The annual general meetings were galas attended by ministers, but Indira Gandhi would stay away to assert her socialistic leanings. Industrialists joined the FICCI for access to politicians and officials vital for doing business during the licence raj. They made noises against restrictive and opaque policies of the government but were also wary of direct and sudden competition from within India or abroad.
FICCI's relations with the government reached a nadir during the Janata Party rule under Morarji Desai. His government came out with a policy that capped foreign investment in companies at 40 per cent, forcing Coca-Cola and IBM to leave India. FICCI was ready for a fight. In a speech at a luncheon meeting where industry minister George Fernandes was present, G D Birla, the doyen of Indian industry, told industrialists to break the law by producing more than what their respective licences allowed.
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Rules then allowed a company to produce only 25 per cent more than its licensed capacity. The story hit the headlines and was perhaps one of the first public utterances of Indian industry seeking freedom from the controls of a closed economy.
The big changes were to occur a decade later. The Association of Indian Engineering Industry was created in 1974 and it decided to shift from Calcutta to Delhi. In 1992 it was renamed the Confederation of Indian Industry, following advice Rajiv Gandhi had given Das in 1986 to give it a wider representation. But Das, who had studied at Manchester University and who had worked for many years in Calcutta, as it was then called, did more than just change the name. He radically overhauled the way CII functioned, making it a model for running an industry association that was fundamentally different from FICCI or the older Associated Chambers of Commerce & Industry (Assocham).
It was run professionally through a secretariat that did not take up individual cases of companies but worked on industry issues. It provided a platform for the government to express its view and decided it would convey criticism in private. A substantial portion of its income came from services to members, unlike other associations that depended on subscriptions. In 2000, Das said in an interview that over 85 per cent of CII's income was from services.
CII's first break, however, came in 1975, when the Association of Indian Engineering Industry helped organise India's first trade fair. The work impressed industries minister TA Pai and his secretary, Mantosh Sodhi, and they began asking the association for suggestions on policy.
Finally, CII realised earlier than other industry chambers the potential of projecting India's economic image abroad. Rahul Bajaj, a member of CII, took India to the annual meeting of the coveted World Economic Forum in Davos in 1979. CII also brought the WEF to India, although the offer went first to the FICCI, which was cold to it. It also realised the importance of setting up offices abroad to help Indian industry.
The rise of the CII was coterminous with Rajiv Gandhi's entry into the politics, and especially after he became prime minister. Rajiv was not comfortable with the old guard of Indian business, who were still not prepared for competition. He preferred younger industrialists like Bajaj and J N Godrej. On his first overseas visit to Russia in 1985, Rajiv took a CII delegation along.
Rajiv also took the first steps towards economic reform by reducing some of the restrictions in the licence regime, making it easier to import capital and consumer goods, reducing import quotas and putting more money into science and technology. The CII supported the changes wholeheartedly.
With the economy in a shambles in 1991, PV Narasimha Rao lifted more controls. But he also decided to reduce import duties that were protecting Indian companies from foreign competition. Nervous at the speed of change, a group of industrialists known as the Bombay Club wrote a letter to the government in 1993 seeking a "level playing field for Indian industry". Bajaj, an outspoken member of the club, explained this concern was justified: foreign companies did not have to face rigid labour laws, high interest rates or weak infrastructure. But Bajaj could not push his views in the CII, where members like Ratan Tata ensured the chamber continued to support the government on reforms.
Another change in the political landscape with Atal Bihari Vajpayee coming to power changed equations with business chambers yet again. Tension was palpable with the CII. It started in 2003 when Gujarat chief minister Narendra Modi was sharply criticised on the law and order situation in the state in a session after the post-Godhra riots of 2002. Gujarati business was up in arms against what it saw as a CII attack on Modi, forcing Das to fly to Ahmedabad to meet him and issue an apology for the misunderstanding.
The CII's distance with the government widened after it invited opposition leader Sonia Gandhi on the opening day of its annual general meeting in 2003 instead of Vajpayee. Gandhi used the platform to attack the government as well as Modi. She said the incidents in Gujarat would seriously affect the image of the nation and its industry. There were murmurs that Vajpayee might cancel his appearance later in the annual general meeting, but he showed up and used the occasion to attack Sonia.
Many by now were seeing clear indications that FICCI was back in the reckoning. When the government decided to start the Pravasiya Bharatiya Diwas, the job went to FICCI. Its secretary-general, Amit Mitra, now finance minister of West Bengal, had good relations with the Bharatiya Janata Party leadership, the chamber had built a strong research team and it had brought in professionals, just like the CII.
The Manmohan Singh decade saw a steady decline of the lobbying power of business chambers. In his first term as prime minister, Singh presided over a vibrant economy and companies never had it so good. Pre-budget memorandums by chambers, elaborate affairs earlier, now just ran into a few pages. Industrialists preferred to get their work done by directly meeting those in power, bypassing the chambers completely. Associations representing individual industries - in fact, the ones that became prominent after economic reform - like the Cellular Operators' Association of India and National Association of Software and Services Companies worked more cohesively to lobby on specific sets of issues. Increasingly, the business chambers concentrated on serving the growing needs of their members rather than lobbying with the government. FICCI offered expertise in international arbitration and the CII started quality monitoring for small and medium companies.
The growing irrelevance of industry chambers continued in Singh's second term after the global financial meltdown. Companies now had to focus their energies on survival. Worse, a scam over telecom spectrum slowed liberalisation of foreign investment. Admitting privately that the government had derailed reforms in the name of inclusive growth, the two chambers lost an opportunity by keeping quiet about it. That role was taken over by industrialists like Tata, Azim Premji and Deepak Parekh, who publicly questioned Singh's failure to push through reforms.
The question facing the business chambers is: how does the Modi government perceive them? Before becoming prime minister, Modi used the FICCI Ladies Organisation to address the business community at large. Rahul Gandhi did the same at the CII. Yet those in the know say as prime minister Modi has not had any formal meeting with industry chambers, though he meets individual industrialists. At the India Economic Summit organised by the WEF senior ministers, including finance minister Arun Jaitley, provided a candid view of the the government's vision. But Modi stayed away, and kept the chambers guessing.