The Regime of Capital Accumulation, the Hindu Undivided Family and the Business Group in Independent India

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.