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Lobbying law will remove stigma associated with it

india Updated: Oct 29, 2013 01:37 IST

For better part of the last century, India was mired in a licence-permit-raj system in which wealth creation was considered to be a sin by many. So, it isn’t any surprise that lobbying is frowned upon much the same way as an industrial licence was some years ago.

Curiously, while lobbying is a dirty word at home, many Indian organisations including industry bodies and large conglomerations pay millions of dollars every year engaging firms to champion their causes in other countries where they have business interests.

Lobbying, as is understood and legitimately practised in matured economies, is not new to India. The process of consultation is central to any major policy- or law-making exercise. For instance, before a Bill is voted into law, the legislation is subjected to discussion. Likewise, India’s annual budget-making exercise is another case in point showcasing the tradition of discussion.

Each year, the finance ministry holds consultations with stakeholders who demand tax breaks and fiscal sops. Indian democracy is often criticised for sluggish decision-making, but if the lack of speed is because of the need to listen to a wide array of voices, the wait is worth the effort.

Global retail giant Wal-Mart’s disclosure that it has resumed lobbying with the US lawmakers on matters related to FDI in India and has spent $1.5 million on 50 specific issues, including those related to the Indian market during the last quarter, needs to be seen in this context.

Last year, a similar controversy broke out when Wal-Mart’s declared that it spent about $25 million since 2008 on lobbying activities that included “enhanced market access for investment in India.”

In India, there is no law that bars lobbying. But it may be about time to create a statutory structure for regulation of lobbying firms laying down the rules for mandatory disclosure of earnings, conflict of interest and compulsory registration of such companies.

A well-defined regulatory architecture, created on the lines of the US Lobbying Disclosure Act, will, apart from removing the stigma associated with the word, also eliminate opaqueness in dealings with the government.