The paradox of the last Nizam of Hyderabad

When Time magazine put him on its cover in February 1937, it wasn’t merely for his headline-grabbing $2 billion fortune—greater than the combined wealth of the Rockefeller family and Andrew Carnegie. It was for the paradox he embodied: a man who could bankroll Britain’s war chest with a $100 million donation yet personally mend his own clothes; who built hospitals and universities but tried to defy the logic of India’s independence.

A ruler of immense wealth, and unexpected restraint

In the 18th century, the Hyderabad state was among the world’s few diamond suppliers. When Osman Ali Khan ascended the throne in 1911, he inherited not just a kingdom but a legacy of immense gem wealth. Though the famed Golconda mines had dwindled by then, they had produced legendary stones like the Hope Diamond, Koh-i-Noor and Regent Diamond—cornerstones of the Nizam’s staggering fortune.

Contemporary reports say the famed Jacob Diamond, a 280-carat D-flawless stone worth over ₹1,000 crore today, served casually as his paperweight—a display of wealth that could make even today’s tycoons wince.

Yet Osman Ali Khan’s story diverges sharply from the usual tales of Indian princes drowning in excess. While his peers collected fleets of Rolls-Royce cars and built pleasure palaces, he was methodically transforming Hyderabad into India’s most progressive state.

Under his rule, the state boasted more railway lines per square mile than British India, introduced electricity before some European cities, and ran budget surpluses while funding massive infrastructure. He founded Osmania University in 1918, making it one of India’s first to teach in a local language (Urdu) rather than English, a quiet challenge to colonial orthodoxy. He even enlisted engineering legend M. Visvesvaraya to design a flood-control system for Hyderabad, long prone to devastating floods from the Musi River.

His philanthropy was just as systematic. The Nizam funded more than 400 educational institutions, numerous hospitals, and countless public works. Unlike the performative charity of many royals, his giving was structured. He earmarked fixed portions of state revenues for education, healthcare and infrastructure year after year.

Yet this titan of wealth lived like a frugal clerk. He wore the same plain cotton kurta and pajama for days, often visibly patched and darned. His meals were simple dal, rice and vegetables served on banana leaves, even as gold and silver platters gathered dust in storerooms. He personally reviewed major expenses, and European visitors were often bewildered to see the world’s richest man poring over household accounts with the diligence of a small-town merchant. This wasn’t affectation. The Nizam seemed to intuit what behavioural economists now confirm: that beyond a certain point, personal consumption offers diminishing returns.

The miscalculation that ended an empire

But the tale curdled in 1947. As India’s independence neared, the Nizam misread the shifting balance of power. He explored the idea of joining Pakistan, hired lawyers in London to plead for Hyderabad’s independence at the United Nations, and resisted joining the Indian Union. It was a desperate last act.

The end came swiftly in September 1948, when home minister Sardar Vallabhbhai Patel sent Indian troops to annex the state. Osman Ali Khan was removed from power, and Hyderabad became part of independent India. It was a tame end to a dazzling reign.

In an era when Indian business tycoons—with rare exceptions—often prize wealth accumulation over social responsibility, the Nizam’s life offers both inspiration and warning. His commitment to public welfare and infrastructure prefigures modern corporate social responsibility, and his belief that personal frugality could amplify public impact resonates amid today’s debates on wealth inequality.

Yet his downfall underscores a hard truth: even unimaginable wealth cannot shield one from the sweeping currents of history.