In The Government
In 1928, when two of Subbarayan's ministers R. N. Arogyasamy Mudaliar and A. Ranganatha Mudaliar resigned, Subbarayan invited Muthiah to take over the portfolios of education and excise which Ranganatha Mudaliar had held. This time, Muthiah accepted the invitation and served as the Minister of Education and Excise in the independent ministry from 1928 to 1930.
Muthiah Mudaliar is remembered for introducing the Communal G. O. Ms No. 1021 to implement the 1921 order. This act, introduced provisions for reservations for Dalits and increased representation for Indian Christians and Muslims. At the same time, it reduced the reservations for Brahmins from 22% to 16% and non-Brahmins from 48% to 42%. This act was in effect till India's independence on August 15, 1947.
In accordance with G. O. Ms N. 1021, reservations were first introduced in the registration department.
As Minister of Excise, Muthiah launched a Created Excise Propaganda Central Committee along with district committees in order to introduce and implement prohibition in the Presidency. He launched a massive propaganda campaign against consumption of liquor and allocated a record budget of Rs. 4 lakhs (400,000) for propaganda alone. This was probably the most costly propaganda campaign against drinking. Prohibition lasted throughout Subbarayan's tenure but was discontinued by the successor Justice Party regime. As late as August 1934, Rev. Herbert Naderson, Secretary of the Prohibition League, praised Muthiah's efforts at the Imperial Institute at London.
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