JUNE 18, 2022
Beyond Imperial Histories
An alternative historical research must be critical of the fi xation with imperial histories.
Kumkum Roy writes:
I
n a recent speech, the Union Minister of Home Affairs
shared his understanding of historical events and recom-
mended certain goals for historians to pursue. Before draw-
ing attention to the alternative historical possibilities that have
emerged and attracted considerable scholarly attention in re-
cent decades, it is important to emphasise that this historical
understanding and objectives are interconnected.
The home minister informed historians that there were several
empires apart from that of the Mughals, and it was necessary to
concentrate on these, providing a list of as many as seven impe-
rial powers, including the Mauryas and the Guptas. About the
Mauryas, he announced that they ruled for 500 years and gov-
erned the entire country from Afghanistan to Sri Lanka. Both
the statements are, unfortunately, wrong. The Mauryas ruled for
about 136 years, and areas like the present-day Kerala, Tamil
Nadu, Sri Lanka, and the North East were not part of the empire.
About the Guptas, we were informed that Samudragupta en-
visioned a united India for the first time. It may be worth con-
sidering how this “unity” was achieved. In his famous inscrip-
tion, the Prayag Prashasti, Samudragupta is described as the
exterminator of kings of Aryavarta. His policy towards the rul-
ers of the south (Dakshinapatha) was different—he captured
them, but reinstated them once they accepted his authority. He
also reduced the kings of the forest, the atavi rajas, to servitude.
Further, he compelled the rulers of parts of Bengal, Assam, Ne-
pal, the north west, and other areas to offer tribute and pay
homage at his court. While these strategies may have been suc-
cessful for empire-building, what it meant for the ordinary peo-
ple and the rulers of these diverse parts of the subcontinent can
only be imagined. Warfare, whatever its objectives, almost in-
variably takes a heavy toll, disrupting the lives of the people
who may have little or no say in the matter, and who end up
paying a heavy price for the ambitious exploits of rulers.
The minister’s anxieties about the absence of scholarship on
Indian empires are also somewhat misplaced. There has been
abundant and diverse scholarship on virtually all the ruling lin-
eages that he has named. To cite just one example, a massive
volume (State, Power and Legitimacy: The Gupta Kingdom, New
Delhi, Primus, 2019), running into over 900 pages, containing
49 articles, has been compiled by Kunal Chakrabarti and Kanad
Sinha. Further, hitherto ignored rulers such as the Ahoms have
now found space even in school textbooks (for example, Our
Pasts, NCERT Class VII, pp 99–100). Also worth keeping in mind
is that scholarship on the Mughal Empire has not necessarily
Economic & Political Weekly EPW JUNE 18, 2022 vol lViI no 25
been hagiographical. There have been critical discussions on a
whole range of policies adopted by the Mughal emperors. To
reduce this rich tradition of scholarship and debate into a nar-
row focus on inclusion or exclusion of specific empires in schol-
arly discourse is unfortunate, to say the least.
Perhaps, more important, even while dynastic histories re-
main significant, recent decades have witnessed a broadening
of the focus on history. As a result, instead of concentrating
oprimarily on ruling lineages and battles, with their inevitable
victories and defeats, other themes have received more atten-
tion. These include economic histories, where historians have
painstakingly reconstructed several structures and processes.
Many of these histories discuss the questions of access to re-
sources, such as land, water, forests, and technologies, and ex-
plore how such access changed over time in different parts of
the subcontinent. There have also been discussions on the de-
velopment of trade networks—both within the subcontinent as
well as beyond—and craft production, among other things.
Other areas that have been investigated pertain to social his-
tories. These include gender relations and the emergence as
well as occasional transformation of caste hierarchies. Scholars
have also focused on regions with alternative, less stratified so-
cial structures. Religious traditions and cultural practices, in-
cluding literary traditions, sculpture, painting, and architec-
ture, etc, have also been examined, leading to stimulating dis-
cussions and debates.
Equally significant are environmental histories that have re-
ceived increasing attention and are likely to become even more
important and relevant as we face the crisis of climate change.
In other words, historical research has moved beyond a focus
on dynastic histories in many directions, and it is to be hoped
that this trend continues in the future.
It is also perhaps somewhat ironical that, in the midst of cel-
ebrating 75 years of independence, which is being commemo-
rated through Azadi Ka Amrit Mahotsav (AKAM) programmes
in institutions and organisations throughout the country, we
seem to be obsessed with empires. Surely, the freedom achieved
in 1947 was significant because it marked a break from the Brit-
ish Empire and the end of colonial rule. It would be a pity if the
opportunity to celebrate this event is reduced to one where we
simply recall the existence of earlier empires in the subconti-
nent. It is time that we move beyond this preoccupation with
empires—past and present—and focus more centrally on re-
constructing the pasts of ordinary people, the vast majority,
7
COMMENT
whose lives, struggles, and achievements are often lost and ig-
nored if we remain fixated on kings and conquests. The chal-
lenge and excitement of reconstructing these pasts await all
those who wish to both celebrate and safeguard the history of
Dissecting the Extraordinary Surge in Corporate Profits
Uneven profits across sectors, input cost pressures, and a rise in interest rates coupled with a weaker rupee could
put the brakes on the pace of firms’ profits.
Radhika Pandey and Pramod Sinha write:
T
he COVID-19 pandemic derailed the economy but acted as
a boon for the listed companies. The steep corporate tax
cut in 2019 and pandemic-induced cost-cutting boosted
the profits of firms. The pandemic year was also the time when
Indian companies repaired their leveraged balance sheets. Due
to the easy monetary policy regime characterised by low interest
rates in financial year (FY) 2020–21, companies deleveraged by
repaying high-cost loans through funds raised via bond issuanc-
es. Repayment of the existing high-cost debt reduced the inter-
est cost and made companies more profitable. Going forward,
the extraordinary surge in profits could see a moderation due to
a rise in interest rates and a weaker currency.
The economic disruptions caused due to the COVID-19 pandemic
led to a slump in the profits of the non-financial firms in the April–
June quarter of 2020. However, with the gradual easing of restric-
tions, the profits of listed non-financial firms showed a healthy
growth in the next quarter (July–September). In the July–September
quarter of 2020, the rise in profits was primarily on account of cost-
cutting, as the sales growth of firms remained in the negative terri-
tory. Firms opted for various cost-cutting measures such as reduc-
tion in salaries, deferring capital expenditure plans, and slashing ad-
vertisement expenses. However, in the next two quarters of FY 2021,
the increase in profits was accompanied by an improvement in
sales. Thus, the increase in profits in the second half of FY 2021 was
on account of an increase in output rather than cost rationalisation.
Although profits have remained robust, rising commodity prices
and building of input cost pressures have caused a moderation
in the pace of the growth of profits in the last three quarters.
With the Reserve Bank of India (RBI) increasing the policy repo
rate, amid sustained inflation and supply-chain disruptions, the
corporate sector could see a further erosion in the profit levels
in the coming quarters.
While the headline profit numbers show a robust growth in
the quarterly financial performance of firms since the pandemic,
two questions beg attention. First, is the strong growth seen in
profits broad-based or is it driven by a handful of sectors? This
requires a deeper sectoral analysis of profits. Second, with the
wholesale price index (WPI) inflation remaining in double digits
for more than a year now, what is the picture on the overall prof-
its after adjusting for inflation?
While the average quarterly nominal profits of listed companies
are reported to have doubled in the eight quarters from June
2020 as compared to the preceding eight quarters, a disaggregat-
ed analysis could present an assessment of sectors that were hit
hard by the pandemic. Nominal growth of profits during a period
8 JUNE 18, 2022
our democracy, and strengthen our understanding of those who
have made it possible.
Kumkum Roy (kumkumr@yahoo.com) is a retired professor at the
Centre for Historical Studies, Jawaharlal Nehru University, New Delhi.
of low and stable inflation provides a true assesment of growth.
However, in the recent months when the WPI has remained elevat-
ed for a sustained period, it is prudent to use a suitable deflator to
express the nominal profit levels in real terms. Such an analysis
could serve as a useful guidepost for policy intervention.
Rather than looking at the growth rate of a particular quarter, it
is useful to do a comparison of the pre- and post-COVID-19 average
real profits (using eight quarters from June 2020 onwards and the
preceding eight quarters). This comparison would give a sense of
those sectors that have staged a smart recovery and those that are
still languishing below the pre-COVID-19 profit levels.
Analysing the inflation-adjusted profits of a common sample of
non-financial, non-oil listed firms for the period from June 2018 to
March 2022 reveals some interesting sectoral variations. Oil and
finance firms are excluded as they follow a different revenue model.
Sectors such as metals and machinery have recorded higher profits
on the back of a strong demand in domestic and global markets as
commodity prices have firmed up. Contact-intensive services such
as hotel and tourism have reported lower profits as compared to
their pre-COVID-19 average. Driven by a slump in consumption, sec-
tors such as food and agro-based products as well as paper and pa-
per products are still below the pre-pandemic average real profit
levels. Due to an increase in metal prices, sectors that use metals as
raw materials such as automobiles, transport equipment, and
transport services saw a shrinking of their profit margins. Sectors
such as textile and consumer goods have posted profits higher than
their pre-COVID-19 average, but the extent of the increase is muted.
Going forward, rupee depreciation coupled with a spike in
global crude oil prices would further inflate the input costs of
companies and erode their margins, particularly those that are
dependent on imported inputs and commodities. However, ex-
port-oriented sectors including labour-intensive sectors like tex-
tiles, garments, footwears and handicrafts could benefit. More-
over, for the benefits of a weaker currency to accrue, the volatil-
ity in the exchange rate needs to moderate. Services like infor-
mation technology also stand to benefit from a weaker curren-
cy. But the sector needs to address its attrition-related woes.
Simultaneously, the rising borrowing costs due to two con-
secutive rate hikes by the RBI will hit the firms’ margins. A sus-
tained rise in interest costs could reverse the deleveraging trend
seen in the last two years.
Views are personal.
Radhika Pandey (radhika.pandey@nipfp.org) and Pramod Sinha (pramod.
sinha@gmail.com) are with the National Institute of Public Finance and
Policy (NIPFP), New Delhi.
vol lViI no 25 EPW Economic & Political Weekly