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private industrial houses had tarnished their reputation. In the
emergent conflict between two blocks of superpowers, USA and USSR,
despite India’s avowed neutrality, there was a more pronounced leaning
towards the latter.
The then Prime Minister, Mr. Jawaharlal Nehru, had already embarked on
the large-scale nationalization of industry – trade and transportation
were already nationalized and insurance was on the verge of being
nationalized. Mr. A.D. Shroff, eminent economist and the then Chairman
of New India Assurance Co Limited, one of the largest and fastest
growing insurance companies in the country, fought a hard and losing
battle against nationalization. He argued that there were bad eggs in
the business, but regulation and disciplinary action were the need of
the day and not nationalization. But the government was not even
listening.
Mr. Shroff’s criticism of government grew even more trenchant. He
believed that Nehru’s brand of socialism and comprehensive planning –
which stifled individual initiative and enterprise and encompassed all
aspects of life – was fast turning India towards becoming a totalitarian
state. Mr. Shroff was agitated about the blatant manner in which the
government propaganda machinery was being used to discredit the private
sector and romanticize socialism.
In those days, Nehru and his ministerial colleagues liked to publicly
allege that private enterprise was incapable of undertaking large-scale
and rapid economic development and that it led to the concentration of
wealth in the
hands of a few people. Nehru himself had gone so far as to say that
‘private enterprise and democracy are incompatible’.
The then Minister for Commerce and Industry at the Centre, T.T.
Krishnamachari, had declared that ‘private enterprise had failed me’.
A.D. Shroff, typically, could not have let such a claim go unchallenged.
He addressed several public meetings in support of the private sector.
At the same time, one by one, the restrictions on private enterprise
increased – nationalization, licensing, quotas and a growing mass of red
tape began to smother industry and breed enormous corruption.
Transportation and insurance were among the first industries to be
nationalized.
A.D. Shroff, true to his nature, chose to launch his own war against the
doctrine of State socialism whose regimentation and control, he said,
breed red tape, waste and corruption. His first target was those in
government who deliberately chose to equate private enterprise of the
twentieth century with the laisez-faire capitalism of the nineteenth
century – the latter, he stressed, was as dead as the dodo. He
sarcastically suggested that socialists of the day who denounced
capitalism should find ‘some other innocent pastime than tilting at
imaginary windmills’.
At the same Shroff was conscious that private enterprise needed to clean
up its act. He prepared a Code of Conduct for industry and said, ‘It is
absolutely imperative that thinking people in the private sector should
make an organized endeavour to establish the highest standards of
integrity and efficiency.’ He was also for stringent punishment of those
who did not play by the rules.
Shroff, along with a few other intrepid businessmen, soon decided to set
up the Forum of Free Enterprise, which came in to being in July 1956.
The Forum was a vehicle for like-minded businessmen to counter
government propaganda against private enterprise. The Forum believed
that in a democratic society, educating public opinion especially the
intelligentsia, was the best antidote to the doctrinaire policies of the
State.
On 18th July 1956, the Forum’s manifesto which was published in several
leading newspapers and had outlined its policies, sparked off a heated
debate around the country. Within days of its publication, over a
thousand letters were received by the Forum from across the country,
offering suggestions, support or assistance. Letters came from villages,
talukas, districts; some were scrawled on little postcards. To Shroff,
it was a gratifying sign that the idea of the Forum had supporters
across the country, coming across economic barriers.
The government disapproved of the Forum and found different ways of
making this known. Industry, taking its cue from government, also kept
its distance. Nobody had doubts that under Shroff’s leadership it was
bound to be controversial as well as stringently critical of government.
Though many industrialists were frustrated with government policy and
agreed with the Forum’s philosophy, few were willing in those days, to
appear publicly on the Forum platform or be seen as its supporters. At
the launch of the Forum, Shroff said that thousands of people had
expressed their support for free enterprise but admitted that they were
afraid of inviting the wrath of officialdom. Despite their opposition to
the Forum, Shroff’s vast influence over business and industry ensured
that he could assemble its Council of Management with some powerful
names such as S. Anantharamakrishnan, S.K. Sen, M.A. Sreenivasan, Sardar
Mohan Singh, Narayan Dandekar, M.R. Masani, S.J. Haji, Col. Leslie
Sawhny, F.S. Mulla, T.M. Desai, K.C. Cooper, Chimanlal B. Parikh, FP.
Mehta, M.A. Master, C.M. Srinivasan and K.G. Khosla.
A whisper and innuendo campaign had started to claim that the Forum was
foreign-inspired and was financed by the United States. ‘The Forum,
claimed, is genuinely swadeshi in its genesis and operations as any
other national organization, not excluding the Congress.’ The suggestion
that the Forum received American financial assistance, was described ‘as
fantastic as expecting to receive remittances from the man in the moon’.
Finally, Nehru decided to be open about his displeasure. Manubhai Shah,
then the high-profile union minister of commerce, called Shroff for a
meeting and informed him of Pandit Nehru’s disapproval. He said that
Nehru wanted the Forum to be wound up. Shroff heard him out in silence
and then simply raised his palms upwards saying “Have you seen these?
These are clean hands, you cannot do anything to stop me.’
Forum not only anticipated the opposition but also was prepared for it.
One of Mr. Shroff’s biggest strengths was his ability to marshal his
forces and build support for his stand before venturing to take on an
issue.
This preparation was visible at the Forum too. He took care to ensure
that the Forum was seen as apolitical. In his inaugural speech he said,
‘We are not a political organization. Our main, if not the only,
objective is of an educative character.’ In the nine months before the
launch of the Forum, various people had pressed him to start a political
party with the Forum as the nucleus. Shroff categorically announced that
he had no such intention. ‘However’, he said ‘we shall continue to be
undeterred by official frowns or even threat uttered to individual
workers of the Forum…’ It is a tribute to Shroff’s sagacity that the
Forum was kept completely apolitical and could deflect a lot of
criticism.
In fact the Founders insisted that the Forum should always remain an ad
hoc and unregistered body. Even its funds were not raised through a
permanent corpus. The Forum preferred to mobilise every year small
amounts from thousands of its members/supporters. Even to this day, the
Forum raises funds only on a yearly basis and only as much as is
required in any given year. He used to say that when the Forum stopped
playing a meaningful role in society, it would automatically cease to
get support and should then logically cease to exist.
The Forum has no corpus and depends on contribution from members,
admirers and friends for its survival. Some of its activities are
sponsored, while many others are dependent up on the support from
members. The membership fee received from members and student associates
is very modest and does not even cover the expenses spent for servicing
each member or student associate. This is as a matter of conscious
decision to spread the message to maximum number of persons, especially
students.
Forum’s concept of free enterprise was one with a social purpose. The
Forum, he said, stood for every individual in the country having the
largest scope to make a contribution within the framework of planned
development through his initiative and enterprise. And that it is ready
and capable of making a substantial contribution to society provided it
is not handicapped and hamstrung by the sort of controls and regulation
to which it was subject. ‘We claim for ourselves the right and liberty
to criticize when we must,’ said Shroff.
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