The cornerstone of Indian economic reforms is the gradual removal of the

discretionary powers of government through clearly laid down policies that favour
none and do away with the need for corporates to beg for special treatment.
Unfortunately, even after more than a decade-and-a-half of reforms, the government
retains substantial discretionary powers. Discretion with respect to quick (or slow)
clearance of files, speed of licence awards, higher or lower tax imposition, smoother
(or slower) loan sanction, and including rewriting of policy for entire industries.

The Indian economy, by and large, functions around the government’s discretionary
powers. Whenever government changes, the wielders of these discretionary powers
also change, making matters worse for corporate lobbyists. In most cases,
businessmen hate political instability and would prefer continuity. However, reform
has the ability to effectively dilute the discretionary powers of government through
the establishment of independent regulators and a clear policy, as witnessed in the
telecom sector.

Irrespective of the level of reform, it is an accepted fact that corporate lobbying is a

necessary evil. It remains an integral part of the policymaking process of government
at all times; only its manifestations vary. In the last few days, India has witnessed a
raging debate on lobbying as it was raked up in the aftermath of a corporate feud that
reached the corridors of power at the Delhi Durbar. Lobbyists on either side have
been trying hard to tilt the government’s petroleum policy to their advantage.

It invited severe criticisms from the so-called anti-corporate ‘pro-people’ parties,

conveniently forgetting the fact that lobbying was several times worse before India
reformed. The Indian public now has a chance to witness how government responds
to fairly open demands from lobbyists on behalf of corporates.

Lobbying goes on all the time, mainly because the state retains so much discretionary
power. But even a much-reformed state will offer scope for lobbying. Therefore, it is
pertinent to ask, “Why not encourage an ethos that discourages behind-the-doors
lobbying?” The American experience in this regard should be an eye-opener, as
lobbyists in America are registered legal firms. Now, it is for Indian society to decide
whether we should allow covert backdoor lobbying or open transparent lobbying as
practised in the developed world.

Lobbying in India is at a nascent stage. Until recently, it was rated equivalent to

influencing government policy with money. With increased transparency in
governance, corporate entities realised that a more legitimate method is needed to
influence policymakers. Certainly, religion and caste play an important role in Indian
politics and are used to influence policy as more and more politicians resort to vote-
bank politics. Being politically savvy is considered an obvious prerequisite to
lobbying government effectively.

Winning a contract is one thing, but becoming a savvy local corporation in India is
quite another. A successful lobbyist needs to know how to make representations to
government, what tools and techniques can be effectively used to communicate with
MPs, MLAs, ministers, etc. These are both the obvious and arcane bits of knowledge
that empower lobbyist to understand better the working of the government.
European lobbyists have been very active in India in recent times. Today, lobbying in
Europe is a highly specialised discipline, often regarded as a high-end management
tool practised by lawyers, retired diplomats and former politicians to further private
and public interests with policymakers. Even in Europe, lobbying had been perceived
earlier as something involving bribery and other criminal acts. Nowadays, lobbying
has gone global and today’s lobbyists cannot act in isolation any longer, when their
clients’ interests are rapidly expanding internationally.

Since the reforms cannot ensure substantial reduction in the discretionary powers of
government, it is time that Indian corporates start hiring professional lobbyists.
Necessary safeguards need to be taken to ensure that lobbyists should not double up
as MPs and get free access to ministers who formulate important policies.

Moreover, a realisation should emerge within the social and political spectrum that
the Indian democracy has reasonably matured and lobbying needs to be recognised as
an integral part of the policymaking process. It needs to be regulated and
professionally managed for the betterment of everyone.
INDIA'S NEW LAWS ON CORPORATE LOBBYING "SHOULD BE
REASONABLE"
Posted on: Sun, 19 Dec 2010 20:09:05 EST

Symbols: BJAUF
MUMBAI, Dec 20, 2010 (AsiaPulse via COMTEX) --

As the Indian government considers a framework to regulate corporate lobbying, the

chairman of Bajaj Auto Ltd (BSE:532977) Rahul Bajaj last Friday said that
regulations should be reasonable and well-thought out.

"There is a need to find out where regulations come (into play) in businesses.
Generally, I am against [over] regulation. But I strongly believe that without any
regulation, it will be big fish eating small fish. There have to be regulations but they
should be well-thought out and reasonable," Bajaj told reporters on the sidelines of a
CII-organised event here.

Regarding Prime Minister Manmohan Singh's stand on tightening the existing system
to prevent leakage of recorded conversations, Bajaj said, "yes, surveillance is
necessary for national security and public interest. But privacy, dignity and self-
respect too are important."

Tapping of conversations would not necessarily work to prevent tax evasion, he said.

"I am not sure whether this will work for tax evasion. If the evasion is in crore, then it
is fine. But we need to see how many millions pay tax and there are so many who do
not. One cannot tap all under that guise," Bajaj said.

(PTI)