Policy-making and lobbying in India

22oeb_Business

The social consequences of the concentration of economic power in the hands of a few big business houses have always been a constant concern both of economists and politicians. In post-Independent India, especially in the context of a socialistic pattern of society, this misgiving has had a big following. The media has taken it on itself as an onerous responsibility, quite often, to blow out of proportion any alleged misdeed by a company. Hence, big business is caricatured as the bully and the bad boy in the commercial arena.

This is despite the fact that it is essentially on account of the big business that life expectancy is up, infant mortality is down, employment opportunities are more, standard of living has improved, and global cooperation has been made much easier. The point is not to pretend that big business never does anything amoral; but to acknowledge that most of what it does is morally upright, and that it is in the interest of the society that it must survive and thrive.

Moreover, with the kind of checks and balances established in the economic and political systems operating in our country, there has been very little scope for any major misdemeanour. When innumerable innovations that improve the quality of life are produced by the big business, it just does not ring true to label it as an enemy that needs to be vanquished. Society must evolve methods and means by which to encourage more of the good that the big business does, and discourage the bad.

This book contains a historical perspective of the origin, evolution, and development of the Federation of Indian Chambers of Commerce and Industry (FICCI). It also outlines the interaction between FICCI — the premier representative body of Indian business community — and the Government of India.

The other contending apex body of Indian big business, ASSOCHAM (The Associated Chambers of Commerce and Industry of India), has usually been identified with private foreign capital, at least till the end of the “sixties”. The book seeks to substantiate its stand that ASSOCHAM invariably played second fiddle to FICCI.

Congress and FICCI

Ever since its inception, FICCI has sought to influence and often stood beside the Congress leadership during the nationalist movement. G.D. Birla, a close confidant of Mahatma Gandhi and, hence, highly respected by the rest of the Congress leadership, was the patron saint of FICCI from day one. For varying reasons, some leading industrial houses in the western region (including Tatas, Mafatlals, Khataus, and Sarabhais) patronized ASSOCHAM, and kept away from FIICI. In consequence, therefore, in journalistic parlance, FICCI was referred to as the ‘Birla Bloc’, while ASSOCHAM was known as the ‘Bombay Bloc’.

The author examines the developments immediately following Independence, which laid down the foundation for the general orientation of government policies towards basic issues relating to industrialisation such as the role of the State; the reservation of particular areas of industrial activity for specified sectors, licensing of industrial units; and the broad regulation of foreign investment and collaboration.

The opening chapter deals with the organisation of Indian big business — its origin, growth, and role in the national economy. Essentially, it is a narrative of how the different chambers of commerce were established; how the colonial rulers exercised control over the Indian big business, with the specific motive of thwarting its growth; and how it took several decades “… before the conflict of interests between the European and Indian commercial classes led to the establishment of the first native chamber”.

One chapter details the formulation of the Industrial Policy by the Union government, based on “the pre-Independence debates on the nature and pattern of the development that independent India would pursue.” Another explains how the institutional framework for the Industrial Policy has been created, which in the words of Jawaharlal Nehru gives the private sector, “a fair chance, a fair field, and a fair profit.”

The author analyses the development of the Industrial Policy between the years 1951-1956, and the impact of the Industrial policy on the big business between the years 1956-1963. The process of liberalisation of the Industrial Policy during 1964-1966 that resulted “in the decontrol of a significant number of industries” is explained.

He concludes that “the manner in which Industrial Policy was formulated and implemented during these post-Independent years, was very largely a consequence of sustained lobbying by Indian big business.”

THE RISE OF BIG BUSINESS IN INDIA: Kamal Aron Mitra Chenoy; Aakar Books, 28-E, Pocket IV, Mayur Vihar, Delhi-110091. Rs. 891