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| Edited By: Yogesh Pawar |Source: DNA |Updated: May 07, 2018, 08:21 PM IST
For 90 years, five generations of eleven Chartered Accountants from one Indian family have not only stood testimony to the country's economic history but also served as auditors to the divine. Yogesh Pawar tracks the backstory
Our story begins at the end of what we now call the 'Roaring 20s.' World War I (WWI) had ended and there was an air of infectious optimism, which saw many Americans give up poor pastoral lives, for the shine of cities where they joined the labour force creating islands of both rich and excess. But this too-much-of-a-good-thing began to soon careen out of control and sank the New York Stock Exchange (NYSE) in 1929 triggering the Great Economic Depression.
About 11,734km away around the same time as the tumultuous developments in NYSE were casting a pall of gloom worldwide, a young Mathura native, English graduate, Bishambar Nath Chaturvedi (who pursued college in Agra because there was none in his hometown) was graduating as a Chartered Accountant (CA) in India. The degree, then called the Government Diploma in Accountancy (GDA) would later be called Registered Accountants (RA) till 1949, when the Institute of Chartered Accountancy was established in Calcutta and it finally became CA. No prizes for guessing that one of its first members was Bishambar Nath Chaturvedi.
"Though there was no internet and Indian newspapers (especially mofussil ones) rarely mentioned international developments, much less analysed them, later, my father often spoke of events following the crash and WWII actually created the right climate for Indian Independence," beams his proud septuagenarian younger son Dina Nath Chaturvedi (CA in 1996).
The family patriarch [after the elder son Amar Nath (CA in 1976) passed away 27 years ago] says, "My father was born in a poor family. His father Shyamsunder, a well-known Sanskrit scholar of his time instilled in him the values of living a simple, spartan life. Despite interacting with and managing accounts for several Britishers later, my father never smoked, drank or gave up strict vegetarianism. This has continued in our family."
In keeping with those times, Bishambar Nath was married off early and had five children (three sons and two daughters) in quick succession. He was maintaining accounts for the princely state of Bikaner first and then a Gwalior-based cigarette factory, even as he dreamed of starting his own practice. But circumstances were not right as money was hard to come by. "Those were tough times since the mouths to feed were many in our extended family of Mathura priests. And he was the lone earning member with a fixed salary of Rs 25 per month."
It was here on the request of the priests of Mathura's oldest and most famous Dwarkadhish temple, he began maintaining accounts for offerings to Lord Krishna. "Remember the Lord had moved to Dwarka from Mathura to settle there until his last breath," reminisces Dina Nath, "My father too kept praying to Krishna to help him move out of a life of hardship."
Apart from the port, there was not much in Bombay then and his family didn't want him to go to Calcutta (a bustling metropolis, and the capital of British India for long). "They felt it was too far, large and decadent."
So Bishambar Nath shifted to a rented home in what the British still called "Cawnpore." He worked part-time for a trading firm and as a steno for elite British families. "Soon many of these elite made him manage their accounts," says Dina Nath who adds, "When I was 12, my father bought a plot off Kanpur's tony Mall Road and built a sprawling mansion called the Chaturvedi House."
The same property would be home to the Central India Regional Council of Chartered Accountants for Uttar Pradesh, Bihar, Rajputana (current Rajasthan along with parts of MP, Gujarat and some areas of Sindh in southern Pakistan) and Central Provinces and Berar (Madhya Pradesh, today's Chhattisgarh and Vidarbha) when Bishambar Nath became the chairperson.
Meanwhile, in an indication of how the Indian economy was growing between 1938-46, the number of bank branches had grown to nearly 3,500 with collective deposits of over Rs 950 crores. And if it were not for the Partition (1947) that hit the economies of Punjab and West Bengal badly, the economy would have taken off after Independence. At this point the current head of the Mumbai arm of the family firm (BN Chaturvedi & Co), Brij Mohan intervenes to remind how the then government's Industrial Policy Resolution (1948) envisaged a mixed economy. "This meant greater state involvement in banking and finance," he points out.
The 68-year-old who became a CA in 1975 should know. He is the eldest of the third generation CAs in the family along with Srikant (late Bishambar Nath's grandson), late Madan Mohan and Subodh Chaturvedi (sons of the late Amarnath). The Reserve Bank of India, established in 1935 was nationalised 14 years later, Brij Mohan informs, when it was given powers to regulate, control, and inspect the country's banks. "The Banking Regulation Act (1949) also provided that no new bank or branch of an existing bank could be opened without a Reserve Bank of India licence and no two banks could have common directors." By the 1960s, this led to banks playing a huge role in facilitating economic development. Thereafter, in a move by one of India's tallest leaders Jayaprakash Narayan had called "a masterstroke of political sagacity," the Indira Gandhi government issued an ordinance nationalising 14 largest commercial banks on July 19, 1969. When the government nationalised six more banks 11 years later, it would control around 91% of India's banking!
Through this period, BN Chaturvedi & Co was steadily growing. Brij Mohan's father and two of his uncles were taking it forward. "In the 1950s they concentrated on bookkeeping, managing accounts and some tax planning," remembers Brij Mohan, "We, the third generation, went big on tax planning," he says and adds, "Remember then taxes were in excess of 89%, sometimes even hitting over 95%. People wondered for who they earned and worked hard for. So we decided to crack legal tax planning and even got good at it helping the firm grow in leaps and bounds."
Much later when the PV Narasimha Rao government under Dr Manmohan Singh brought the tax levels down significantly, things began to change," he explains. "Suddenly people had spare money and felt like investing. This created a climate where everyone wanted to earn more to invest and grow."
According to him, till Minimum Alternate Tax (that facilitated the taxation of those companies which show zero/negligible income to avoid tax) was introduced, the more you invested the more tax benefits you got. "This meant a lot of capital was being injected into business and hence the economy saw a sudden all-round boom. Entrepreneurs were able to move from focusing on how to save on taxes to focusing on growth and taxes became at best only a necessary evil."
Fourth-gen CAs Apurva and Rishabh Chaturvedi (sons of Madan Mohan Chaturvedi), who have been listening on, take on the elephant in the room no one has spoken of till now.
They feel the black economy was a result of unrealistically high import and excise duties which many tried to evade. "On one hand, hundreds of crores were being saved by evasion, and on the other some corporates would use it to repay loans raised from financial institutions and banks before time (sometimes even barely 3-4 days before) and get fresh loans. No wonder there were no Non-Performing Assets (NPAs) in that era," says Rishabh Chaturvedi who adds, "A fundamental error in our economy even today is that one pays 16-18% interest on project financing from banks. Since loans are for 6-7 years, 15% depreciation is a must for one to repay."
According to him, to complete a project corporates get another loan and this creates NPAs. "Many corporates portray rosier profit figures than they actually receive to get new loans. This hits the economy hard."
Demonetisation by the Narendra Modi government, unanimously the whole room agrees "was not exactly a wise, well thought-out decision." According to them, "The government should understand black money doesn't necessarily exist only as cash. So demonetisation could just not tackle black money right from the beginning. Except for, creating an economic vacuum for over a year, there was no real benefit for the economy either," avers Brij Mohan.
On GST, however they all agree that despite its "severe teething problems" it is a good regime in the long run.
Brij Mohan's granddaughter, Mohini, the only woman in the room, may be barely 23 but not only holds her own in the discussion but also asserts her view both firmly and gently. "Earlier I'd hear men in the family discuss finance or money and would only listen. Now I have so much to ask and discuss," says the fifth-gen CA, who passed the exam at the same time that her maasi did.
She points out how her father, Gagan himself an accomplished CA, kept saying she will be next generation CA right from when she was a little child. "I guess I grew up subconsciously wanting to be one. And touch wood my attempts at the exam too worked," says this Cathedral school alumna, who pursued her CA simultaneously with her Bachelor's in Commerce degree from Hassaram Rijhumal (HR college), Mumbai.
Truly, this family has CA in their DNA!
Not many people can claim to have five generations of CAs in one lineage. Aware of how their record of serving the profession continuously for more than 90 years (giving three chairpersons from three generations for the central and western India regional councils of the ICAI in the process) is a cause for pride not only for their Chaturvedis, but also the entire profession of Auditors and Chartered Accountants in the world, the family has written to the Guinness Book of Records for inclusion of two of their records: maximum generations and maximum CAs from one family. The current record stands at five CAs from one family.
Fingers crossed!
