Regulating Lobbying

What is the issue?

• Recently, the CBI alleged that AirAsia tried to influence India’s international flying regulations through lobbyists.
• It is imperative to look at the varied issues in relation with the reality of lobbying.

What is lobbying?

• Lobbying refers to the practice of influencing the policy decisions of the government.
• It refers to the business classes' efforts to shape the policies to suit its needs.
• The decisions may be benign such as urging subsidies for electric vehicles.
• It could also be harmful like relaxing environment norms for coal-mining or having an impact on the national interest.
• Lobbying is an inescapable characteristic of any economy with a vibrant business ecosystem.
• This is particularly prominent in systems that function in a democratic polity.

How is lobbying in India?

• The secretive habits of the licence raj still linger in terms of opacity in policy-making.
• Amidst this, lobbying remains a grey area, which is neither recognised nor regulated.
• Yet, the irony is that governments are subject to lobbying for sure.
• There is absence of a specific statute or even “guideline” in this regard.
• This is making way for a range of illegal activities which are hard to detect or control.

How have governments handled this?

• Successive Indian governments have had middlemen in the defence business.
• The Bofors scandal of the mid-1980s resulted in a blanket ban on middlemen for defence purchases.
• However, middlemen still perform a service worldwide.
• They enable the governments to evaluate a range of choices and negotiate optimum deals.
• In 2014, the present government allowed middlemen back.
• But it was cautious with their re-entry, by specifying various conditions.
• These included delinking their commissions to the outcome of the negotiations.

How is it in other countries?

• In the US and some western European jurisdictions, lobbying is subject to disclosure statutes.
• They make it mandatory to register, declare their client lists, activities, fees and itemise expenditure.
• These disclosure laws do not eliminate corruption.
• However, they allow for a considerable level of transparency.
• They make it possible for journalists and the general public to access information.
• It provides on which lobbyists had been paid, by whom and for what cause.
• It also allows tracking the outcome in terms of policy-making.
• Evidently, many cases of corruption come to light simply by accessing public records.

What is the way forward?

• India could consider emulating the best practices in other parts of the world.
• This would work better, as against unrealistic restrictions on politicians and bureaucrats under Prevention of Corruption Act.
• A clear lobbying law would introduce transparency at the intersection of business and politics.

Source: Business Standard