The Maitra Committee Mindset

In 2018, Jairam Ramesh published an extremely well-researched book on the lives of P N Haksar and Indira Gandhi.
Image used for representative purposes only. (File Photo | PTI)
Image used for representative purposes only. (File Photo | PTI)

Posterity remembers S K Maitra. Once Joint Secretary and Legislative Counsel, Ministry of Law and Justice, he was extremely powerful, once upon a time. His views stood him in good stead. He wrote (in a report I will soon mention), “It was the genius and foresight of the then Prime Minister, Pandit Jawaharlal Nehru, which were responsible for the enactment of the Standards of Weights and Measures Act, 1956, whereby a uniform system of weights and measures, namely, the metric system, was adopted in India.” There were two doses of bank nationalisation, 1969 and 1980. The first was done through an ordinance in July 1969, subsequently formalised through Parliament. That ordinance was passed on July 19, 1969. Legal scholars (including Granville Austin) have told us on the evening of July 18, PMO instructed S K Maitra to draft the ordinance nationalising fourteen banks. S K Maitra featured in the preliminaries too. Earlier, in 1968, Banking Regulation Act (1949) was amended to increase “social control” over banks. To draft the Bill, Lok Sabha formed a Select Committee, and Maitra, still Joint Secretary (JS), was “legislative counsel”. True, that was a different age. Even then, the average JS does not wield that kind of clout.

In 2018, Jairam Ramesh published an extremely well-researched book on the lives of P N Haksar and Indira Gandhi. The detailed sections on bank nationalisation highlighted the roles of P N Haksar, K N Raj, P N Dhar, A Bakshi (Deputy Governor, RBI) and D N Ghosh (then Banking Division, later, Chairman, SBI). According to the Jairam account, the decision was taken on July 18, 1969. “The next day, Ghosh writes, the prime minister herself summoned him in the morning. She wanted to be convinced that the legislative draft for the nationalisation of banks could actually be prepared in less than 24 hours. When she was told that such a draft had, in fact, existed from the end of 1963 when the nationalisation of five banks had first been considered, she appeared to relax and swore Ghosh to absolute secrecy, saying that in case of any hitch, he should apprise PNH (Haksar).” In other words, there was no need for SK Maitra to do any drafting. At best, some tweaking would be required.

But S K Maitra was involved in other things too. There must be standards for weights and measures. We have the Legal Metrology Act (2009), which repealed the Standards of Weights and Measures Act (1976) and the Standards of Weights and Measures (Enforcement) Act (1985). The current 2009 Act used to have imprisonment provisions for offences until the Jan Vishwas (Amendment of Provisions) Bill (yet to become an Act) removed them. Before the 1976 statute, there was the 1956 one, attributed to Jawaharlal Nehru’s genius and foresight. Before 1956, standards varied throughout the country, and other than the metric push, the 1956 statute unified these and didn’t exceed that brief. Specifically, 1956 mentioned nothing about offences and penalties in the main body of the statute. That was left to State-level Acts, enforcement by States, and rules. The late 1960s and 1970s were a period when the visible and heavy hand of the State manifested itself, not only in economic policy formulation but also legislation flowing from that interventionist policy. FERA (1947) and FERA (1973) illustrate this contrast in stringency, as do Essential Commodities Act (1955) and Essential Commodities Special Provisions Act (1981). 1976, matched against 1956, mirrors that pattern. Invariably, there were learned committees that provided ammunition for tightening up. MRTP Act (1969) fed on Hazari Committee (1967) and Dutt Committee (1969). Similarly, the Standards of Weights and Measures Act (1976) is fed on Maitra Committee, which is why SK Maitra deserves greater recognition by posterity more than bank nationalisation alone.

Maitra (still JS) chaired this Committee on Weights and Measures (Law Revision) and submitted its report to Commerce Ministry in 1972 with a Bill that would become the 1976 statute. This incorporated meticulous research, harking back to Kautilya’s “Arthashastra”. But since that was the era of Jan Avishwas, there was also detailed research on the unscrupulous. Sample the following. “Most of the sellers of sweets have developed a practice of weighing sweets along with the cardboard boxes in which they are delivered to the consumer across the counter.” The weight of a cardboard box is 1/10th that of sweets. That was the Committee’s finding. One kg of sweets, back then, cost between 80 paise to 1 rupee and 20 paise. With that 10% norm applied, an average sweetmeat shop made an unwarranted profit of Rs 5 to 10 per hour. Extrapolated to an entire year (of 300 working days), the range of unwarranted profits was a colossal (at the time) Rs 18,000 to Rs 36,000 per year. This could not continue. “The shopkeeper who makes an extra profit by such sharp practice is not ordinarily expected to give up such lucrative practice unless the law provides deterrent sentences for its violation. In the circumstances, the Committee feels that it is essential that the punishment for the contravention of the laws should be so deterrent that a person may not be tempted to contravene the law for the second time. It has, therefore, been provided that although the first offence relating to short weightment or short measurement will be punishable only with a fine, the second or subsequent offence would invariably be punishable with imprisonment, to which a fine may be added. The Committee hopes that the provision for imprisonment for a second or subsequent offence will prove to be a real deterrent.”

That last sentence says it all. In any event, fines are measly amounts. Who takes them seriously? To borrow an expression associated with Kautilya, “danda” means the staff of chastisement through imprisonment. In fairness to the Maitra Committee, this was the flavour of the times. “Such need is greater in a developing country like India where the progress made by developed countries in centuries is sought to be achieved in decades.” Posterity has a different take on what the decades of the 1960s and 1970s meant for India. They were lost development decades precisely because of legislation like the 1976 Standards of Weights and Measures Act. In documenting that loss, let us not forget the Maitra Committee and the mindset the Maitra Committee represented. All too often, political leadership is blamed for lost development decades. But that leadership fed on such advice.

Bibek Debroy
Chairman, Economic Advisory Council to the PM

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