Hyderabad State Mir Osman Ali Khan

2Q: Give an account of Mir Osman Ali Khan’s administrative reforms? – Read

How Mir Osman Ali Khan modernized Hyderabad State? – Read

Ans: Mir Osman Ali Khan, the seventh Nizam, the maker of modern Hyderabad evokes extreme passions. But, so immense are his contributions to the city that no one is immune to his greatness. Even his detractors grudgingly acknowledge the role he played in giving Hyderabad the infrastructural head-start.

Some call him narrow minded, some communal, and a few dub him a miser. But, the last of the Asif Jahi rulers defies definition. The Nizam, whose 50th death anniversary falls on Friday, is best remembered as the architect of modern Hyderabad. One just couldn’t gloss over his vision in developing a planned city. His 37-year old rule saw the expansion of roadways, railways, and postal services. Industries such as the Shahbad cement factory and Nizam sugar factory were set up during his time.

All the important buildings that one sees in Hyderabad were the result of his enlightened policies. The High Court, Assembly Hall, Osmania General Hospital, Nizamia Unani Hospital, Nampally railway station, Jubilee Hall, Osmansagar, Himayatsagar – the list is endless. The Osmania University remains the Nizam’s greatest contribution to education.

What’s more, many revolutionary reforms found their way into the princely Hyderabad State much before they were adopted by the British India. For instance the ban on ‘begar’ (forced labour) was made during the birthday of Osman Ali Khan on March 20, 1922 while the ‘farman’ separating judiciary from the executive was issued on May 8, 1921. He is generally perceived to be an autocratic ruler, but can one dismiss facts which speak otherwise?

This benevolent miser was generous with his money for the right cause-be it for Muslims or Hindus. In fact he proclaimed them to be his ‘two eyes’. Many educational institutions benefited from his liberal donations. Even institutions outside the country profited from his largesse.

He would use the 185-carat Jacob diamond as a paperweight and at the same time settle for a sherwani with torn collar. That’s the enigma the last Nizam was.

Stories of his frugal habits are dime a dozen. Once during a chilly winter night he sent his ADC to buy a blanket. But, he puts a rider that the price should not exceed Rs 25. Soon the ADC returned crestfallen and informed that the minimum price of a blanket was Rs 35. The richest man of his times dropped the idea and decided to make do with his old blanket.

But a few hours later a request came from the Maharaja of Bikaner seeking donation for the Benaras Hindu University. Without thinking twice he ordered a sanction of Rs. 1 lakh. Sounds incredible. That’s the way the Nizam functioned.

Of course one can’t overlook the atrocities perpetrated by the Razakaar movement and the vicious influence exercised by its leader, Kasim Rizvi, on the Nizam. But, this doesn’t take away the good work done by him. His Exalted Highness ceased to be the Nizam of Hyderabad in 1948 when the State acceded to the Indian Union following the Police Action. But as a gesture of goodwill he was appointed the Raj Pramukh, a position he held from January 26, 1950 to October 31, 1956.

On February 24, 1967 at the age of 81, the Nizam passed way. And with this the prophesy of sufi saint, Hazrat Nizamuddin, came true that the Asif Jahi descendants would rule over the Deccan for seven generations.

Industrial Development:

Industrial Development During Asafjahi Period

Industrialization was commenced in Hyderabad state before independence itself and wide range of industrial goods being produced in Hyderabad. Considerable development in industry was made possible by the distinctive role played by the state in making available infrastructural facilities for its growth.

By that time Hyderabad state was having

4% of India’s population,

3% of India’s factory labour,

7% of factories

6% of paid up value of Hyderabad’s capital in corporate sector,

4% plus share in India’s in cotton, matches, sugar, liquor, coal, cement and other products.


The industrial growth of Hyderabad can be traced in 3 distinctive phases.

Phase 1 1870s -1919 Started by Diwan Sir Salarjung I and ended after World War 1.
Phase 2 1919 – 1939 The period between two world wars.
Phase 3 1939 – 1948 This phase was ended with the end of Nizam’s rule.


First Phase  1870s to 1919

This division was made based on the role of the state in industrial development by partial patronage through ITF – Industrial Trust Fund. Industrial development was purely private enterprise in rest of the British India at that time.

The reforms during the reign of Diwan Mir Turab Ali Khan Salarjung I, in the fields of society, economy through cultivation of commercial crops, transport system, education, administration, and activeness of public work department pawed way for the development of industrialization in Hyderabad state.

Cotton crop was cultivated in Maratwada region and Oil seed crops were grown in Telangana.

In 1899, Hyderabad – Godavari valley was opened to Manmad railway line. This helped in establishing cotton and related ginning and pressing mills in those areas. During this period 1877 silk and weaving mills Ltd,

1884 Mahaboob Shahi Gulbarga Mills,

1888 Aurangabad Mills were established.

Further, the opening of railway line from Dornakal Junction to Singareni Collieries helped to transport coal from Singareni.

By 1901, there were 68 large industrial establishments of all kinds employing an average daily labour of ten or more. (680 plus workers)

Between 1911 – 1921, the number of industries increased to 200 and employed 24,857 persons.


Second Phase 1919 – 1939

Nizam state started providing institutional support to industries. Financial and technological aid by the State resulted in the development of local industry, both small scale and large scale sectors.

1917 – Industrial Laboratory was established to undertake research and development work.

1918 – Separate CID – Commerce and Industries Development was established.

1929 – ITFIndustrial Trust Fund was created with the corpus fund of 1 crore initially and later it was increased to 3 crore. Its establishment is a land mark in the history of Industrialization in Hyderabad state.

This fund was invested in large industries in the form of shares and debentures, and as loans for small scale industries.

The income from these investments was used for the development of cottage and small scale industries, initiated research, provided training to students through scholarships and encouraged businessmen to produce goods on improved methods and sponsored research centers and market centers. The ITF also acted as a managing agent for a number of companies in the State.

Government also provided market facilities to artisan industries.

In 1856 itself Industrial Exhibition, Numaish, was started. 1930 onwards, Nampalli was chosen as the permanent place for the exhibition. Numaish was started by Diwan Mir Turab Ali Khan Salarjung I and Nizam conducted many such exhibitions in Indian and abroad. The Osmania University Graduates Association conducted this exhibition with the assistance of the State, also published a journal, Mulki Industries for encouragement of small scale industries.

In later years CII, Cottage Industries Institute was also organized with its own sales depot for the encouragement of the industries. The depot acted as an intermediary between village artisans and consumers.

Nizam State Railway was the completely State owned railway in Hyderabad State. It had the Mechanical Road Transport Service and Civil Aviation under its wings.

Late 1930s – Hydro – electric power generation from Nizam Sagar canal was started.

By 1938 – 39 – Power generated reached to 20 KW.

1917-1919 – Coal production was 0.65 Million tons.

1936 – 1938 Coal production was increased to 1 Million tons.

1931 – Large industrial establishments were increased to 387.

(By 1901 – 68 industries, By 1921 – 200 industries)

In the corporate sector (Joint Stock Companies) 3 Text tile mills, 2 Cigarette factories (Charminar and VST), 2 Glass factories, and 1 Sugar Factory, were established. The sugar factory established at Bodhan under Nizam Sagar Project was the biggest in Asia at that point of time.

Oil, Rice and Flour Mills, small – scale motor and engineering workshops, botton factories, matches and tanneries increased substantially.

DBR Mill 1920 – Diwan Bahadur Ramgopal Mill was established on 14th February 1920 at Lower Tank Bund in Hyderabad by Diwan Bahadur Ramgopal with the encouragement of the Nizam Government. It was cotton industry producing the cloth from the raw material brought from outside.


Third Phase 1939 – 1948

During this phase Nizam Mir Osman Ali Khan made all possible attempts to bring changes in the Industrial policy resulting in establishment of many industries.



List of Major Industries established in 2nd and 3rd Phases
1 Karkhana Zinda Tilismat 1920
2 Singareni Collieries, Khammam 1921
3 Charminar Cigarette Factory 1925
4 Vazir Sultan Tobacco Company 1930
5 Azam Shahi Mills, Warangal 1934
6 Nizam Sugar Factory, Bodhan 1937
7 Alwyn Metal Works 1942
8 Praga Tools 1943
9 Sirsilk 1946
10 Deccan Airway Limited 1945
11 Hyderabad Asbestos 1947


Singareni Collieries 1886 – 1921 – 1945 – 1949

The Hyderabad (Deccan) Company Limited incorporated in England acquired mining rights in 1886 to exploit coal found in Yellandu area. The present Company was incorporated on 23 December 1920 under the Hyderabad Companies Act as a public limited company with the name ‘The Singareni Collieries Company Limited’ (SCCL). It acquired all the assets and liabilities of the Hyderabad (Deccan) Co. Ltd. Best & Co., acted as Secretaries and Selling Agents. The State of Hyderabad purchased majority shares of the Company in 1945. Planned at the village Singareni in Khammam dist., where coal mines were first discovered.

The Hyderbad Deccan Mining Company, a London based firm began extracting coal at the Singareni Coal fields.


Nizam Sugar Factory 1937

It is situated at Bodhan in Nizamabad district.


Allwyn Metal Works

Estd. January 1942. Joint venture of ITF and Alladin Company.


Praga Tools –

Estd. May 1943 as Praga Tools Corporation Ltd. @ Kavadiguda, Hyderabad. In 1963, it was renamed as Praga Tools and handed over to Defence Ministry.



Sirsilk 1946

Paper Mill was established at Khagaznagar, Adilabad. Khagaznagar was established by 7th Nizam. The paper mill was named as Sirpur Paper Mills – SPM. Sirpur was the capital of Khagaznagar.


Hyderbad Asbestos 1946

Established on 17th June 1946.

Produces Cement Sheets. It was later renamed as Hyderabad industries.


Charminar Cigarette Factory 1925 and Vazir Sultan Tobacco Company 1930

Estd. By Vazir Sultan in 1916 at Vittalwadi. Later it was shifted to present VST in 1930. Charms, Charminar, Charminar and Gold Moments are its products. On the advise of Mokshagundam vishweshwarayya, Two hundred acres of Mushirabad – Azamabad area was selected and reserved for industries in 1930. Nizam gave concession in land, power and water facilities to run the industries.


Karkhana Zinda Tilismath 1920

Initiation was taken by well known Hakeem Late Mohammad Moizuddin Farooqui.

Products: Zinda Tilismath, Farookhy tooth power, and Zinda Blam.


Azamjahi Mills, Warangal 1934

Important textile mill established at Warangal.


Deccan Airway Limited 1945

Commercial Airline founded in Hyderabad as the joint venture of Nizam Government and Tata Airlines. It was launched with a fleet of 3 aricrafts. In 1953, it was merged with Indian Airlines.


Hyderabad State Bank

Hyderabad State Bank was the own bank of Mir Osman Ali Khan. A 100 rupees note was introduced in 1918. Estd. 1941 by Mir Osman Ali Khan. Later it was renamed at Hyderabad State Bank and later as State Bank of Hyderabad. Now it is merged with SBI. Hyderabad was the only state in British India, which was allowed to mint its own currency. Hyderabad State Bank managed ‘Hyderabadi Sicca’ and Hyderabad rupee.


2 September1948 – Operation Polo.

17 September 1948 – Nizam Surrenders.

24 November 1949 – Officially Hyderabad became part of India.


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