The reason why we came into being.
The Forum of Free Enterprise is a non-political and non-partisan organization, established in 1956, to educate public opinion in India on free enterprise and its close relationship with the democratic way of life. The Forum seeks to stimulate public thinking on vital economic problems of the day through booklets and leaflets, meetings, essay competitions and other means as befit a democratic society.
The circumstances under which the Forum of Free Enterprise was founded is very interesting. It is a great tribute to its founder, A.D. Shroff, who took upon himself the task of establishing the Forum under challenging circumstances.
In 1956 anti-private sector feeling was running high. Though the First Five-Year Plan had ended without delivering the visualized economic growth, the Congress Government at the center had decided to go ahead with its decision of a socialistic pattern of society for the country. The Marxist rhetoric had already become the accepted lingua of the day and the exposure of some scandals in 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.read more
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.