CII@125: The Tale of Two Associations

19 Jun 2020

The journey of the association formed in 1895 to CII in 1992 has been eventful and intertwined with the journey of India.

At the doorstep of World War II, India was still dominated by the British – they controlled the service and industry sectors, except cotton textiles, sugar, cement and paper, with a near monopoly in industries such as coal mining, tea and jute. TISCO (now Tata Steel) was the largest Indian industrial house, but around 1939, the British groups controlled 713 companies aggregating Rs. 1,890 million of paid-up share capital.

The start of the Second World War presented opportunities for growth for industry in India and many companies came up in the 1940s such as Aluminium Corporation of India by the JK House, Tata Chemicals, TELCO, Hindustan Aircrafts Limited, Hindustan Motors, TEXMACO, and Premier Automobiles. However, many of the factories were taken over to manufacture ammunition. Indian industry was denied the opportunity to produce big items such as ships, aircrafts and cars for the war, so it could not make that big leap into more advanced production. 

At this time, many small Indian firms set up the Engineering Association of India (EAI) in 1942 under the aegis of the Indian Chamber of Commerce. Indian industrialists formed this new Association with Devi Prasad Khaitan as the first President of EAI. This new Association became the voice of the small and medium-sized enterprises manufacturing items such as umbrellas and buckets. 

In this tumultuous period of World War II and the Quit India Movement, the EAI helped its Members navigate the complex web of rules and regulations, and post-war, arrive at a commensurate working pace.

The EAI also took on a new role in the post-World War II period: it started setting up affiliated associations for specialised services such as the Fan Makers’ Association of India in 1946, which was soon followed by three others. Till date, the Fan Makers’ Association exists and is an affiliated association of CII.

The post war period thus saw two strong associations for the engineering industry – the IEA and the EAI. While IEA was dominated by the British companies and stronger in the Eastern and Southern region of India, EAI concentrated on the Northern and Western Regions.

The post-war period saw another trend intensifying: growing disparity between the haves and the have-nots and concomitantly, labour-related issues. Captive production during the war years saw many manufacturers produce vast quantities, and industry was perceived as making inordinate profits. The war also saw the prices of essential commodities shoot up, which resulted in hardship for common people. The end of the war saw large scale retrenchment of labour and recompense-related issues swirling around, and both IEA and EAI dealt with the complex web of issues.

By the end of 1945, the labour issues were overrun by strikes. Adding to the complications were the strained relations between the Association and the Labour Commissioner on matters such as dearness allowance. The Labour Adjudicator, whose role was to look into the minimum wages paid to unskilled workers, threw the Associations off balance when it judged a case favourably for skilled mechanical workmen of hydraulic press companies. Labour issues continued to dominate Government-Association interactions for many years.

The changing socio-economic landscape opened up a new avenue: the importance of economic development, and since it was felt that Independence was imminent, a handful of Indian industrialists, led by JRD Tata, came up with ‘A Plan for the Economic Development of India’, popularly known as the Bombay Plan. This had the approval of Sir Purshottam Das Thakurdas, JRD Tata, GD Birla, Sir Ardeshir Dalal, Sir Shri Ram, Kasturbhai Lalbhai, AD Shroff and John Mathai, who were signatories to the plan. 

With a clear goal of doubling per capita income in the next 15 years, the plan suggested radical ways of achieving that goal: greater state control which would mean industrialists would have to give up both control and power. The post-war situation in the country called for greater planning, and the rising local sentiment weakened the Government’s hold. Consequently, when the Government presented its Budget for 1947-48 in early 1947, the Indian Chamber of Commerce made its displeasure clear.

Lord Mountbatten assumed charge of India in March 1947 and by June that same year, the Indian Independence Act was passed, putting an end to a very important chapter in the lives of millions of Indians, several of whom faced an uncertain future in what they considered their homeland.

India was independent, but divided into two countries, and Indian industry had to come to terms with a new reality. The work for the two engineering associations, IEA and EAI, was set to expand greatly as India marched towards development on her own terms.

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