Very often, lobbying activity and the outcome are related, though spurious if the researcher is unable to establish institutional details of the relationship. lobbying practices may or may not lead to corruption, writes Pankaj KP Shreyaskar
The importance and influence of lobbyists, pressure Groups and the interest Groups in decision-making have always interested the societies of the United States, the United Kingdom and the European Union. The ‘lobbying and special interest group’ phenomenon in the Indian context has not been very visible, though.
While the Marxists are known to venerate and celebrate class action, non-Marxists distinguishes the pressure group. Even though scholars recognise the constructive role of the pressure groups, they differ considerably among themselves. Prima facie, the pressure groups rectify the impact of one another and insulate society from apparent hazards from their own actions and counter-actions. The aforementioned reason is what maintains the equilibrium of the society through Governments.
lobbying might also be needed to head off unfavourable legislation pushed by political pressure groups. The financial-services industry has only recently woken up to the need to get organised in Brussels, where the 2007-08 crisis provoked a lot of political hostility. Special interest groups are key constituents not only for the political parties but also for the individual politicians since the former possess valuable resources. In some of the democracies, these interest groups become a source of funding for the election campaign.
The decision to lobby by the interest group is not a random event. An interest group’s decision to lobby is dependent on the strategies of other groups and the expected outcome of the lobbying process. Alternatively, therefore, a group may like to lobby only when it is confident of being successful in the process. However, any data source regarding lobbying in India is almost non-existent. There are no institutional arrangements for disclosure of lobbying activities. It is stressed, however, that the data relating to lobbying, if is measured appropriately the returns to lobbying would be enumerated with better level of confidence. Very often, lobbying activity and the outcome are related, though spurious if the researcher is unable to establish institutional details of the relationship. lobbying practices may or may not lead to corruption. Corruption levels in a country could be an outcome of lobbying actions, among other things.
lobbying works through four basic channels: Elite representation, organised associations, private contractors, and business houses in India. Elite representatives are the Members of Parliament. Organised associations, either through their staff members or through the special envoys, engage themselves in the process of lobbying. This is a comparatively recent phenomenon in India. Private contractors or entrepreneurs involvement in the lobbying process hinge on their extensive contacts. The final type of lobbying is exhibited by the business houses, sometimes disguised as journalists or as business-relation officers.
Despite its negative connotation, at least in India, the act of lobbying can be both an activity that can make bribing irrelevant if it succeeds in influencing policy and one that makes bribing easier if it succeeds in undermining law enforcement. lobbyists and special interest groups can bring in invaluable information in the decision-making processes, yet social scientists have analysed them as the pluralistic vision of a democratic state, more so in the Indian context.
lobbying creates its own momentum. A company, that sees its competitors doing it, will follow suit to avoid losing out. Moreover, it seems to work. Among the Fortune 100 companies, the 10 that lobbied most in 2010 paid an average effective tax rate of 17 per cent; the 80 that lobbied least paid an average of 26 per cent.
lobbyists in India are representatives of many interest groups — business groups, labour unions, political parties, students organisations, and community associations. The influence of the interest group lobbying has varied with time and space in India. It is, however, seen that the environmental lobbyists and business lobbyists have been quite effectively influencing the decision-making process in India. People of India have not forgotten the lobbying processes surfaced in the defence deals, gas deals, and infrastructure deals, to name a few. The recent controversies of influencing decision-making through the kickbacks by Walmart and Alstom have caught the imagination of the nation.
The British subsidiary of the French train and turbine-maker, Alstom, reportedly paid around $8.5 million in bribes over a six-year period to win transport contracts in India, Poland and Tunisia, the British fraud prosecutor has alleged. Amazon’s foray into US-based lobbying on foreign direct investment follows a similar disclosure by Walmart in 2012, that triggered a probe into Walmart’s lobbying activities by the then Congress-led Government. While Walmart did not admit to lobbying on any India-specific issues last quarter, the vague descriptor, “discussions regarding investments overseas”, was listed among the firm’s lobbying activities.
(The views expressed here are the writer’s own)