Nakarattars of Tamil Nadu are example of
(A) Indigenous trading networks
(B) Caste based banking system of Chettiars
(C) Indigenous capitalism
(D) Pre-capitalist market system
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (B) and (C) only
(A) Indigenous trading networks Correct. Pre-colonial India had indigenous merchant groups, trading networks and banking systems. Trade took place within the caste and kinship networks of these communities, so a hundi (bill of exchange) issued by a merchant in one place was honoured by a merchant elsewhere. The Nattukottai Chettiars, or Nakarattars, of Tamil Nadu show how such networks worked.
(B) Caste based banking system of Chettiars Correct. The Nakarattars loaned and deposited money with one another in caste-defined social relationships. Public confidence came from the reputation and shared reserves of the caste, not from a government-controlled central bank; in other words, the Nakarattar banking system was a caste-based banking system.
(C) Indigenous capitalism Correct. Their banks were joint family firms, and caste and kinship networks carried their business into Southeast Asia and Ceylon. In one view, the economic activities of the Nakarattars represented a kind of indigenous capitalism, a form of capitalism apart from the one that arose in Europe.
(D) Pre-capitalist market system Incorrect. A pre-capitalist market is one of simple exchange that comes before capitalism. The Nakarattars ran extensive banking and long-distance trade, which is why they are described as a kind of capitalism, not as a market from before it; the line between ‘pre-capitalist’ and ‘capitalist’ economy is itself shown to be fuzzy.
Note: In the chapter ‘The Market as a Social Institution’, the paragraph on the Nattukottai Chettiars (Nakarattars), which calls their economic activities ‘a kind of indigenous capitalism’, was there in the pre-rationalised NCERT, which NTA followed in 2023. It has been deleted from the NCERT book (2025-26), though the chapter is still there with Box 4.2 on the caste-based banking of the Nakarattars.
NCERT (2025-26): “4.1 Sociological Perspectives on Markets … So it is not surprising that precolonial India had well-organised manufacturing centres as well as indigenous merchant groups, trading networks, and banking systems that enabled trade to take place within India, and between India and the rest of the world. These traditional trading communities or castes had their own systems of banking and credit. For instance, an important instrument of exchange and credit was the hundi, or bill of exchange (like a credit note), which allowed merchants to engage in long-distance trade. Because trade took place primarily within the caste and kinship networks of these communities, a merchant in one part of the country could issue a hundi that would be honoured by a merchant in another place.” NCERT (Pre-rationalised): “…The Nattukottai Chettiars (or Nakarattars) of Tamil Nadu, provide an interesting illustration of how these indigenous trading networks were organised and worked. A study of this community during the colonial period shows how its banking and trade activities were deeply embedded in the social organisation of the community. The structures of caste, kinship, and family were oriented towards commercial activity, and business activity was carried out within these social structures. As in most ‘traditional’ merchant communities, Nakarattar banks were basically joint family firms, so that the structure of the business firm was the same as that of the family. Similarly, trading and banking activities were organised through caste and kinship relationships. For instance, their extensive caste-based social networks allowed Chettiar merchants to expand their activities into Southeast Asia and Ceylon. In one view, the economic activities of the Nakarattars represented a kind of indigenous capitalism. This interpretation raises the question of whether there are, or were, forms of ‘capitalism’ apart from those that arose in Europe (Rudner 1994).”
Box 4.2 (NCERT 2025-26) |
