C. D. Deshmukh

Chintaman Dwarakanath Deshmukh
Born	Template:Birth date Nategaon near Fort Raigad, Maharashtra, India
Died	October 2, 1982(1982-10-02) (aged 86)
Occupation(s)	Civil servant, economist, administrator
Known for	First Indian Governor of the Reserve Bank of India; Union Finance Minister of India (1950–1956)

Sir Chintaman Dwarakanath Deshmukh (14 January 1896 – 2 October 1982) was a distinguished Indian civil servant and notably the first Indian to be appointed as Governor of the Reserve Bank of India in 1943 by the British administration. Subsequently, he held the position of Finance Minister in the Union Cabinet from 1950 to 1956. During his tenure, he played a pivotal role as a founding member of the Governing Body of NCAER, India's inaugural autonomous economic policy research institution, established in 1956 under the leadership of Prime Minister Jawaharlal Nehru.

Following his resignation from the Union Cabinet, Deshmukh assumed the chairmanship of the UGC between 1956 and 1961 and later served as Vice-Chancellor of the University of Delhi from 1962 to 1967. From 1945 until 1964, he was President of the Indian Statistical Institute, and between 1957 and 1960, he held the position of Honorary Chairman at the National Book Trust.

In 1959, he established the India International Center, where he was honored as Lifetime President. Moreover, he chaired the Indian Institute of Public Administration.

Early life and education

Born on 14 January 1896 in Nategaon near Fort Raigad, Maharashtra, Chintaman Deshmukh hailed from a Chandraseniya Kayastha Prabhu lineage with ancestral ties to administrative migrants from Jammu & Kashmir. His early schooling took place in Roha, Tala, and at Elphinstone High School, Bombay. Excelling academically, in 1912 he topped the University of Bombay Matriculation Examination and was awarded the Jagannath Shankarseth Scholarship for Sanskrit studies. Deshmukh completed his undergraduate education at Jesus College, Cambridge in 1917, earning a degree in Natural Sciences Tripos, receiving the Frank Smart Prize in Botany, and presiding over the Majlis Society. In 1918, he achieved first rank in the highly competitive Indian Civil Service Examination conducted in London.

Civil service career

Upon his return to India in 1920, Deshmukh undertook significant administrative responsibilities within the Central Provinces and Berar. His roles included undersecretary, Deputy Commissioner, Settlement Officer, and secretary during the Second Round Table Conference in 1931. He subsequently served as secretary for both finance and public works departments. Briefly, he acted as Joint Secretary to the Government of India overseeing education and health sectors and fulfilled duties as Custodian of Enemy Property.

At the Reserve Bank of India

Deshmukh commenced his association with the Reserve Bank of India in 1939 as Secretary to the Board before advancing to Deputy Governor and ultimately Governor. His appointment as Governor came in August 1943, making him one among eight Deputy Governors who ascended to this position. Throughout his governorship, Deshmukh contributed to founding the Industrial Finance Corporation and emphasized expanding rural credit facilities. Under his leadership, RBI established its Research and Statistics department, implemented demonetisation of banknotes exceeding ₹500 denomination, oversaw RBI’s withdrawal from serving as central bank for Burma and Pakistan, and facilitated passage of the Banking Companies Act, 1949 which formalized banking regulation across India.

The nationalisation of RBI took place on 1 January 1949 pursuant to the RBI Act, 1948. While Deshmukh was initially opposed to nationalisation, he consented to chairing the board during this critical transition from private ownership to a nationalised entity. In July 1949, Benegal Rama Rau succeeded him as Governor.

Bretton Woods Conference

Deshmukh participated as a member of the five-person Indian delegation at the Bretton Woods Conference, where the International Monetary Fund (IMF) and International Bank for Reconstruction and Development (IBRD) were founded. He advocated for India to withdraw in response to quota arrangements that would deny India automatic representation on the IMF's executive board. The delegation successfully integrated concerns about poverty and development into the IBRD’s priorities.

Significantly, John Maynard Keynes praised Deshmukh for his "dignity, ability and reasonableness" and proposed him for the role of IMF’s inaugural managing director, a suggestion ultimately declined by the United States.

From 1946 to 1956, Deshmukh was a member of the Board of Governors for both institutions and was chosen as Chairman of their Joint Annual Meeting during the 1950 conference held in Paris.

Deshmukh Award

In the aftermath of Partition, the allocation of income tax revenues and jute export duties between the central government and Indian states needed resolution. The Government of India appointed Deshmukh to settle this matter temporarily until a Finance Commission could be established. The resulting Deshmukh Award of 1950 introduced population as a criterion for revenue sharing, recommended grants in aid to states, and remained in effect until April 1952.

Union Finance Minister

Deshmukh was one of the five original members of the Planning Commission formed in 1950. He assumed the office of Union Finance Minister following the resignation of John Mathai, who stepped down over conflicts related to power transfers to the Planning Commission. Maintaining his position on the Planning Commission, Deshmukh set a precedent that Finance Ministers serve ex officio on this body. His period in office encompassed the First Five Year Plan, during which he utilized deficit financing to promote planned investments, although challenges such as inflation and revenue shortfalls persisted.

As chair of an economists’ committee, Deshmukh endorsed a capital-intensive approach for the Second Five Year Plan, highlighting the importance of village and cottage industries to address unemployment and inflationary pressures. His initial budget (1951-52) included broad tax increases; he also presented subsequent budgets, including one before the first elected Parliament of India, where he represented Bombay State’s Kolaba constituency.

In 1952, Deshmukh invited Paul Appleby to conduct a study on Indian administrative practices, which led to the establishment of both the Organisation and Management Organisation and the Indian Institute of Public Administration, where Deshmukh later held roles as vice president and chairman.

The creation of the State Bank of India in 1955—through nationalisation and consolidation of the Imperial Bank with smaller banks—was implemented following recommendations from the All-India Rural Credit Survey Committee. This occurred despite Deshmukh’s earlier opposition to nationalising the bank during his term as RBI Governor. Additionally, he oversaw insurance sector nationalisation through formation of the Life Insurance Corporation of India under the Life Insurance Corporation of India Act, 1956.

Deshmukh resigned due to government proposals to split Bombay State into Gujarat and Maharashtra, with Bombay city becoming a separate Union Territory. Over his tenure—which included six budgets plus an interim budget—he is recognized for skillfully managing India's economy, promoting consistent growth, and aiding recovery from economic disruptions experienced during the 1940s.

Later career

Following his departure from the Cabinet, Deshmukh was appointed as the Chairman of India's University Grants Commission in 1956, a position he held until 1961. As the inaugural chairman after the commission gained statutory status, he played a pivotal role in enhancing university library systems. In 1957, he established the National Book Trust to facilitate access to affordable books for both the general public and libraries. Between 1962 and 1967, Deshmukh served as the tenth Vice Chancellor of the University of Delhi, during which he secured a $1 million grant from the Ford Foundation aimed at modernizing the university’s library facilities.

In the 1969 Indian presidential election, Deshmukh stood as a candidate endorsed by the Swatantra Party and Jana Sangh, ultimately receiving the third-largest count of first preference votes.

Personal life

Deshmukh married Rosina Arthur Wilcox in 1920, and they had a daughter named Primrose. After Rosina passed away in 1949, he wed Durgabai in 1953; their marriage lasted until her death in 1981. Durgabai authored her memoir titled Chintaman and I in 1980.

In 1974, Deshmukh released his autobiography entitled The Course of My Life. He passed away on 2 October 1982 in Hyderabad.

Awards

Deshmukh was honored as a Companion of the Order of the Indian Empire in 1937 and was knighted as a knight in 1944.

He received honorary doctorates including a Doctor of Science from the University of Calcutta in 1957 and a Doctor of Literature from Panjab University in 1959.

In 1959, Deshmukh was co-recipient of the Ramon Magsaysay Award for Government Service alongside Jose Aguilar from the Philippines. His alma mater, Jesus College, Cambridge, recognized him as an Honorary Fellow in 1952 for his significant contributions to finance and administration on both Indian and international stages.

In 1975, both Sir Chintaman and Durgabai Deshmukh were bestowed with the prestigious Padma Vibhushan.

Legacy

Since 1984, the Reserve Bank of India has hosted the annual 'Chintaman Deshmukh Memorial Lectures'. Additionally, beginning in 2013, the National Council of Applied Economic Research has organized an annual C.D. Deshmukh Memorial Lecture.

The Thane Municipal Corporation founded the Chintamanrao Deshmukh Institute for Administrative Careers in 1987 to train young individuals for civil service roles. A street named 'C. D. Deshmukh Road' exists in Belgaum, and an auditorium at the India International Centre in New Delhi bears his name.

In tribute, a commemorative postage stamp honoring him was issued in 2004.

For over twenty years, the National Insurance Academy has conducted an annual "CD Deshmukh Memorial Seminar".