The Kerala Model: The Stories Within

Kerala in Map of India

The Kerala State’s Economic Review 2020 blandly claims that the State’s development outcomes are comparable with the most developed countries. Is this true? Has Kerala’s progress in economic indicators since independence been superior to that of other States? To what extent are the State’s historical, geographical, social, and cultural factors responsible for its superior outcomes? Didn’t countries and regions with similar characteristics have similar and perhaps better outcomes? We examine these questions and are led to conclude that the ‘Kerala Model’ is less a model and more an experience. Continue reading “The Kerala Model: The Stories Within”

Reserve Bank of India Quiz 2021

Wish all the readers of ‘Tiger and Palm Tree’ season’s greetings and best wishes for a happy new year. Please see below the questions in Reserve Bank of India Quiz 2021. I will post the answers next week.

Continue reading “Reserve Bank of India Quiz 2021”

Sir Everard Hambro’s central bank proposal

Sir Everard Hambro
Sir Everard Hambro

In the history of Indian currency and central banking, the Fowler Committee occupies an important position. But, its relevance went beyond the currency question. One suggestion that emanated from its report was Sir Everard Hambro’s central bank proposal. Hambro suggested establishing a state bank along the lines of the Bank of England and the Bank of France. Hambro’s central bank proposal is contained in a brief note attached to the Fowler Report. It provided the rationale for the proposal. The suggestion went back and forth between Calcutta and London before it was dropped after objections from different quarters. Continue reading “Sir Everard Hambro’s central bank proposal”

“Policy Maker’s Journal” by Kaushik Basu

Policy Maker's Journal by Kaushik Basu
Kaushik Basu and his book

Prof. Kaushik Basu in his “Policy Maker’s Journal” describes an incident where he and three friends, on a holiday in Cusco, Peru, were walking back to their hotel through deserted streets, when they saw a native girl, sitting alone and crying. Her mother had made her wait while she went home to fetch something. It was getting late, and she was hungry. But, they found food in her bag, and asked her to eat that. She said that they were for sale, and not for eating. They then bought some food, and gave her. We will never know whether she ate it. But, Kaushik was left “with an awareness of the human predicament that reading books and guzzling statistics cannot give.”

With such anecdotes, Prof. Kaushik Basu, Carl Marks Professor of International Studies at Cornell University, illuminates the account of his six-year foray into policy making. This included two years, 2010-12, as Chief Economic Adviser to the Government of India. The next four years were with the World Bank as Chief Economist.

Meeting Prof. Kaushik Basu

I first met Prof. Basu at a common friend’s house over dinner. A great conversationalist, he expressed an interest in knowing more about how currency in circulation was calculated. As someone who started his career in the currency vaults of the Reserve Bank of India, I was glad to oblige. But, that discussion never happened. Instead, he accepted an invitation to chair a half-day conclave that I helped organise at the New Delhi Office of the Reserve Bank. After he gave a convenient time, the other slots filled up soon. Finally, we had TN Ninan from Business Standard, TCA Anant, the Chief Statistician, and Ulrich Bartsch, then Head of World Bank’s Delhi Office. Prof Kaushik Basu delivered the keynote address and stayed with us for lunch thereafter.

We remained in touch for some time, for reasons other than the economy. He was intrigued by the then Tamil hit, Why this Kolaveri di? I realized much later that my laboured explanations of the song were unnecessary. I had forgotten that he had a Tamil connection through his wife, and did not need my interpretation (I had met once his co-brother in Hong Kong, in 2005). But, he sportingly played along.

Kaushik Basu was always quite dignified in his interactions and polite to a fault. I did not, therefore, waste the invitations he extended for the two Delhi Economics Conclave that he organised, and his book releases. One of them was the release of the two-volume New Oxford Companion to Economics in India, with Annemie Maertens, at the India International Centre.

Policy insights

Prof. Kaushik Basu shares many moments of learning, apart from the first anecdote. This includes his meetings with Kenneth Arrow, John Nash, and other great contributors to economics and finance. There are also embarrassing moments, like someone introducing him to an audience as one tipped to win that year’s Nobel Prize.

The book provides many instances where he contributed his insights to the policy discourse. This includes his stance on the different types of rights that were being promoted by the UPA government. According to him, such rights are meaningless unless if the government is capable of providing them. Another instance was his paper on dealing with corruption, where he suggested that bribe giving be decriminalised when it is paid to get legal things done. This would help bring out such cases. The proposal perhaps had a flaw in that the practical implications were not thought through. Nevertheless, it created a furore at a time when various scams were hitting the headlines, and died a slow death.

The humble and upright Kaushik Basu

There are numerous anecdotes where the basic humaneness and humility of Kaushik come through. One favourite is where he had to sit through a quiz. Two questions on who wrote a particular book had the same answer, Kaushik Basu. He was, no doubt, pleased and proud. But, the realization that nobody, even the audience, knew the answer, brought him back to earth. Kaushik is quick to acknowledge the contributions of others, including former students, colleagues, teachers, and fellow economists.

The Policy Maker’s Journal refers to instances of Prof. Basu’s uprightness and frankness. Like when he advised the new Finance Minister, Arun Jaitley, that he call on Manmohan Singh before his first budget (Jaitley did). Or when he denied admission to the Vice Chancellor’s daughter at the Delhi School of Economics. How he ignored Sheryl Sandberg’s suggestions to drop unflattering references to Facebook in the World Development Report. Or how he ignored gentle suggestions from Pranab Mukherjee, then Finance Minister, pushing a certain (unnamed) candidate as Vice Chancellor of Santiniketan (The FM did not mind).


Apart from the Delhi Economics Conclave, his achievements included the Stockholm Statement as a counter to the right-wing Washington Consensus. Apart from decriminalising bribe paying, the unfinished initiatives included a Living Life Index, somewhat different from the Ease of Living Index since introduced. Among the misses is perhaps a discussion on the gross national happiness during his Bhutan visit.

Some misgivings

Kaushik Basu’s “Policy Maker’s Journal” is not without instances where one hoped for more clarity and elaboration. After his first meeting with Prime Minister Narendra Modi, by when he was with the World Bank, he “left his office feeling good.” But, a few months later, he advised President Obama to remind India’s leaders of its heritage of democracy and secularism, and “urge them to preserve it.” The new government was just a few months old. Obama was the Chief Guest at the Republic Day parade. In one of his last engagements, a lecture at the Siri Fort, he did “remind India of its heritage of democracy and inclusiveness, and how some shadows had been cast on this in recent times.” This did raise a furore, and not just for the political incorrectness.

In the interest of completeness, Basu could have spelt out what made him change his view after that first meeting with the Prime Minister which he left feeling good. Even in the absence of the Obama episode, an update on his views of 2014 is left hanging when published in 2021. This would have made many admirers happy that it was not just another off the cuff remark. Hopefully, Prof. Basu is keeping this for a later book.

Kaushik Basu and the Congress

Prof Basu does not conceal where his political sympathies lie. In his last meeting with Sonia Gandhi as CEA in mid-2012, they had frank discussion on various political leaders. This included Mamata Banerjee, Narendra Modi, Subramaniam Swamy, the communists, and the RSS. He confesses to having political views that are aligned to hers.

Prof. Basu lists three important qualities of Rahul Gandhi which would make him a good leader, though he is not a natural political leader. First, honesty and transparency. Second, that he is a good listener. Third, he is not infatuated with power, and is willing to give it up gracefully.

In my view, the majority in the country would not consider these as sufficient conditions in their conception of a future Indian leader. The era where anyone can be catapulted into positions of power on sheer strength of political lineage has passed. Those who remain had either proved themselves earlier in ministerial positions, are heading unstable alliances awaiting their political denouement, or for a more robust and credible political formation to come up. The majority would yearn to see hard evidence of performance and delivery rather than distant promises based on assumed qualities. Considering this, Rahul Gandhi perhaps erred in letting pass invitations to join the Manmohan Singh cabinet and prove himself like Indira Gandhi who gained experience and confidence serving in the Nehru cabinet.

The above is, however, key to Prof Basu’s meetings with the Congress leader whenever the latter wanted, and his addresses exclusively for Youth Congress leaders and Congress MPs. These would have been unprecedented for a government functionary even if he were on a fixed term appointment. One cannot recall another CEA, before or after, addressing a political audience solely of one hue.


The Policy Maker’s Journal is a great read with the Kaushik-esque take on many issues, his understated humour, and restrained sarcasm, often self-deprecating. I enjoyed reading the book notwithstanding a few minor errors (2020 instead of 2012), names of people presumed to be known, and a few points of disagreement. I am already looking forward to the next big one.

Kaushik Basu, Policy Maker’s Journal – From New Delhi to Washington, D.C., Simon & Schuster, 2021. Rs. 699.

© G. Sreekumar 2021.

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History of Indian Currency: The Fowler Committee

Sir Henry Hartley Fowler

Five years after it implemented the Herschell Committee recommendations in 1893, the Government of India made fresh proposals. The British Government, in turn, appointed the Fowler Committee in 1898 to examine these proposals.

In 1893, as endorsed by the Herschell Committee, and approved by the British Government, the Indian Government discontinued silver coinage. The intention was to eventually introduce a gold standard, the most important step in ensuring an exchange rate of 1s. 4d. This was not achieved for nearly five years. Therefore, the Government of India submitted fresh proposals to the Secretary of State for India to hasten the process. Some of these were drastic. These included the sale of bullion worth £ 6 million. There was also to be a sterling loan issued to make good the loss. Continue reading “History of Indian Currency: The Fowler Committee”

PT and the Acworth Committee

Sir Purshotamdas Thakurdas

In the next stage of his life, Purshotamdas Thakurdas, now in his early 40s, was pursued for being on various important Committees. The first such was the Acworth Committee. The reason must have been his balanced approach to all matters, in-depth knowledge and understanding of the commercial and financial aspects of various issues on hand, clear articulation in English, and fearless elucidation of his views even if they were unpalatable to the Chairman of the Committee/Commission, or its other members. This was a rare combination of qualities not commonly found even today. Continue reading “PT and the Acworth Committee”

Roses and Magnolias: Deshmukh’s Lovely Gardens

 “…appreciation of a garden lies not with the gardener but with the observer of the many gardens I have cultivated.”

C.D. Deshmukh, The Course of My Life.

Deshmukh Chowk

C.D. Deshmukh

If one were to walk down from Churchgate in South Mumbai, towards Mantralaya, along the Jamshetji Tata Road, the third round is Deshmukh Chowk. It is named after Chintaman Dwarakanath Deshmukh, the third Governor of the Reserve Bank of India and India’s third Finance Minister. There could be two claimants to getting the roundabout so named after Deshmukh.

Yogakshema or Bank House?

The Head Office of the Life Insurance Corporation, Yogakshema, is the second building from the roundabout towards the sea. As Finance Minister, nationalising life insurance was a pet project for Deshmukh. At the time of this writing, the history page on LIC’s website makes no reference to Deshmukh. But, Deshmukh wrote: “…if the history of the first decade after India attained independence is correctly written, my name may be mentioned as … the Finance Minister of India who nationalised the Life Insurance business when everything else is forgotten.”

The third building in the other direction, behind Mantralaya, is Bank House. Built in 1955, Bank House accommodated many Deputy Governors of the Reserve Bank before they moved to Malabar Hill in 1992. Among the other residents, till the 1970s, was the Cambridge-educated Shantaram (Ram) Deshmukh, youngest brother of Chintaman, 23 years separating them. A musicologist who translated Wamanrao Deshpande’s books, Ram Deshmukh, was the last Manager of the Bank’s London Office before it was closed in 1963. Whoever got the roundabout named after Deshmukh would have envisioned a lovely garden and for good reasons.

A lifelong passion

Deshmukh had a lifelong affair with plants and gardens. That is why A.D. Gorwala, a few years junior to Deshmukh in the Indian Civil Service, wrote of him as follows:

Scholar, linguist,
botanist, horticulturist,
maker of many lovely gardens,
gay and witty conversationalist,
devotee of the public interest,
practical social worker,
administrator of merit.

Quoted in Simha, S.L.N. “C.D. Deshmukh.” India International Centre Quarterly, vol. 22, no. 4, 1995, pp. 282–286.

The seeds of Deshmukh’s passion for botany, horticulture, and gardening were sown when his grandfather used to walk the young Chintaman around their garden in Roha, not far from Raigarh in the then Bombay Presidency. Unusually for a short autobiography of a civil servant who moved to central banking, The Course of My Life has 26 references to ‘garden,’ 17 to ‘botany,’ and four to ‘horticulture’. He would visit public gardens wherever he was, whether in Edinburgh, Paris, or Washington, buying plants he did not have. A lifetime Bombay Natural History Society member, he later found time for the Delhi Agri-Horticultural Society and the Rose Society.

Interest in Sanskrit

Sanskrit (104 references) remained another passion. As a student at Bombay University, Deshmukh won the first Jagannath Shankarseth Scholarship in Sanskrit. Apart from peppering his Parliament speeches with Sanskrit shlokas, he had translated Kalidasa’s Meghadutam into Marathi and published Sanskrit verses, including one that he presented to Rabindranath Tagore, in a meeting arranged by P.C. Mahalanobis, his friend from his Cambridge days. But, even when he quoted from Sanskrit, references to gardens were legion. As Finance Minister, he compared the taxation policy of ancient times to that of a busy bee, quoting as follows:

Pushpam pushpam Vichinvati mooljachchedam na karyet,
Malakara evarame na yathankarakarakah.

In other words, as he explained in Parliament, “the King or Government should act like a gardener who plucks the flowers only, and not like a coalman, that is to say, a charcoal burner, who uproots the trees and reduces them to charcoal, because the latter altogether destroys the source.”

Education, marriage, and daughter

After standing first in matriculation and for his degree at Bombay University, Deshmukh went to Cambridge, where he was a contemporary of Srinivasa Ramanujam and P.C. Mahalanobis. At Jesus College, Deshmukh won the Frank Smart Prize for Botany in his Natural Sciences Tripos Examination. He decided to appear for the Civil Service examination without completing the second part of the Tripos.

On moving to London to pursue the Civil Service, a young British girl, Rosina, or Rose for short, opened his lodge door. Maybe the name played a part, but acquaintances soon became friends, eventually blossoming into love. They married before Deshmukh returned in February 1920 as an ICS probationer who had stood first in the examination. Rose followed in May 1921, and they named their daughter, born the next March, Primrose, the early spring flower. It was shortened to Kiki by an “obscure philological process, ” as Deshmukh himself described.

Separation from Kiki

As a young Assistant Commission in Amraoti, then part of the Central Provinces and Berar, Deshmukh grew zinnias and balsams in dealwood boxes, maybe because of frequent residence shifting. Deshmukh’s transfers and extended touring affected Kiki’s education. They did not want to send her to Boarding School. Therefore, before returning from England in February 1932, they left Kiki under the care of Louis, Rose’s sister. Louis was childless and had become close to her niece over their travels around Wales and the Lake District. Louis’s husband, a manager in a furniture shop, accompanied them in Deshmukh’s car. The family was in England for a holiday. It had got extended as the government, using Deshmukh’s presence in England, had advised him to join the Second Round Table Conference as one of the Secretaries.

Reserve Bank of India

James Taylor, the second Reserve Bank Governor, was also from the CP and Berar cadre. Impressed by the young Deshmukh, he brought him to the Reserve Bank. Taylor also arranged an attachment for Deshmukh with the Bank of England so that he could familiarise himself with central banking. This time, Rose chose to stay back with her daughter, and Deshmukh returned alone.

C.D. Deshmukh in his Reserve Bank of India Office as Governor.

In July, Deshmukh joined the Reserve Bank as a Liaison Officer, soon becoming Secretary to the Board and Deputy Governor in 1941. After Taylor suddenly died in office in February 1943, Deshmukh became Governor in August 1943, the delay explained by the government’s desire to fill the post with another Britisher. Alone at the Governor’s bungalow at No 5, Carmichael Road, barring a few relatives and other visitors, Deshmukh spent time in its garden, which owed much of its original beauty to his personal attention.

This author has never been to the Governor’s residence at Carmichael Road. But, Alaknanda Patel, wife of Late IG Patel, Governor of the Bank for almost five years from 1977 to 1982, described the garden in a personal email as follows:

The Carmichael Road garden was a work of art. It was in several sections including a lower level one for cut flowers. The house itself is very beautiful, the garden complemented it. The long wide veranda outside the drawing room area was full of flowering creepers, designed in such a way that parts of it were open to the sky, part like a covered alcove. There were flowering trees, a whole row of coconut trees lining the wall, a Travellers’ Palm guarding over part of the flower garden, it was exquisite. And if you took walks in different corners you could find a Pomelo tree, laden with fruits. The most gigantic tree was the jackfruit. We got so much that I could not finish them even after distributing to the staff and neighbours.   … Before we left Dr. Patel decided to invite the whole of RBI to tea in that garden. Well, the whole did not come , maybe about 2000 did. …

Alaknanda Patel, personal email to the author.

Kiki leaves, and so does Rose

Meanwhile, Louis lost her husband and became increasingly possessive of Kiki. Kiki also had grown distant from her father, who occasionally resorted to the cane. One day, following an argument, Louis walked out with Kiki. Their whereabouts were never known. Letters to known addresses went unacknowledged.

After the War, the couple bought a house in Leigh-on-Sea, near London, named Roha, after Deshmukh’s hometown. It was to be their retirement home. He would visit London on his way back from Washington, attending the Bretton Woods Conference and other meetings. In 1948, sorting out post-Partition sterling balance issues in London, Deshmukh spent weekends at Roha, planting the garden, and doing up the house, preparing for retirement the following year.

As Deshmukh was leaving, Rose had tears in her eyes. Did she have a premonition of what was to come? That it would be their last meeting? While making farewell visits before leaving for England for good, Deshmukh received news that Rose had had a stroke and died soon thereafter. Deshmukh felt that she died pining for her daughter. He returned to England to settle matters, built a marble tombstone for Rose, and sold Roha. Among Rose’s papers, he found all his letters neatly sorted and arranged.

Finance Minister

Palam Airport, 1952.

After John Matthai resigned as Finance Minister, Nehru appointed a rather reluctant Deshmukh as Finance Minister and Member Planning Commission in May 1950. His new retirement home in Pune, overlooking the confluence of the Mula and Mutha rivers, was now named “Yojana,” his mind full of planning. Its garden was a botanical museum with rare trees, creepers and shrubs frequented by Botany students from nearby colleges.

Deshmukh’s New Delhi residence at No. 1, Willingdon Crescent, was a five-acre plot with about 350 eucalyptuses, two mango trees, a lily pond, and a rockery. At his expense, he added a penthouse, pergola, and a tulsi brindavan. Among its visitors was Prime Minister Nehru, who made a surprise call on Deshmukh’s 60th birthday. Deshmukh used to spend half an hour in the garden every morning.

The bungalow was among the four designed by Edwin Lutyens, the architect of New Delhi. He had reserved it for his use as a residence. In its gardens in 1930, Cameron Cobbold, a nephew of Lutyens, proposed to Hermione, daughter of Lytton, the Acting Viceroy, in 1925. Cobbold would later become Governor Bank of England from 1949 to 1961 and stay in the same bungalow as a guest of Deshmukh.


One Parliamentarian who greatly impressed Deshmukh was Durgabai for her social work. She was a member of the Constituent Assembly and founded the Andhra Mahila Sabha, among other institutions. Nehru planned to make her a minister to succeed Rajkumari Amrit Kaur. But that was scuttled by her loss in the 1952 Parliament elections. When she planned to move to Madras to pursue her legal career, Nehru appointed Durgabai, at Deshmukh’s suggestion, as a Member of the Planning Commission.

Deshmukh and Durgabai soon became close. One evening in November 1951, after Durgabai had come to meet Dehmukh’s mother, they took a walk in his garden. That was when he revealed his plan to resign from the Planning Commission. Durgabai advised him against it. She felt that his presence was essential for its smooth functioning. He said he was overburdened and tired and asked if she could help. She agreed, to which he said: “You can fill my life.” Durgabai would later recall that she was “flabbergasted” and sought time for a response.

The next evening, after having thought much over it, walking again in the garden of No 1, Willingdon Crescent, Durgabai expressed doubts about their compatibility, she with her ‘rustic manners with no social graces’, and he, ‘suave and westernised.’ In reply, Deshmukh took her to a eucalyptus tree and inscribed two Sanskrit shlokas on its bark, a marriage proposal. She immediately accepted, and he kissed her. At the civil marriage on 22 January 1953, Nehru was the first witness.

Deshmukhs with Nehru at their civil wedding.

M.O. Mathai, the irrepressible and manipulative Secretary to Nehru, punching his hand with undisguised glee, had wondered who would change who. But, the new couple found common ground developing their garden, cutting down many an environmentally damaging eucalyptus, cultivating wheat, growing vegetables, and planting varieties of mangoes and dozens of orange and lime.

Cultivating many gardens

Deshmukh’s life can be distinctly divided into four. Apart from his early life and education, these were as a civil servant, central banker, finance minister, and the last as an educationist and institution builder. The last stage was no less important than the first three.

In June 1962, when Princeton University conferred an honorary degree on Deshmukh, the citation concluded, ‘A botanist by training and a gardener by avocation, he believes, unlike Candide, in cultivating many gardens.’ The last part of Deshmukh’s autobiography is “Cultivating Many Gardens.” The reference is to the many institutions he built. And also the gardens he nurtured.

At Delhi University, as Vice Chancellor, he extended the area under roses, shifted the nursery to a new location, planted a eucalyptus plantation with seeds given by Zakir Hussain, then Vice President, and planned the paved path and shrubbery around the cricket ground. IG Patel recalled how, with great pride, he showed him the “Tulsi planter” he had designed at Durgabai’s instance at the Vice-Chancellor’s residence.

Their residence in 32 Aurangzeb Road was a sight for passersby, whether on foot or by car, for its lovely garden. When they shifted from there to the Director’s residence at the India International Centre (IIC), the thousands of plants were shifted in several lorries. Alaknanda Patel observes that the garden at the IIC has since fallen into disrepair compared to what it was.

The IIC borders the Lodi Garden, then known as Lady Willingdon’s Garden, to which there is a direct entry from the director’s residence. If each tree in Lodi Garden is now identified with a plate giving its botanical and common names in English and Hindi, Deshmukh might have had a hand in it.

Also receiving his attention were the gardens of the Indian Statistical Institute, where he was President for nearly two decades, the National Council for Applied Economic Research, and the Indian Institute of Public Administration.  Another garden he nurtured was in a plot at Maharani Bagh, where he planned to retire. But, he gave in to Durgabai’s wishes and gave up on both Pune and Delhi, deciding to settle down in Hyderabad.


They built a new home in Hyderabad, naming it Rachana, or creation. Life continued to be busy. Durgabai passed away in 1981. Deshmukh followed in 1982.

Durgabai, summing up Chintaman’s life, wrote as follows:

No summing of the contribution of Chintaman would be complete without a grateful reference to his service to the dumb millions of trees, shrubs and other species of the plant kingdom which have found in him a friend and an admirer who treated them with the same love and affection that he would have given to his own children.

Commemorative stamp for the Deshmukhs

The Deshmukh Chowk in Mumbai never had a great garden. Even if it once had, it might not have lasted long. At least till recently, it housed a public toilet under the Swachh Bharat Mission. But, Rachana, in Hyderabad’s Durgabai Deshmukh Colony, used to draw the attention of passers-by for its large garden, as much for its coconut and mango trees, its jacarandas and flowering creepers, as for its roses and magnolias.

Postscript: 14 January 2021 was CD Deshmukh’s 125th birth anniversary. A much shorter and different version of this article had appeared in the Madras Courier.

© G. Sreekumar 2021.

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Hawick to Hawick: Life of James Wilson

Portrait of James Wilson

This post is a longer version of my article on James Wilson, the first Finance Member of the Viceroy’s Executive Council, which was published in Business Standard dated 21 January 2021. Please see the link here. Wilson was also the Founder of The Economist, and the Standard Chartered Bank. He presented the first Indian budget in 1860, and introduced income tax in the country. He also laid the foundations for introducing government paper currency in India the Indian Police, and the Office of the Comptroller and Auditor General, among other things. Continue reading “Hawick to Hawick: Life of James Wilson”

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