How I changed the business of lobbying

Taking up a sector’s interest rather than that of individuals, and forcing industry to discard protectionism and accept the reality of competition, were the two main planks on which we distinguished the Confederation of Indian Industry from other business associations. I achieved this through as much by design as by chance, spanning 35 years. Though CII is just 18 years old today—exactly as much as the liberalised Indian economy is—the journey of the organisation dates back to 1963 when I had returned to Kolkata after studies at Manchester University and was looking around for opportunities.

One evening, my father came home and said the Bengal Chamber of Commerce (BCC) was looking for people and asked me to check it out. A Scotsman by the name Walter Paris interviewed me first there. Then, on the day I was to leave for Bombay for an interview with Hindustan Lever, where too I had applied, I met Paris’ boss, Bill Bryden. Something about him made an impression on me. He made me an offer of Rs 750 a month. I was the first non-Britisher to be employed by the BCC in management. The day I joined—it was a gloomy day; John F. Kennedy had been assassinated that weekend—I was told that I would work with Indian Engineering Association, or IEA, a trade body of mostly foreign engineering companies, and was shown to a desk stacked up with files. My predecessor, I was told, had had a nervous breakdown!

In 1974, IEA, which started in 1895 as the Engineering and Iron Trades Association, decided to merge with Engineering Association of India (an Indians-led body). What resulted was the Association of Indian Engineering Industry, or AIEI. I had spent a decade in Kolkata and it was clear that AIEI would have to be based in Delhi if it was to lobby effectively. We were also clear about two things: one, we would not take on the government; at least not publicly. Whatever was unpalatable, we would convey behind closed doors. Two, we will provide platforms for the government where we don’t ask for anything.

The big trade bodies of the time were ASSOCHAM (the Associated Chambers of Commerce and Industry in India) and FICCI (Federation of Indian Chambers of Commerce and Industry) and their styles were very different. With just a Rs 10 lakh budget, we were laughed at for our approach. But we were clear that a professional approach would yield results. We have never to date taken up individual cases of companies that wanted us to lobby on their behalf. We had a standard response in such instances: to ask for detailed data. More often than not, that would be the end of such requests..

CII Really Took off Under Rajiv Gandhi
The first turning point for AIEI came with the 1975 trade fair that we helped organise. The Heavy Industries Minister those days, T.M.A Pai, came for it as also did Mantosh Sondhi, the technocrat behind the Avadi Ordnance Factory and Bokaro Steel Plant, and then Secretary of Heavy Industries. Sondhi was impressed and that gave us access into the government. The government then started asking us for suggestions on policy and other inputs. It helped us that Rahul Bajaj, the first big name from corporate India, became our president in 1978.

Still, the 1974-84 period was very tough. The first break came with Rajiv Gandhi, who, after the death of Sanjay Gandhi in 1980, was being groomed by Mrs (Indira) Gandhi into leadership. He was perhaps not comfortable with FICCI and ASSOCHAM because they represented the old world of Indian business—Modis, Birlas, Shrirams and others while we at AIEI were more his generation.

Less than a year after he became Prime minister, he decided to take us with him on his first overseas state visit to Russia in May 1985. At the end of that tour, he introduced us to a sceptical Indian ambassador in Moscow (Saiyid Nurul Hasan) grandly, “I want you to meet the people who will shape the future of India.” Our jaws dropped.

Few know this but it was he who gave us the name CII. By 1986, we had already changed our name to CEI (Confederation of Engineering Industry), but the very next year he said we should become a pan-Indian industry body. It took us four years to change our name (in 1991) overcoming strong internal opposition; we were metal bashers [reference to engineering firms], after all.

Bombay Club, Reliance and Godhra
There were those who were uncomfortable with the pace of economic reforms after 1991. (The so-called Bombay Club with) the likes of Rahul Bajaj, Lalit Thapar, Hari Shankar Singhania said, “Slow down, slow down… we are not ready.” We at CII (supported by Ratan Tata and others) countered that by: “You are overestimating the threat and underestimating yourself.” Rahul (Bajaj) and I had some heated exchanges on this but it never got personal.

In 1997, the government allowed zero-duty imports on capital goods, potentially benefiting companies such as Reliance Industries that was starting its (Jamnagar) oil refinery project. We made a presentation to the government that the duty structure was unfair to Indian companies because they had to pay duties on components and parts they imported as also bear excise duty. At an open house with then Prime Minister I.K. Gujral, a Reliance executive accused CII of misleading the government, a charge we denied. We even brought out advertisements but the government stuck with its plan.

Perhaps the toughest challenge came in the aftermath of the Godhra riots. In February 2003, (Gujarat Chief Minister Narendra) Modi had come to a CII function and we talked about security in the state and if it was safe for business to go there. Modi was angry. After his return to Gandhinagar, we had our members (we had about 200 in Gujarat) worried. I didn’t know anyone in the BJP and called Arun Jaitley. It was an evening that a cricket match was on and we sat in his house watching Tendulkar, and talked. For two hours. Jaitley wanted to know everything: Who I was, what CII was, who the office bearers were, what was their thinking... At the end, he told me Modi was coming to the Jaitley home for dinner and he would talk it over.

Some days later, we spoke again and Jaitley told me that Modi wanted an apology. That was out of the question. But I offered that we would draft a letter at the end of which we would say that CII regretted the misunderstanding. It was not an apology but we were sure that the media would make out it to be one. And, it did.

The evening I was leaving to meet Modi, my wife accosted me, “You just can’t do this....” Among our close friends are Anu Aga, Azim Premji, Jamshyd Godrej and several from the Parsi and Muslim communities. My answer was that I had two options: I could quit and say I will not do this. Else, I had to look after our members.

The Future for CII
One criticism of me at CII was that I didn’t plan a successor well. We had started planning at least 10 years ago because I was to retire in 1999, when I touched 60, but was asked to stay for five more years. Then, in 2002, I was asked by then president Ashok Soota to give my assessment of my second line. I rated my top 10 people on 24 criteria, each on a scale of five. The board members took my ratings, discussed among themselves, and selected the fifth-ranked (current Director General Chandrajit Banerjee) on my list.

Chandrajit has made a fine beginning; he’s brought back members who had drifted away—for instance, finance and banking guys from Mumbai who thought we were not serving them well. He must now have his own space without Big Brother (me) looking over his shoulder.

As for CII, as India goes global—we have 45 members in the US chapter of India Business Forum; I expect that will be 500 in 10 years—we have to aim to get respect. That should come from the work we do, how we do it (ethically, professionally) and how we compete. At home, if I can convince CEOs to take a smaller salary, live less ostentatiously, and have a sense of social responsibility, I would have done my bit.