Is CGPA the most important thing in IIT life?

Well, this is debatable and IITians would be divided in answering this one. I'll pen down my perspective here. The answer is even though it is important, its not definitely the most important thing. Now the next part is - it depends. If you are planning for higher studies in engineering it may be the most important thing. If you are going for higher studies in other fields, maybe not so important. For someone who is looking at jobs or startups in the future definitely not the top of your agenda. CGPA definitely sends out a signal to a person looking at your profile about your sincerity and hardwork. So if you are dealing with people with conventional mindset and who view academics as the screening factor it can be very important. If you are looking at IIMs then again its one of the criteria to score over others. Not to forget a lot of shortlists and final selections in placements are based on your grades.

Sounds contradictory, right. Well even though I've mentioned points in which grades can be the most important differentiating factor let me tell you why I think its not the most important factor. The answer is success and my definition of success here is excelling in one's particular field in the long run. And to me, the things that matter more would be the quality of the person, his passion, hardwork and directed effort in his field. Decisions at important junctures and luck are also important based on experience. CGPA is too minuscule a thing to capture all those aspects to play as the most important factor in the long run. But again, if you've got relaxed and thinking about caring less about your grades let me warn you if you compromise on grades you should back it up with something else to show that its not just lax attitude or lack of competitiveness that got you there. In my experience, people with better CGPA are more often than not are more hardworking, sincere and likely to succeed in future. Also lower grades often lowers your confidence which may hamper your prospects in the short run. Its one of those things that you rather would like to have than not. 

Seen people with 5,6,7 GPA doing better than 8 pointers and definitely seen the other way round. So know that there is no rule. My best advise would be to treat them as school percentages, always better to keep them high to keep parents, peers and society happy. A balanced approach is the best approach at the end of  the day.