Déjà View | The Chetty affair
Was R.K. Shanmukham Chetty, the first victim, if you will, of an Indian cabinet shuffle/kerfuffle, justifiably ousted?
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I love cabinet reshuffles. I love the tingling tension before one, and the frenzied media analysis afterwards. Who got snubbed? Who got upped? Who got demoted upwards? What does this mean for foreign policy? For education? Would Patel approve of this reshuffle? Has Maria Sharapova heard of cabinet reshuffle? Has (air-quote open) Tendulkar (air-quote close) written about reshuffle? Et cetera et cetera.
It is that rare moment of structural turbulence in an institution that is otherwise ponderous and deliberate. It is like watching slow, boring elephants for months. And then going to a circus and suddenly seeing one standing on its hind legs and shaving a clown with a giant rubber razor. Good times.
Of course, cabinet reshuffles are not a new phenomenon to the republic. The very first cabinet of free India—formed on Independence Day—saw seven names leave before it completed its first term in 1952. Sardar Patel, of course, passed away in 1950. Rajaji (C. Rajagopalachari) replaced Patel as home minister but then quit in 1951 after differences with Jawaharlal Nehru, as did John Mathai in 1948. Shyama Prasad Mukherji and K.C. Neogi both resigned in protest after the signing of the Nehru-Liaquat pact in 1950. B.R. Ambedkar resigned in 1951 following opposition to his draft of the Hindu Code Bill. The seventh member to leave India’s first cabinet, and the only one who was *asked* to do so, was R.K. Shanmukham Chetty, India’s first minister of finance. The fact that Chetty was asked to leave is more or less widely known. What is less clear is the precise chain of events that led to Chetty’s exit. The one thing that is clear is that Chetty’s ousting was closely linked to how he became a member of cabinet in the first place.
In his book India After Gandhi, Ramachandra Guha writes that Chetty, “who possessed one of the best financial minds in India”, was one of a few ardent adversaries of the Congress who were made members of Nehru’s first cabinet. Guha attributes this to Nehru’s desire for a unity cabinet that expressed all views.
But the memoirs of M.O. Mathai tell a different story. Mathai was Nehru’s assistant for many years before he was hounded out by allegations of being an American spy. (Allegations that have persisted even after Mathai’s death in 1981.)
Mathai says that John Matthai (no relation) and not Chetty was Nehru’s original choice as finance minister. But Nehru, he claims, changed his mind after Sardar Patel intervened.
Patel’s grouse with John Matthai was that the latter, an economics professor and once a director with the Tata group, had persuaded Nehru to set up an Income Tax Investigation Commission (ITIC) to look into tax evasion by Indian companies during the war period. Patel apparently felt that this was just a means of harassing legitimate businessmen.
“Patel knew,” Mathai writes, “that Chetty would be pliable and do his bidding.” John Matthai was shunted out and R.K. Shanmukham Chetty was brought in. Gita Piramal recounts this episode in her book Business Legends and puts it in the context of the life of Gujarati businessman Kasturbhai Lalbhai, one of several businessmen who opposed these tax investigations.
There are two versions of what happened next. Both involve favours for “mill-owners”. Both end in Chetty’s ouster. The tax investigation, by most accounts, unearthed a phenomenal amount of dirt on several Indian companies. Unpaid taxes ran into thousands of crores. And some of the evaders were very high profile indeed. With more and more companies falling into the ITIC’s net, Chetty, from a mill-owning family himself, may have helped some of his friends. In 1949 the Free Press Journal newspaper published a story hinting at Chetty’s role in striking some names off the investigation list. The simmering issue was hurriedly discussed in two cabinet meetings. Both meetings appear to have let off Chetty with mild rebuke but nothing more. It should have died there. But then Chetty was never popular with several Congressmen. They pestered Nehru who eventually asked Chetty to quit in August 1949.
But Nehru’s assistant writes of a second, wildly controversial version of this story. According to M.O. Mathai’s Reminiscences of the Nehru Age it wasn’t Chetty who tampered with the list, but Sardar Patel who “persuaded Shanmukham Chetty to delete a few names of Gujarati businessmen and industrialists from the list”. An uproar followed and Patel “kept quiet and let down the man who did his bidding”. So Chetty was not the bad guy, in this version, but the fall guy.
Which version is true? I am heavily inclined towards the former. Not least because Mathai’s memoirs have more than a hint of score-settling and sensationalism in them. Whatever be the truth, with this turn of events came to an end the cabinet career of R.K. Shanmukham Chetty. The first victim, if you will, of an Indian cabinet shuffle/kerfuffle.
Note: Apropos last week’s column, reader T.C.A. Srinivasa Raghavan writes that the RSS chose khaki shorts because there was plenty of surplus war fabric going around. And my Mint colleague Niranjan Rajadhyaksha suggests that the uniform may have been inspired by Hedgewar’s admiration of the scouts movement.
Every week, Déjà View scours historical research and archives to make sense of current news and affairs.
Comment at firstname.lastname@example.org. To read Sidin Vadukut’s previous columns, go to www.livemint.com/dejaview