A new biography of John Matthai discusses his policy contributions in the early years of independent India

Matthai’s years at Tata were his happiest, his several stints in government less serendipitous. The prickly, principled Matthai did not last very long in any post because of his intransigence and independence. His most famous fall-out was with Prime Minister Jawaharlal Nehru over the Planning Commission. Nehru, impressed by Matthai’s wealth of experience in business, administration and academics, invited him to join the first cabinet as a representative of the Christian community. Matthai became railway minister. It was the worst possible time, World War II having weakened the economy and Partition having wreaked havoc. Matthai was given the thankless job of partitioning the railways between the two new countries in less than eight weeks. The railway minister was often at loggerheads with home minister Sardar Patel, who wanted to run more trains, while Matthai felt that the overriding priority for evacuation trains was for the Army and police to protect the trains carrying
fleeing migrants.

When India’s first finance minister Shanmukham Chetty, Patel’s choice, resigned, Matthai was appointed in his place. It was not a propitious start. Matthai’s first budget was generally panned as being pro-rich and inequitable, with high postal hikes and levy on coarse cloth. He was also caught off-guard by the devaluation of the pound, taking at face value the British government’s official assurance that the pound, to which the rupee was pegged, would not be demonetised. But it was Matthai’s differences with Nehru which brought matters to a head. Nehru, inspired by Fabian Socialism and the Russian example, wanted direct control over the planning process. Though a student of the Fabian socialist Sydney Webb, Matthai, who had first-hand experience in the business world, was more concerned about conserving the economy, especially in view of the stringency of resources, rather than redesigning it. He apprehended that the Planning Commission would emerge as a parallel Cabinet with its deputy chairman exercising more power than the finance minister. While submitting his resignation, Matthai was stiff and unbending. Nehru felt hurt by what he considered Matthai’s discourteous behaviour when he was trying to placate him. In hindsight Matthai’s apprehensions proved to be well-founded and there were repeated economic crises in the country over the next decades.

Erosion of control was an issue which exercised Matthai greatly. Years later when he was appointed vice chancellor of Bombay University, he objected to governors of states being ex-officio chancellors of universities. He was rather aggressive with the gentlemanly governor of Bombay state, Sri Prakasa, who had newly arrived. The principle he was fighting for to protect academic freedom from political interference was very valid.

Historians and economists will gather much insight from Dadabhoy’s accounts of Matthai’s finance and railway budgets and the report of the Taxation Inquiry Commission, but the subjects could be heavy going for an average reader. The Matthai family is full of achievers. His son Ravi was the first director of the IIM Ahmedabad, his nephew Verghese Kurien became the father of the milk revolution, having landed up in Anand quite by coincidence. One would have preferred more insight into the personal life of Honest John, a nickname given incidentally by Nehru. Unfortunately, Matthai seems to have destroyed most of his private and official papers.

The author is contributing editor, The Indian Express