Chambers of Commerce | Need | Functions | Benefits

Why are Chambers of Commerce formed?

Chambers of Commerce are formed for the purpose of protecting and promoting the interests of business and the business community. The membership comprises of those connected with business such as merchants, bankers, brokers, industrialists, professionals and financiers. They are basically voluntary associations.

Chambers of Commerce do not restrict their operations only to a particular trade or industry. They promote the business interests of varied businesses in a particular region, country or on a global level.

Need for Chambers of Commerce

Chambers of commerce were formed out of the desire of business to have a body that would safeguard and promote their interests. The need for Chambers of Commerce arose due to:

1. Overwhelming influence of the government: The government exerts a great deal of influence on the way business is conducted through its various policies, rules and regulations. An individual businessman would not be able to oppose restrictive policies or recommend steps. Therefore businessmen felt the need to have a body that would protect their collective interests and represent to the government their grievances and suggestions.

2. Tyranny of trade unions: Workers in various industries combined to form trade unions. The rise of communism in various parts of the world and emergence of the communist parties as a strong political force gave further impetus to the growth of the trade unions. Many businesses which had strong trade unions, began to suffer &om strikes, go-slow tactics, gheraos, work stoppages, damage to assets etc., Businesses, especially the textile mills in Mumbai and Ahmedabad were forced to close down unable to meet the unreasonable demands of the trade unions.

This created a strong need among the business community to organize themselves and provide a united front leading to the formations of Chambers of commerce.

Functions of Chambers of Commerce

Chambers of Commerce perform a number of useful functions in promoting the interests of the business community. Some of the important functions are:

1. Performing the role of spokesman of the business community.

2. Collection and communication of information relevant to business and trade to members.

3. Making representations to government regarding any legislation which is detrimental to their interests. For example, Chambers of Commerce have made representations to the government regarding the Fringe Benefit Tax (FBT).

4. Making representation to the government regarding any proposed legislation. For example, Chambers of Commerce have made representations regarding the proposed Competition Commission.

5. Requesting the government for any new legislation to promote trade and commerce. For example Chambers of Commerce have been representing to the government the need for an exit policy (freedom to close down unviable businesses).

6. Requesting the government for changes in existing legislation. For example Chambers of Commerce have been requesting the government to amend labour laws (making them more flexible) so as to enable them to hire and fire workers according to the business requirements.

7. To serve as a forum for settlement of disputes among members by means of Arbitration.

8. Maintenance of information and statistical bureaus in order to provide necessary information to its members.

9. Organizing industrial fairs and trade exhibitions to create awareness among buyers and promote members businesses.

10. Organizing lectures, seminars and workshops for the benefit of its members. For example Chambers of Commerce conduct meetings and workshops after the Union Budget is presented to make members aware of the changes in tax provisions. Discussions with the Finance Minister may also be organized to enable members clear their doubts, air their grievances and make suggestions.

11. Providing support to members who are contesting elections for Legislative Assembly or Parliament.

12. Providing library facility for knowledge enhancement of members.

13. Running educational programs, conducting examinations and awarding diplomas to members.

In essence, chambers of commerce take all steps to promote the interests of the business community. They play an important role in protecting the interests of their members and fostering trade, industry and commerce.

Benefits of Chambers of Commerce

To the government

1. The Chambers of commerce provide feedback to the government with regard to members opinions of government policies.

2. It gives suggestions to the government to promote and safeguard interests of the business community.

3. It provides inputs to the government for framing suitable economic policies.

To the members

1. It serves as a forum where members can come together, discuss common problems, share information about best practices etc.,

2. They can settle disputes that might arise between members.

3. They can conduct research with regard to various sectors of the business and about the emerging market opportunities in India and abroad.

4.They can conduct training programs to equip members with new skills and knowledge.