Should business lobbying be made legal in India?

MBAUniverse.com has started a new expert series of GD PI WAT preparation for MBA Admission 2014. This series of articles will help aspirants prepare for their GD PI WAT by providing them valid contents, probable topics and experts advice to help you succeed during admission process at various B schools. This article is based on the GD Topics “Should business lobbying be made legal in India?” to help you provide inputs for your group discussion rounds.

 

Background
The country is passing through the fierce debates on Business Lobbying. Lobbying in fact are the attempts made by certain Corporate Groups to influence the direction of legislative policy of a country/state in such a manner so as to bring benefits to them and safeguard their interests.

 

Key Points
The objective of the lobbyist is to achieve the goal of maximizing their interests. It can be done by influencing the legislators, members of Parliament and create a lobby to bring forth and get the legislation passed in favour of the Corporate Group.
 

Lobbyist may be an individual or a group of individuals working for their employer or as an agent to them.
 

Such people can be leaders of labour Unions, Corporate representatives, even legislators, bureaucrats, leading advocates exercising influence in legislative circles, or other private interest groups. India does not have any clear regulation for or against lobbying, especially when it comes by the name of lobbying.

 

Arguments for the topic 

  • Whether it was ‘Enron’ – Dabhol power project in Maharshtra, Foreign Investment in corporate sector, big defence purchases, Infrastructure development and now Foreign Direct Investment in multi brand retail- all have been shadowed by the issue of lobbying. The person or the company lobbying for certain favour can not lobby till our government, legislative body- Parliament or the state legislature have not considered some path to move on. Lobbying would only smoothen the process.
  • Various Industry and commerce associations, bodies and some private firms such as Federation of Indian Chambers of Commerce and Industry (FICCI), Confederation of Indian Industry (CII), National Association of Software and Services Companies, Vaishnavi Corporate Communications owned by Niira Radia, DTA Associates managed by Deepak Talwar, are among the top lobby groups.​

When so much of lobbying is done by the registered and legal firms and companies in the guise of some or other name and it is a well known fact, making lobbying legal will add to the government’s income by levying good amount of fee and charges on the same. Where does the amount, being paid now on lobbying, go – is anybody’s guess. A transparent legislation will definitely solve this ambiguity and loss of income.

  • Many countries like USA, Germany other European countries have made the lobbying legal with specific conditions like quarterly disclosures on amount spent and the manner in which the same has been spent or so. This provides vital information and transparency to lobbying practices.
  • With the potential growth more and more companies will engage lobbyists who can directly interface with politicians and bureaucrats and push their agenda. Lobbying, whether legal or illegal, will continue to remain integral to Indian businesses and politics. Doing away with it or making it illegal is not an option. It will be better for our legislators to make the Business Lobbying legal, of course with certain specific clauses to have transparency, at least to the extent the national interests are watched.
  • Making lobbying legal will bring forward open debates and discussions on all the forums. It will become possible to understand for one and all which option might be better. These lobbyists and representatives of their companies will openly participate in such debates with the pros and cons on the performance and product.
  • Think of the money, spent on lobbying in a single year, if made legal, at least a major part of it will find its way to treasury. At present it forms a part of unaccounted money going into the pockets of politicians, bureaucrats and other influential lot, the cost of which will eventually be recovered from the common people in the country.
  • Apart from saving the millions of dollars the country may see the rampant corruption in the name of lobbying fading away.
  • The Indian government itself has a lobby firm presenting its case with the American lawmakers, while a number of Indian companies and entities also indulge in lobbying activities in the US through their respective lobbyists. At various platforms like in U.N., World economic summits, in sports, in organizing Olympics, commonwealth games etc. countries lobby their stake. Lobbying in fact brings more competitiveness and improvement in quality as the things are to be explained and highlighted in comparison to any other stake holder. India would gain a lot by making lobbying legal.

Arguments against the topic 

  1. The common man of India, who is otherwise reeling under the pressure of corruption and unemployment, will be left penniless once lobbying is made legal. All the majors will lobby for their interests in the economy, will facilitate the entry riding the common man who hardly earns his bread and butter. Those who have more power and pelf will become greater lobbyist and will watch their interest while the common one will stand nowhere.
  2. National interests will be cornered as the lobbyists will have one line motto of watching their own interest and will not at all be concerned with the country’s interest as they will not be from this country.
  3. Lobbyists will make the corruption legal. The politicians, influential people, will still garner their share from the lobbyists at the National cost.
  4. Legislators-who are the law makers of the country and are responsible for framing laws that should bring all round development in the country- if influenced by the lobbyists, may get inclined towards lobbyist’s interests.
  5. Lobbying in defence production and purchases might put national security at stake.
  6. India has lot of complexities and problems scattered over the entire country. One part has different problem than that of other part. The lobbying company has no penetration of it. The government might simply gamble on the tactics of lobbyist and that might become harmful in future.
  7. There is no mechanism in India to bring accountability to lobbying, and publicly reveal the lobbying positions of companies and the money spent. Self-regulation in lieu of legislation is often proposed by Indian industry. In India, nobody knows the lobbying position of companies, leave alone looking for consistencies in lobbying positions and their impact on issues on sustainable development. Making it legal will add to the woes of Indian business.

Concluding remarks -The efforts made so far in India
The Planning Commission has set up an expert group to look into the processes that comprise lobbying. However, given the political exigencies of framing policies and complex nature of polity, this task will require the consummate skills of great statesman.
 

Lobbying has now become a well established service industry although known by different names like –Public Relations, External Affairs Managers, Environment Management Experts, etc. Various established Associations, Federations, Confederations of Industry and commerce etc. function as lobbyists to get the policies framed in favour of Corporates. Lobbying industry has been placing its demand for clear and transparent laws in countries like India where no clarity on the issue is available. So it is high time that India should decide to make the lobbying either legal or illegal by framing detailed and clear policy.