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Dalmianagar’s Rise and Fall: A Tale of Fortune and Decline

Reported By Umesh Kumar Ray |
Published On :

In the early 1920s, a young and ambitious Ramakrishna Dalmia was yearning to make it big in the business world. Struggling to find his footing, he turned to an unexpected source: a palm reader in Fatehpur, Rajasthan. The palm reader predicted that Dalmia’s fortunes would change dramatically within a month and that he would earn a substantial sum of one lakh rupees.

Fortuitously, a silver deal that was on the brink of cancellation unexpectedly turned profitable, netting Dalmia a staggering 1.5 lakh rupees, equivalent to several crore rupees today. Little did he know that this windfall would not only change his destiny but also transform a remote region in Bihar, more than 1,250 kilometers away.

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Dalmianagar’s Flourishing Industrial Hub

With newfound wealth, Dalmia ventured into expanding his business empire. In 1932, he established the South Bihar Sugar Mills Limited in Bihta, Patna, which was the largest sugar mill in India at the time.

Around 1932-33, Dalmia set his sights on several villages along the Son River in Shahabad, Bihar. Blessed with natural resources like limestone and minerals, a convenient disposal system through the Son River, and excellent transportation connectivity via highways and railways, he acquired these lands and formed Rohtas Industries Limited.

Under this banner, he established numerous industrial units, schools, colleges, private airports, railway lines, and even a power plant to supply electricity. These villages soon became known as Dalmianagar, spreading over a vast expanse of approximately 3,800 acres and earning admiration from people across the country.

Allegations and Investigations

Despite the impressive growth, doubts began to surface about the Dalmia-Jain group’s financial practices. In the early 1960s, allegations of financial manipulation had become widespread, prompting Prime Minister Jawaharlal Nehru to establish an inquiry committee led by Supreme Court Judge Vivian Bose.

The inquiry revealed a range of financial irregularities and malpractices, tarnishing the group’s reputation. Subsequent allegations by MP Firoz Gandhi further eroded public trust in the conglomerate.

The Decline of Dalmianagar

The mid-1960s marked the beginning of Dalmianagar’s decline. Labor unions, sometimes manipulated for personal gains, led to continuous disruptions, causing frustration among the owners. Simultaneously, Bihar’s deteriorating law and order situation, including the Naxalite movement and caste violence, deterred investment and contributed to the area’s downfall.

As Ramakrishna Dalmia grew less active within the group, his successors struggled to manage effectively. The once-prosperous industrial town of Dalmianagar witnessed a gradual downfall.

Efforts to Revive the Industrial Town

Despite multiple attempts to revive Dalmianagar’s industrial units, success has remained elusive. The Supreme Court’s directive in 1990 led to the Bihar government depositing Rs 35 crore to restart the cement factory. While the factory briefly resumed operations, it ceased two years later.

In 2007, Lalu Prasad Yadav’s government purchased land from Rohtas Industries Limited for a proposed freight bogie factory. However, this project faced controversies and eventually stalled.

Today, Dalmianagar stands as a shadow of its former glory, with unresolved issues surrounding the liquidation of the company, unpaid dues to former employees, and uncertain plans for the land’s future use by the Indian Railways.

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Umesh Kumar Ray started journalism from Kolkata and later came to Patna via Delhi. He received a fellowship from National Foundation for India in 2019 to study the effects of climate change in the Sundarbans. He has bylines in Down To Earth, Newslaundry, The Wire, The Quint, Caravan, Newsclick, Outlook Magazine, Gaon Connection, Madhyamam, BOOMLive, India Spend, EPW etc.

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