Lobbying is integral to policymaking

KP Sunny
Posted online: 2008-07-21 01:34:54+05:30

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.

The writer is deputy director (economic services), National Productivity Council, New
Delhi. These are his personal views

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