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Political Play
CA Dr Sunil Gupta
Legitimize lobbying and regulate it with legislations 04 August, 2014
Lobbying can be defined as an act or process initiated by organized individuals or advocacy groups with the aim of influencing legislators, politicians, bureaucrats or public officials so that the policy decisions made by them are usually for or against a specific cause or in favour of an individual, group or business entity who have hired them.
Individuals or groups who undertake the work of lobbying are called lobbyists and they are typically employed by corporates or interest groups that want specific public policies or policy decisions to favour them or their causes.

However, the term corporate lobbying has come to acquire a negative connotation and in the normal course it is perceived as a euphemism for bribery. This is because in many cases, businessmen and corporate houses employ lobbyists to influence government decisions and public policies in a bid to extract illegitimate gains through corrupt means. However, it is worth noting that every process of getting work done may have its own merits and demerits. To understand exactly how the process works, let us discuss this in more detail.

If a human rights activist tries to influence lawmakers and administrators to get endorsement for a universal convention, or in case a business house hires a consultant to present a proposal to the bureaucrats or financial institutions or to liaison with government authorities, lobbying can be treated as legitimate and acceptable.

On the other hand, if a business house resorts to some unethical or illegal means to induce a law-making body to take a decision or amend an existing rule in its favour with a view to extract undue benefits at the cost of others, then it is clearly an illicit application of this process.

Lobbying with the aim of gaining unconstitutional access to the law-making process should be absolutely forbidden, except in cases wherein services of experts are hired to speed up the process of obtaining licenses and commercial loans. But then, how would you rate the process of obtaining commercial licenses from the concerned authorities by building close rapport and bribing them?

This has been the case in the past wherein large corporate houses extracted many undue favors from government officials. Here the 2G scam immediately comes to our mind.

Lately, lobbying as an exercise aimed at creating social and corporate awareness has been gaining momentum. Activists, who are the voice of those who cannot retaliate against the wrongdoings of the law-making body, approach and influence such officials with a view to bring in social reforms.

Something on these lines happened a couple of years ago when a movement called India Against Corruption (IAC) gained enormous support and the then Union Government was left with no other option than to approve the recommendations put forth by the activists. In light of the above, it is obvious that the pros and cons of lobbying have to be considered and evaluated with due diligence.

In another context, let us take the case of a group of local corporate houses approaching policy-makers to highlight the bottlenecks and threats imposed by global intervention and demanding easy and supportive measures for domestic producers. Until and unless the intention of influencing the legislators is detrimental to the interests of local small scale businesses or the general public, lobbying can be regarded as a welcome measure.

Furthermore, representing a client's proposal in a bid to highlight the latter's core professional competence with a view to obtaining speedy approvals shouldn't be viewed as a dubious or negative practice.

Although it is not yet recognized in a statutory or non-statutory form in India, lobbying by various interest and advocacy groups is widespread across the country. So bringing more clarity to the difference between legitimate and illegitimate lobbying as well as designing a proper framework where lobbying can be legally used as a business tool by corporates desiring to have a bigger say in a participative democratic process is currently a key concern in India.

Presently, lobbying in India is done through Public Relations Firms and some well-connected individuals who share close vibes with ministers, government officials and legislators. Since lobbying can provide our government with useful policy-related information and expertise, India needs to determine a regulatory model that suits its socio-economic and political milieu.

Some countries like the United States, Australia, Canada, Germany, Israel, Hungary, Taiwan, Poland, Slovenia and Lithuania treat lobbying as a legitimate right of their citizens and regulate the activity with suitable legislations.

For instance, the United States passed the US Lobbying Disclosure Act (LDA) in 1995 and further strengthened it in 2009. Under the law, lobbyists are required to register within a prescribed timeframe and also file their financial activity reports regularly.

However, in India we have no such laws, and the cases of lobbying are only governed by Section 7 of the Prevention of Corruption Act, 1988, under which it is illegal for a government official to accept gratification other than the legal remuneration in respect of an official Act.

Even the Supreme Court of India has commented about the adverse influence of some of the powerful corporate houses over the government and policy-making bodies. Though lobbying is supposed to be at a nascent stage in India and the country does not regulate it, the new government at the Centre needs to move towards that direction and draft an appropriate law outlining a concrete action plan and specific measures that can curb all the demerits of lobbying, while simultaneously retaining all its merits.

For instance, the law should make it mandatory for all players and stake holders involved in the lobbying process to sign a Code of Ethics and to submit their financial activity reports regularly.

When the government drafts the proposed law, it should also remember that in the present scenario clearances and approvals cannot be obtained unless bribe is paid to expedite the process. So, the new law to regulate lobbying should make it mandatory for bureaucrats, ministries and public financial institutions (PFIs) to respond to applications received by them within a stipulated time period.

It should also strive to pave the way for the much-needed transparency and accountability in the policy-making process so as to totally eliminate the scope of influencing government policies with money, bribes or through other illegitimate means.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
About The Author
A Chartered Accountant by profession and Director on the board of Punjab National Bank (PNB), General Insurance Corporation of India (GIC) and Rural Electrification Corporation Limited (REC). Dr. Sunil Gupta is working flawlessly for the economic and social prosperity of India. His Linkedin and twitter handles are @cadrsunilgupta. Facebook page is CADrSunil.
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