Why not legalise lobbying business in India?

The one big takeaway from the Radiagate scandal—which exposed the murky nexus between power brokers, politicians and a section of the Indian media —is the urgent need for lobbying laws in the country. The revelation that a high-profile lobbyist, Niira Radia, was able to pull strings to influence policy and opinion-makers, including several prominent journalists, to get scam-tainted A. Raja his telecom portfolio, has caused a nationwide furor. The brouhaha has also spotlighted the need for statutory laws and regulations for corporate and political lobbying 
in the country.

By Neeta Lal

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Published: Sun 12 Dec 2010, 9:31 PM

Last updated: Thu 2 Apr 2015, 10:15 AM

Interestingly, the word ‘lobbying’ – or the art of influencing government’s policy making – has a British provenance. It refers to times when sundry vested interests would try to influence the policy decisions of British legislators by hobnobbing with them in an area called the vestibule or the ‘lobby’, adjacent to the legislative chamber!

In contemporary times, however, the term ‘lobbyists’ has a wider application. And though it is usually lawyers, retired bureaucrats or corporate communications experts who work as lobbyists, legislators are also known to ‘lobby’ to influence the formation of public policy by other governmental departments. For instance, American lobbyists — mostly lawyers—engage with legislators to play a vital role in framing laws. Currently, there are about 1,900 firms, with 11,000 lobbyists, registered in Washington, DC alone.

In America, unlike India, lobbying is a legal and well-established practice. The country has statutory rules and regulations for lobbyists who are governed by the Lobbying Disclosure Act of 1995. The act defines and requires professional lobbyists to register with the Clerk of the House and the Secretary of the Senate.

Lobbyists are also required to submit a detailed report of their activities in the US Congress and other state legislatures, including whom they met and how many times, once every six months. To further strengthen the ethics code for lobbyists, the US Congress also introduced the Honest Leadership and Open Government Act in 2007, which contains a comprehensive lobbying code. Last year, President Barack Obama also signed two executive orders to downsize the influence of lobbyists at Capitol Hill. The orders ban lobbyists from giving gifts to lawmakers or even pay for their meals. Any lawmaker or lobbyist found violating the Lobbying Disclosure Act faces a stringent fine of up to $200,000 and/or a jail term of up to five years.

However, India offers no such legal framework for lobbyists even though the practice is technically not illegal in the country. Perhaps the closest approximation to any kind of law governing lobbying in India, point out legal experts, is Section 7 of the Prevention of Corruption Act. But even this section is a convoluted one where the onus is on the accused public official to prove that he was not offered a “gratification” to influence his policy decision. The practice therefore continues to be a largely surreptitious one, a quintessentially cloak-and-dagger affair between key players—political parties, bureaucrats, advocates, business interest groups and communications experts. Indian corporate lobbyists insist that they act as a “bridge” between companies and the government. Many even brand themselves as “advocates” or “channels” which, they say, helps their clients better understand the country’s policy environment.

Many other lobbyists come in the avatar of “external affairs managers” and “environment management experts”. These usually operate via public relations outfits discreetly servicing their client’s lobbying needs. In fact most sizeable Indian companies nowadays maintain dedicated teams for lobbying their cause with the authorities.

Lobbying, argue its advocates, is an essential part of the democratic process. In order to engage with policy makers, organized interests need to undertake advocacy campaigns to explain their positions to lawmakers and government through credible third parties, they say.

However, with a tsunami of corruption scams rocking India in the past few months, demands for more transparency in the field of lobbying have become increasingly strident. The Planning Commission has also recently constituted an expert committee – comprising industries and government secretaries—to engage with the industry associations and seek their views on making lobbying “transparent” and “representative”.

But is such a thing possible in India? Lobbying has always carried a negative connotation in the country with lobbyists preferring to operate in a subterranean, grey area. They are rarely upfront about their clients. For instance, who knew of Niira Radia despite her high-profile clientele and the fact that she charged a few percentage points of India’s GDP as commission?

Will such well-entrenched interests welcome the arrival of a constitutional framework which dictates how they ought to operate? It is precisely for this reason, point out pro-regulation lobbyists, that the government needs to expose corruption through greater transparency, telling people who influenced policy and at what cost.

The exponentially growing Indian economy – expected to touch 10 to 11 per cent growth in the next two years—and a rapidly burgeoning domestic market present mouthwatering opportunities for global businesses to do commerce with India. They are all eyeing the great India growth story with considerable interest. This scenario will push more and more companies to engage lobbyists who can directly interface with politicians and bureaucrats and push their agendas.

In other words, lobbying will always remain integral to Indian businesses and politics—legal or not. Ergo, doing away with it or making it illegal is not an option. This subversion can lead to skewed policies, especially in a country like India which is in the process of establishing a larger institutional framework for which the government needs creative inputs from various experts. As long as lobbying does not lead to “policy or regulatory capture”, climaxing in the government or regulators getting so influenced by lobbyists that it results in an iniquitous regulatory framework, it should be allowed.

However, given the nuanced complexities of India’s polity, and the push-pull dynamics of competing interests, this task will require the consummate skills of a juggler!

Neeta Lal is a New Delhi-based senior journalist

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