recollect now. But what I can recollect is the trepidation I felt about calling one of the tallest business leaders of the country that we had grown up hearing about and discussing something with him, which I am sure was trivial in nature.

I was almost certain of not getting through to him and being told off by whoever picked up the call on the other side. But the boss’s orders must be followed, and so I picked up the receiver and dialed the number (outgoing calls from cell phones were still expensive then). A member of the family’s staff picked up the call and heard me patiently. I tried my best to explain what I wanted to speak to Birla about and stopped short of pleading to get two minutes on the phone with him.

The aide put me on hold and a couple of minutes later, a dignified voice of an elderly gentleman announced that I was speaking with B.K. Birla. I fumbled for a few seconds before collecting my thoughts together and asked the set of questions I had prepared for him. Birla was patient, polite and quite forthcoming with his views. At the end of the conversation, he put me at ease by enquiring about my background, and also spoke of himself. A leading figure of Kolkata’s (and indeed India’s) Marwari business community, Birla emphasised how he was more Bengali at heart than many Bengalis are by birth and professed his love for Rabindra Sangeet.

I spoke to him on two or three more occasions for similar stories and also met him once or twice during press conferences at the group’s headquarters, Birla Building, in Kolkata’s Dalhousie area. I cannot claim to know Birla as well as some of my seniors in the profession who covered the business house keenly over the years did. But from whatever limited interactions I had with him, one thing was clear: his accessibility. ability to strike up a rapport, his patience to carry on a conversation, and his attention to detail while doing so were all virtues, which in a different context, helped his growth as a respected industrialist.

Birla, also fondly known as B.K. Babu, passed away on July 3 at the age of 98. He is survived by his two daughters Manjushree Khaitan and Jayshree Mohta and grandson Kumar Mangalam Birla. His wife Sarala Birla had passed away in 2015; and son Aditya Vikram Birla (Kumar’s father) passed away in 1995.

Till his death, he remained the chairman of group companies like Kesoram Industries (tyres, cement, and rayon), Century Textiles and Industries (textiles, pulp and paper, and real estate) and Jay Shree Tea. Century’s cement business was demerged from the company and taken over by Kumar Mangalam Birla-led UltraTech Cement in 2018. Other group companies include Century Enka (nylon filament yarn and fabric), Mangalam Cement, and Mangalam Timber.

Some of the B.K. Birla Group companies have underperformed in recent times and have been unable to cope with competition from well-heeled domestic and international rivals from India and abroad. Though several business groups across India eventually became much larger in size than the B.K. Birla Group of Companies, which has a collective turnover of over ₹16,000 crore, Birla’s legacy remains important as it marks the end of an era on several accounts.

He was one of the last industrialists alive who diversified and grew businesses in the licence raj era and made the transition to a liberalised economy subsequently. Several of his contemporaries that succeeded in riding a similar transition include patriarchs of business families like Rama Prasad (R.P.) Goenka and Dhirubhai Ambani, who passed away much before Birla.

The Birlas began their entrepreneurial journey as traders after they made their way to Kolkata from Pilani in Rajasthan. Birla’s year of birth, 1921, marked the first foray by this business family into manufacturing. Ghanshyam Das (G.D.) Birla, Birla’s father, ventured into jute manufacturing, which was a preserve of the British till then, by setting up Birla Jute. G.D. Birla, who enjoyed close ties with Mahatma Gandhi and lived by Gandhian principles, was driven by a spirit of nationalism, which Birla inherited as well.

One of the ways in which Birla’s willingness to participate in nation-building manifested was by way of the encouragement and support he provided to employees who wanted to turn entrepreneurs while remaining in the employ of the group. Several executives of the group went on to start their own small businesses and received support in the form of seed capital, loans, and procurement orders from the B.K. Birla Group companies. While this led to the well-being of employees and helped earn their loyalty, it also led to conflicts of interest at times.

Birla also believed in approaching business from alens of collaboration rather than competition. An example that demonstrates this is his move to get two of his peers who ran competing businesses to join the board of one of his companies. The B.K. Birla Group was a relatively late entrant in the tea business. To benefit from the expertise of well-entrenched entrepreneurs in this space, he requested Brij Mohan Khaitan and Gouri Prasad Goenka to join the board of Jay Shree Tea, which they did. Khaitan, who passed away in June, was the patriarch of the Williamson Magor Group that has interests in tea through McLeod Russel. Goenka is the non-executive chairman of Duncan Industries, which owns several tea estates in North Bengal. Khaitan and Goenka were on Jay Shree Tea’s board for decades till they stepped down in 2017.

Sanjiv Goenka, chairman of the Kolkata-based RP-Sanjiv Goenka Group, describes Birla as an “outstanding thinker and implementer who ran his companies on a tight leash”. Birla’s attention to the minute details, despite sitting at the top of the corporate ladder at his group, was an inspiration for him, says Goenka whose group has interests ranging from power to carbon black and retail. Goenka recollects that, in his early 20s, he once happened to be on the same Indian Airlines flight with Birla and his wife. Birla asked Goenka to sit across the aisle from him and struck up a conversation. “I will never forget the detail in which he described how he gets involved in every business process, be it accounting or costing. It was a lesson for me. He was a stickler for execution and a forward-thinking businessman, who was always very warm and affectionate towards my father [R.P. Goenka] and our family.”

While following the traditional culture of Indian families, Birla was also quite modern and pragmatic in his thinking. He was one of the first patriarchs of an Indian business family who encouraged his daughters to take up an active role in business. While Mohta runs Jay Shree Tea, Manjushree Khaitan is the executive vice chairperson of Kesoram. His brother, Krishna Kumar (K.K.) Birla, who died in 2008, also empowered his daughter Shobhana Bhartia to take up the mantle of the media empire he had founded. The difference, however, lies in the fact that K.K. Birla didn’t have a son, while B.K. Birla did. In earlier days, it was common practice at traditional Indian business families to pass on the baton of running the business to the male heir only. But Birla was ahead of his time in deviating from this practice.

The nonagenarian, who would come into office every morning despite his advanced age, was also not shy of discussing his succession plan, which he has tweaked several times, publicly. While the specific details of this plan will unfold in the days to come as his will gets probated, a few plans were already put in place when he was alive. UltraTech’s acquisition of Century’s cement business was a step in that direction. Also, B.K. Birla stepped down as the chairman of Pilani Investments, the Birla family’s primary holding company that owns substantial stakes in companies owned by various sections of the family, in April. He was replaced by Kumar Mangalam Birla’s mother, Rajashree Birla.

Kumar Mangalam Birla is also expected to play a greater role in the affairs of Century Textiles and Century Enka in days to come. It is also expected that Manjushree Khaitan will continue to control Kesoram, along with Kumar Mangalam Birla. Mohta will continue to run the tea business and also become custodian of the family’s massive art collection, which includes several works from the so-called Bengal Masters, including Rabindranath Tagore.

In the spirit of nation-building and to promote and preserve Indian culture, the B.K. Birla Group sponsored the establishment of several centres of education, arts and culture across India. Though Birla joined the family business as a teenager in the late 1930s after dropping out of Presidency College, where he secured admission to pursue a degree course in science, he knew the value of higher education and its impact on society. This led to institutes like the Birla Institute of Technology and Science, Pilani and Birla Institute of Liberal Arts and Management Sciences, Kolkata coming up; along with centres for arts and culture like the Birla Academy and Kala Mandir in Kolkata.

If there is one criticism that can be levelled against Birla, it is that he held on to the executive chairmanship of group companies for far too long, even after he had withdrawn himself from day-to-day operations of these businesses quite some time ago. But B.K. Birla will always be remembered as a nationalist business leader, who practised conscious capitalism far before it became fashionable to do so.