My review of Sucheta Dalal’s biography of AD Shroff

Preface May 26 2009: Despite the harshness of this review, I should like to add  that Ms Sucheta Dalal of Mumbai is my favourite financial journalist in India.

Review of A. D. Shroff: Titan of Finance and Free Enterprise by Sucheta Dalal, with a foreword by N. A. Palkhivala, Viking 2000.

Subroto Roy

First published in Freedom First, 2001

A. D. Shroff died on October 27  1965.   But if you want to know when he was born you will not find it in this biography – it could be   deduced to be 1898, 1899, 1900 or 1901 depending on where you look in this book.      We are told Shroff got a second at Bombay University and proceeded to the LSE in the early 1920s.    That was an exciting time to be in Europe and at the LSE in particular, yet this biography tells us nothing of what Shroff may have felt or experienced there,  except that he got a job with an American and not an English bank, and attended evening classes at the LSE.   Shroff is said to return in 1924 and almost immediately becomes a partner in Batlivala & Karani, stockbrokers, where he remains until 1939 when he joins the Tatas.    Now Shroff was a Parsi, and his early education, career and professional relationships in the Bombay financial world were doubtless governed by this central fact.   Yet even this vital aspect of his life has not seemed worthy of serious development by Sucheta Dalal.

Then Ms. Dalal tells us numerous times that Shroff was “astonishingly successful” and a “financial wizard”, yet she does not offer a single concrete example which may have illustrated this definitively for us to reflect upon or learn from.    Shroff was a stock-broker who actively traded, we are told, on the international exchanges, yet we do not come to know whether he made money or lost money during the boom of the 1920s, the Great Crash of 1929 or the Great Depression of the 1930s.    Ms. Dalal tells us (p. 16) the young Shroff’s tax return for 1935 showed an income of Rs. 167,000. As a “well-known financial journalist” herself, she could have calculated this to amount to something like Rs. 20,752,707 at today’s prices.    But Ms. Dalal makes no attempt to explain how Shroff made this enormous income, nor does she delve into the further obvious question how a man like Shroff was then eventually to die with taxes unpaid, leaving his family in some financial distress or difficulty.     We may have reasonably expected some explanation of all this, but no, it is all going to be left a mystery.  That Shroff was “particularly charming to women”, was fond of throwing “lavish” parties, or that he suffered a “nervous breakdown” in 1938, only serves to deepen the mystery.     Practically the only concrete example of Shroff’s financial wizardry given by Sucheta Dalal in this biography is that he seems to have been close to the regime of the Nizam of Hyderabad, and borrowed from that source to get the Tatas out of a financial jam.

Ms. Dalal makes much of Shroff being considered for the job of Deputy Governor of the Reserve Bank of India in 1936, in succession to Sikander Hyat (later Premier of Punjab), a job which went to Manilal Nanavati, a senior administrator of Baroda.    Dalal says that Shroff was the preferred candidate of the RBI’s first Governor, an Australian banker by the name of Osborne Smith, and that his appointment was sabotaged by the machinations of the senior Deputy Governor,  James Taylor, and his fellow civil servant and Finance Member, James Grigg.    Now the RBI’s official history spends long pages discussing some of the roots of a conflict between Smith, Taylor and Grigg (History of the Reserve Bank of India, 1939-1951, RBI Bombay 1970, p. 222 et. seq. ).   Ms.  Dalal has done well to throw some new light on that early conflict, but she makes no comment on why the official history makes no mention at all of Shroff, then a youthful stock-broker, being a candidate for the job, only that  “about 25 people were in the run for the post” (History, p. 227).   The same official history mentions Shroff  and others being  members of the “Currency League” which agitated against parts of the original RBI Bill, but Ms. Dalal seems not to have looked up Shroff ‘s name in the index of that book and so says nothing about it.

Leave aside facts and economic history and turn to the sort of gossip, anecdote and rumour which fills many of these pages.    Ms. Dalal tells us Shroff had monumental confrontations with two senior contemporaries of his in the Bombay financial world: J. R. D. Tata and Ardeshir Dalal.    Fascinating,  the reader says, tell us more about this at least.   But again there is only disappointment, and we learn almost nothing of the depth or dynamics of these conflicts either.   Time after time, a reader is forced to decide whether the biographer has been merely lazy in dealing with her chosen subject or whether facts are being glossed over thirty five years after his death.

This is a great pity.   A. D. Shroff’s lasting legacy for India has been the Forum of Free Enterprise, run so ably by his friend and disciple M. R. Pai for so long.    Post-Independence Indian liberals, like many liberals elsewhere, are of two kinds – those who were arguing for liberalism before it became fashionable to do so, and those who are filled with newly discovered liberal ideas now that it has become fashionable to be so.    The way to fix which category one belongs to is by recalling one’s opinions before and after the fall of the Berlin Wall.   Before the fall of the Berlin Wall, our nation of hundreds of millions of people, produced a sum total of perhaps a  dozen or so genuine liberals in political economy: Rajagopalachari,  Masani,  Shenoy among them.

Shroff’s Forum of Free Enterprise  was one rare beacon of hope that Indian liberals had in those dark days before 1989.   (To her credit, Ms. Dalal records Shroff’s assessment of Nehru:  “Pandit Jawaharlal Nehru has indulged in a very serious self-contradiction when he wants a rapid industrialization of the country and at the same time preaches the abolition of private property”).    The Forum’s little, plain, inexpensive pamphlets, with their massive reach among unknown multitudes of Indian students,  often seemed more important than most Indian newspaper editorials at the time, because they defiantly permitted the opinions of a Milton Friedman or a Peter Bauer to be expressed to contradict the Sovietesque intelligentsia in Delhi and elsewhere.    From each of those pamphlets peered out a photograph of and a quotation from A. D. Shroff.     Many Forum readers must have wondered who this man was who had given them the chance to read these little pamphlets in the darkness.    The opportunity after all these years of even a sponsored biography was an outstanding one.    It should have been seized properly and professionally, for the production of a full and comprehensive picture of the man —  his talents as well as his faults.    This reviewer has little doubt that Shroff was a strong, hard, rambunctious kind of man, who hated all things puny and  narrow-minded, who may have had in him rare qualities of economic leadership which India did not come to properly utilize.   (Suppose Nehru had made him Finance Minister — could he have been India’s Ludwig Erhardt?)   A chance to properly write the biography of that man has been squandered.

Kharagpur, January  16 2001.