Abstract
The chapter addresses the issue of capital accumulation in the Hindu Undivided Family (HUF) and the business groups in India since independence. The organization of the ‘business house’ found legal sanction through multiple legislations spanning corporate and tax laws and forms the object of studies in ‘corporate governance’. The chapter argues that, it is the dual existence of the HUF as both a family and a firm that makes it distinct from all other institutional categories. It discusses the channels through which family control over the organizational structure of business groups and the ownership of wealth by the family generated through these structures are maintained. The interlocking of the caste Hindu patriarchal family with corporate governance institutions is formally embedded in law in India. It is the materiality of capital that forges the social entity of the family owned business group. This materiality is formally legally embedded in the seamless interlock of the firm and the family where the firm becomes the family in the case of the HUF. This spans state codification of Hindu family law, corporate governance laws and taxation laws. The chapter further argues that, it is capital in its material social role in the circuit of financial and capital flows, which drives the network of institutions that constitutes the ‘family owned business group’ in India legally. This is formally undergirded by caste, patriarchy and religion. Moreover, it shows that, this unique legal family/firm interlock is not available to Muslims, Christians, Parsis or Jews and hence constitutes a perverse legal privilege to the Hindu family.
This chapter is an extended and updated version of the publication of our paper Das Gupta and Gupta (2017) The Hindu Undivided Family in Independent India's Corporate Governance and Tax Regime, SAMAJ 15. This earlier publication from 2017 is under a creative commons license. This chapter presents case studies in Sections 2.2 and 2.3 which are different from the ones in the 2017 article. The macro-level tax data analysed in Section 2.3 is updated till 2018 in this chapter. In the 2017 article, the data was upto 2012-13 in some cases and 2014-15 in other cases. However, the premise and the main arguments have significant overlap in both the publications. I am grateful to Mohit Gupta for his help with the tax data updation for this chapter.
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Das Gupta, C. (2023). The Regime of Capital Accumulation, the Hindu Undivided Family and the Business Group in Independent India. In: Chakraborty, A., Chakraborty, I. (eds) Indian Business Groups and Other Corporations. India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-99-5041-6_2
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DOI: https://doi.org/10.1007/978-981-99-5041-6_2
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