In response, the CII, whose credibility was in any case suspect, formally announced the withdrawal of its recommendation on bank closure. Despite this, the government, which had once again displayed its 'industry-friendliness' and endorsed the seriousness of the CII report by formally receiving it with much fanfare, chose to declare that there was never any question of considering the CII's report when formulating policies aimed at restructuring India's banking system.
 
This is not the first time that the CII had to go back on or even challenge policies it had vociferously supported in the past. It first supported import liberalisation as a must in a globalising economy. And then, it produced reports documenting the adverse effects of excessive liberalisation and made much of the devastating impact that liberalisation was having on India's capital goods sector. Subsequently, it celebrated the virtues of freeing foreign investment from controls. But soon, finding foreign investors dropping domestic collaborators as partners, it declared that these investors had no long terms interests and were not playing fair.
 
These contortions the organisation has been through are the result of the peculiar relationship between the State, sections of industry and industry spokespersons during the years of liberalisation. India's liberalisers, scattered now amongst almost every political formation, have over the years followed what is proving to be a tiring routine. First, they virtually set up a well established domestic target for liberalisation. Second, a set of agents are found to render that target soft. And, finally, they make a big push to get the government to implement, either through 'independent' proxies (like the TRAI) or through parliamentary legislation, the means to achieve their specific goal.
 
Of the many agents chosen to 'popularise' economic reform, a leading one was the Confederation of Indian Industry (CII). For those with no lapse of short term memory, the CII would be remembered, as it is by the older and more circumspect industry associations like the FICCI and ASSOCHAM, as an upstart born out of what was the Confederation of Engineering Industries, which grew into the leading 'spokes-organisation' of Indian business during the years of liberalisation. And, perhaps this was not unrelated to the fact that it was chosen by those pushing for liberalisation in India. Though, like much else relating to the nexus between the State and big business, the matter is difficult to prove, the CII is seen by many as owing its success to the fact that it was and is cultivated by the liberalising sections which have come to dominate economic decision-making in India.
 
In fact, spokesmen of the CII have, initially with support from the official media and subsequently from the officially sponsored private media, been projected (often successfully) as 'the' experts on what should be done in the realm of economic policy making. If policies promoted initially by the IMF and the World Bank were to be 'internalised' by this country, it was not sufficient that persons with a track record in or on lien from these institutions held positions of power in government. Such policies had to be owned even by representatives of the most powerful lobby influencing political decision-making in India's democracy, viz. big business. This was particularly necessary because domestic business interests, which had thrived on State support and protection during the heydays of India's post-Independence development, were seen as one of the prime vested interests ranged against the liberalising agenda. Getting representatives of business to support liberalisation was seen as more than half the battle won. In the event, just as being 'red' and expert mattered in some erstwhile centrally planned, socialist economic systems, being 'private' and expert mattered in liberalising India.
 
This process of creating pro-liberalisation experts had its pitfalls, however. Media created experts and 'expert-organisations' have a tendency to find their own tangents, which are not always palatable to the powers that sustained their livelihoods, viz. business itself. Not surprisingly, the CII has routinely had to backtrack on the 'expert' recommendations it makes. The controversy over bank NPAs is one more such instance. More responsible business interests would have liked to be party to a sensitive and diplomatic way of dealing with the problem of bank NPAs. But the aggressive front men in the CII have rushed ahead and goofed again. It is time they realised that in being forced to ignominiously retreat, they have paid the price of cronyism.