Mysuru: The first ‘startup’ state of India (1881 – 1947)

Entrepreneurship is a buzzword in India and the world, and it is only getting louder. With new start-ups started by young and middle-aged blue-eyed boys and girls addressing various problems of our country and the world, we are seeing a beeline of products in the market. All this buzz is creating jobs, building wealth, and bringing cutting-edge technology and products to the front.

In the India Innovation Index released in 2020, Karnataka stood first as the most innovative state of the country. Entrepreneurship is the only way to create enough jobs for ‘young India’ and help the economy grow to its full potential.

In all this buzz, let me tell you an interesting story on why Karnataka is at the forefront in entrepreneurship: maybe due to Kaveri water, the cool air, or the rich soil, accommodating people, or maybe a bit of all like a ‘south Indian thali’.

A bit of history where it all started:

It all started in erstwhile Mysuru State (currently Karnataka) lead by Maharajas Nalwadi Krishna Raja Wadiyar (1894-1940) and Jayachamarajendra Wodiyar (1940-1971), and 12 Diwans, the most famous being Seshadri Iyer, Sir. M. Vishweshwaraya and his protégé Sir. Mirza Ismail. They built a phenomenal, unparalleled entrepreneurial ecosystem for the welfare of their citizen.

Let me start with a normal day in Mysurian’s life in the 1940s:

‘People of Mysuru would wake up and wash themselves with Mysuru Sandal Soap, wipe with Mysuru towels, perform Mysuru’s own Ashtanga Yoga, do puja with Mysuru jasmine and Mysuru agarbathi lit with Mysuru match stick, drink Mysuru coffee with Mysuru sugar, wear Mysuru silk and cotton, perfume with Mysuru perfumes, eat Mysuru masala dosa with Mysuru Pak, ride on Mysuru-bred horses, write on Mysuru paper, build houses with Mysuru cement using Mysuru steel, Mysuru bricks, Mysuru tiles, Mysuru timber, granite and pipes, paint with Mysuru paints and varnishes, furnish their house with Mysuru furniture, decorate their home with Mysuru inlay artwork and Mysuru paintings, have all the Mysuru lamps lit with electricity generated in Mysuru, using Mysuru manufactured transformers and insulators wheeled on Mysuru manufactured poles, eat abundant Mysuru food with avarekalu sambhar followed by beetle leaf and Nanjangud banana to digest all that you ate and relax to Karnatic music before going to sleep on Kadkola mat’

For an entrepreneur to be successful, he has few basic needs: Raw material- to build his product, Capital- to build his facility and team, Infrastructure- to build and move his goods, and a Market of buyers- without this, none of the others matter!

Raw material:

Industrialization in the early 20th century could only succeed in a place where abundant natural resources are available. Mysuru state was fortunate in being blessed with minerals and waterfalls (to generate electricity). Kaveri river flowed in the state providing plentiful water. Gold, Manganese, copper, chrome, clay, and various other minerals were available to be mined and processed. Nature was kind in giving forests which yielded valuable products for small scale industries for value addition. Although nature provided many, that is not enough, as raw materials must be extracted, grown, and/or pre-processed.

 ‘Industrialize or perish’ -Sir. M. Vishveshwaraya

From the beginning, the Maharaja of Mysuru always gave equal importance to agriculture and industry. He understood that the foundation of economic activities was agriculture and it heavily relied on farmers, who comprised most of the population. So, the strategic thought was to include agricultural produce from villages to act as the foundation for most of the industrial activity.

The Mysuru State, under His Highness’s leadership, took up innovative and large projects of importance to make the supply of water to agriculture and industries dependable. The Mysuru state built Krishnarajasagara (KRS) Dam, Vani Vilasa Sagara, and Chamaraja Sagara, which provided a dependable supply of water for irrigation and lessened the dangers of the scarcity of rainfall. The KRS dam, completed in 1938 is 8,600 feet long and 120 feet high and covers 130 sq. Km. The Irwin Canal drawn from the KRS dam irrigated 1,20,000 acres. The commitment to the welfare of the people and complete this project was so high that, the then maharani had to pledge her jewels to complete the dam. To spread knowledge and educate farmers for better agricultural practice, the department of agriculture was established in 1898. This department steadily established research, demo farms, agriculture schools, animal husbandry, improvement of agricultural implements and took up extensive extension work to publicize all these.

Just to give an example, this emphasis on agriculture, completion of KRS dam, and irrigation increased sugar cane production, which influenced the setting up of Sugar factory in Mandya. These together uplifted the poor farmers of the area dependent on insufficient rain into affluence. The State wanted to use bagasse and molasses, waste from Sugar mill, so started Mysuru paper mill and a distillery (industrial, potable, and power alcohol) to process them respectively, further providing jobs and profit.

Agricultural raw materials like cotton, sugar cane, coffee, oil seeds were grown in large areas. Cotton, silk, and wool fibers were available in plenty for processing. The State invested heavily in industrial projects and actively encouraged the use of raw materials for the growth of industries in the state.

Capital:

Agriculture is a capital deficient process, always needing upfront capital investments. To take care of this, Mysuru developed a sustainable model wherein, this constant capital deficiency was helped by a co-operative financial model and rapid mechanization and modernization of agriculture, which in turn increased agriculture output. The increased output provided more raw materials for improved industrial output. Both agriculture and industry derived higher value and returns due to this. Not only that, this enhanced agricultural wages in the areas adjoining industries. 

General capital/credit requirements were met by the co-operative banking system. In 1938, there were 2,088 co-operative societies catering to citizens of Mysuru state. The villagers were made to realize the immense advantage of co-operative banking and encouraged to invest borrowed capital in profitable agricultural improvements. Urban co-operative societies were very well organized, well managed, and financially very strong, with good reserves to the benefit of the general public and entrepreneurs. 

Mysuru was one of the few states which provided great investment opportunities in the share capital of the industries. By offering shares, the state helped in creating wealth for its people and prevent the habit of hoarding. This also helped in venturing into new business and continued expansion of industries. People readily subscribed to share capital of companies floated by the state indicating a healthy ecosystem.

To increase the income stream of people and to encourage entrepreneurship, the state helped people start a large number of cottage industries at their homes, as a side occupation during leisure hours. Spinning and weaving, tape making, net making, knitting, coir and rope making, cotton ginning, flour milling, cart making, and oil extraction were some of the important cottage industries that flourished in the State.

Infrastructure:

Infrastructure as a key component of industrial success was understood and a total length of 1,300 km of railway lines was laid in Mysuru state alone. Many roads and bridges were constructed connecting different parts of the state with few trunk roads (the current highways) connecting major cities.

The pulse of India in the early 20th century was villages. For India to grow and advance, the advancement of villages was a must. Decentralization of village improvement works was thought to be the best way to advance villages so, the ‘Panchayat act of 1918’ was enacted. Community work like building roads, tanks, and others in a village was taken up by locals, and panchayats compensated for the same. By 1938, more than 2,500 major and 22,000 minor tanks were built or managed in the State quenching the thirst of people and helped in agriculture.

‘The spirit of India dwells in the Village. It is the poor struggling villager that is the real citizen of India. It is he who needs all the attention, all the encouragement and all the protection which an administration can bestow’ -Sir Mirza Ismail 

The first hydroelectric power unit in Asia was set up in Shivanasamudra which helped in the industrialization of the Mysuru state. On 30th June 1902, the power generated here was transmitted to Kolar goldfields. Since then, power was provided to industries, agriculture, and lighting. The availability of cheap power directly increased the agricultural output and earnings of farmers. It also helped in setting up a large number of industries.

The vast irrigation schemes, construction of roads, bridges, and buildings, the expansion of railways and the gigantic hydroelectric projects, and starting of key industries such as soap, sugar, silk, paper, cement, and steel contributed to raising the standard of living.

Every industry needs educated skilled people for its operation and growth. This was realized by the state much earlier and a systematic plan was put together to educate and skill the people of Mysuru. Mysuru state started the department of education in 1857 with a grand vision of primary and higher education. One in three school-going children was reached out by the department and enrolled in schools. Enabling environments like the ‘Compulsory Education Act of 1913’ and the ‘Elementary Education Act of 1931’ brought the focus of Mysuru State on creating an enlightened society. In 1935, there were 6,692 public institutions in the State with a total strength of 3 lakh pupils.

For intellectual progress and robust development of the state, Mysuru University was established in the year 1916. This was the first university founded outside the limits of British India. In 1909, the regent of Mysuru state, Maharani Vani Vilasa Sannidhana donated 371 acres of land, Rs.5 Lakhs for capital expenditure, and Rs.50,000 annually (about 20% of budget) to start the Indian Institute of Science (IISc), the top institution of India in Bengaluru. One of the initial research contributions from IISc was to establish a sandal oil distillation process, which was used in a Sandal oil factory. Mysuru rulers' innovative thinking for long-term goals was always a priority.

Education and health of people go hand in hand, so also the thought of Mysuru rulers. Many institutions for innovative health care were set up for solving the problems of people, even if it did not give direct returns. Basic and advanced medical care including mental health care was provided to people of the State. In 1932, there were more than 282 medical institutions treating more than 53 lakh patients every year. To name a few, Krishnarajendra hospital, Vani Vilas hospital, Mental hospital (later NIMHANS), Maternity hospital at Chickmagalur, and McGann hospital in Shimoga along with numerous Public health centers in rural areas.

The market of buyers:

In 1880, the maharaja of Mysuru started the Dasara exhibition as a part of Dasara celebrations to showcase new innovations and products to the people of Mysuru. This was one of the first trade expos in India to showcase products from industries, artisans, and entrepreneurs alike.

The maharaja set up a Trade commissioner in London to publicize and expand the market for products produced in the State. Sandal oil and fine perfumery was one of the key first product promoted through this and then expanded to many products. Through this initiative, a market for Mysuru granite and kerbstone was created in England.

Krishnaraja markets in Bengaluru and Mysuru were established to sell food and agriculture products.

The ecosystem of Mysuru state:

Some of the best innovative industries and products that benefitted the people were built during the late 18th and early 19th Centuries. Encouraging agriculture and linking its products for industrial production was not only sustainable but also gave holistic growth to the society. With the introduction of various acts like the Panchayat Act, the Compulsory education act, etc., and building institutes and infrastructures, a clear entrepreneurial ecosystem was created for the success of people. From large industries like Bhadravathi Iron Works to Sandal Oil factory and Mysuru Soap Factory to Silk Weaving Factory with public holding to small scale cottage industries, the huge impetus was given for the economic growth of people, region, and allied industries. These generated a large number of skilled jobs.

Did you know that the silk production industry alone employed more than 2 Lakh people per year in different branches?

How would one showcase new products in the 19th century? India’s first trade show, the Dasara exhibition was set up as a trade expo to showcase products and innovation to potential buyers.

Right from raw materials to sales, every aspect of an entrepreneurial journey was taken care of.

Every project or idea that gave an impetus to people’s welfare and empowerment was encouraged and invested in creating a total holistic ecosystem for success. That was the Mysore State that sowed the seed for a successful State and Country.