Regulating the ‘swamp’
India urgently needs a lobbying law
When Donald Trump famously vowed to “drain the swamp” on the campaign trail, he displayed a surprising ignorance of the dynamics of the business-political complex that is matched only by Indian policymakers and investigative agencies. “The swamp” to which he referred is the crowd of lobbyists who swarm all over Washington DC. Their presence may not reflect the most attractive facets of the policy-making establishment, but they reflect the fact that lobbying is an inescapable characteristic of any economy with a vibrant business ecosystem, especially one that functions in a democratic polity. Every company worth its bottom-line makes an effort to shape policy to suit its needs. Whether the issue at hand is benign (such as, say, urging subsidies for electric vehicles), harmful (relaxing environment norms for coal-mining, for example), or in the national interest or not are judgement calls for the government of the day.
In India, where the secretive habits of the licence raj linger in terms of opacity in policy-making, lobbying remains a grey area. It is neither recognised nor regulated. Yet, the irony is that governments are subject to it for sure – the mushrooming of “public affairs” departments in the booming public relations business is one index, and the national capital continues to abound with fixers of all hues offering to leverage their contacts on Raisina Hill and the Bhavans around New Delhi for a fee and the occasional inducement. In the absence of a specific statute or even “guideline” — a favoured governance technique — this state of suspended animation opens the field for a range of illegal activity that is hard to detect or control, even as it queers the pitch for institutions looking to influence policy changes for perfectly legitimate reasons. The issue came to the fore recently when the Central Bureau of Investigation alleged that AirAsia tried to influence India’s international flying regulations through lobbyists. But nothing reflects this dichotomy better than successive Indian governments’ approach to middlemen in the defence business. The Bofors scandal of the mid1980s resulted in a blanket ban on middlemen for defence purchases, even though they perform a service worldwide in enabling governments to evaluate a range of choices and negotiate optimum deals. In 2014, the National Democratic Alliance allowed middlemen back in, but hedged their re-entry with so many conditions — such as delinking their commissions to the outcome of the negotiations — as to render them pointless.
In the US and some western European jurisdictions, lobbying is subject to disclosure statutes that make it mandatory to register, declare their client lists, activities, fees and itemise expenditure. Although such disclosure laws do not eliminate corruption, they allow for an admirable level of transparency. They make it possible for journalists and the general public to access information on which lobbyists had been paid, by whom and for what cause, and to track the outcome in terms of policy-making. Many cases of corruption come to light simply by accessing public records. India would do well to emulate this best practice rather than impose on its politicians and bureaucrats a plethora of unrealistic restrictions under the Prevention of Corruption Act and similar statutes and decline the public Right to Information requests on flimsy grounds. A clear lobbying law may not earn ranking points on the Ease of Doing Business Index, but as a means of introducing transparency at the intersection of business and politics, it would certainly burnish India’s reputation.