Why Does India Not Regulate Lobbying Under Its Legislation?

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The Disclosure of Lobbying Activities Bill of 2013 was introduced as a Private Member bill by Mr. Kalikesh Narayan Singh Deo, Member of Parliament, Lok Sabha, representing Biju Janta Dal (BJD). The bill provides regulation that will set norms for the functioning of lobbyists and provide for public availability of information regarding their activities. The thought behind the bill is to enhance awareness among public about lobby activities, lobby organisations and the interests of various stakeholders, increase transparency and accountability through public disclosures of lobbying activities and bring in a change in public’s confidence in the government.

The bill was introduced in 2013 in the Lok Sabha, however, the same lapsed and was re-introduced in 2015. Till date, no major discussion in the Parliament or serious deliberation has taken place. Under the theories of public policy, one can say that regulation of lobbying has never reached the government’s agenda, where ‘agenda’ is defined as “a list of subjects or problems to which people in and around government are paying serious attention at any given point in time.”

Before moving forward, it is important to understand the weight that a bill like Disclosure of Lobbying Activities (DLA) holds. Globally, regulation of lobbying has been a slow process. From a period of 1940 to early 2000’s, only five countries regulated the practice of lobbying: United States, Australia, Canada, Germany and Georgia. But, since 2005, with countries like France, Denmark, Japan and Britain joining the group, more than 10 countries have adopted regulation of lobbying. Today, the USA, Australia, Canada, France, Germany, Hungary, Israel, Mexico, Georgia, Lithuania, Poland, Slovenia, Montenegro, Austria, the Netherlands, and Ireland are the countries which have a structured legal approach to lobbying.

Lobbying, unfortunately, has carried a negative connotation with itself over the years. The word lobbying originates from the 19th Century when ‘petitioners would hang around to have a conversation with the members of legislation in the lobby of New York state capitol in Albany’. Over the years, lobbying has come to become an activity which is a part of the policy-making process, a practice which gives a voice to the citizens of a country who are not directly involved in the decision-making process. A lot of times, lobbying also helps in specifically providing an opportunity for the interests of the minorities to be heard by the government. As a report from OECD states, ‘private interests seeking to influence government decisions, legislation or the award of contracts is part of the policy-making process in modern democracies. Yet, lobbying can also lead to unfair advantages for vocal vested interests if the process is opaque and standards are lax’. Hence, it can be observed that it is due to the opaqueness and lack of regulation due to which lobbying tends to be seen as an activity which showcases unequal access to the government. Usually, the context behind this perception of lobbying is the act of involvement of ‘money and privileges offered by lobbyists’. Such activities of lobbyists and lawmakers in a country leads to a tarnished image of lobbying. In order to bring in a middle ground in an environment where there is some sort of a co-dependency between public officials and lobby groups and the potential perceived corruption which evolves from unregulated lobby practices, regulation of lobbying has come out to be a solution.

Regulation of lobbying not only enhances transparency and accountability in the policy-making process, but also adds to the international framework of anti-corruption campaign. Hence, disclosures of the lobbyist and the lobby organisation, the clients whose interests are being presented, the interests which are discussed with public officials and also, disclosures of the contributions by the clients involved and reporting of use of public funds are a few guidelines which can help.

However, India, being an Asian Giant, an emerging superpower which has been consistently enhancing its performance on global indices, has never taken a stance or even mention lobbying under a legislative deliberation. What can be the reasons behind failure of lobbying being recognized as an important issue to be discussed and worked upon in India, and bringing its regulation on the government’s agenda?

Theories of public policy help us in understanding such factors which are leading to the failure of bringing regulation of lobbying under the government’s agenda. Extracting from models like Kingdon’s multiple stream, Blumer and Kitsuse’s stages model and Down’s attention cycle model, keeping unregulated lobbying as the issue, one important factor can be the lack of public awareness to the gravity of the subject and the impact of unregulated lobbying in day to day government business. This is an important aspect as it not only points towards lack of formation of any groups of individuals who would want to protest against unregulated lobbying, but, also leaves a foggy perception of lobbying as a corrupt activity, without having a complete understanding of the deeper functioning of public advocacies, lobby organisations, business associations and interest groups.

In India, like in other countries, business groups have been the most important and the most involved interest groups in the political system. In the colonial era, the British established chambers of commerce in the country to safeguard the interests of the businesses during the early nineteenth century. Indian businesses started building groups only during the second half of the nineteenth century. It was the institution of such business groups since 1920’s that still continues in India in the form of “multi-company entities”. These business associations can be seen as the harbingers of political lobbying in India which work as umbrella organisations, being the voice of Indian industry and businesses. The members of such business associations have been Indian private and public corporate sectors and multinational companies, articulating their concerns and interests. Such groups were known for their national and regional dominance, their employment of lobbyists and most importantly, their funding of political campaigns.

On the other hand, there was growing inhibition towards such elite business groups, not just due to fears due to their increasing influencing power, but also due to their lack of ideological legitimacy and dependent position in the Indian economy. The lack of legitimacy can also be attributed to the traditional view of the society of ‘private gains and motives as antisocial’. Most of the Indian communists, socialists always saw industrialists as exploiters who have motives and actions which can always be suspected. This added to the public belief in taking business groups as illegitimate. Hence, the problem multiplied due to the increasing dependency of government on the information provided by these houses with regards to the on-ground view of social and economic issues and the demands of stakeholders like private businesses as well as corporates and on the other hand, their social and ideological illegitimacy.

A socialist mixed economy which, eventually, emerged in India wished to curb the growing importance of such business groups. The idea was to control the growing monopoly and the concentrated economic power of such groups.

The regulatory laws of 1960s in India were basically put in place for the government to have higher control over business groups by limiting their role in Indian policy-making. The same was envisioned to be achieved by banning company contributions to political parties and bringing in prohibitive laws with regards to taxes and licenses. These laws are vastly different from the laws of regulation of lobbying being discussed under the proposed DLA bill. The regulation of lobbying under DLA recognises lobbying as a regular practice and, while legitimising it, also regulates it through transparent disclosures and registrations.

Hence, the regulatory laws of 1960s put into action then, were structurally so restrictive and binding that they, in turn, seemed to be outplayed by large scale corruption and slow rates of growth. To provide an example, when Indira Gandhi, the then Prime minister if India, realised that business houses showed more support to their competing political parties, she developed a syndicate in order to curb the growing importance of business houses, in 1969. Companies could not fund political parties and had supervision on their activities. However, by this time politicians had gotten used to receiving funds from businesses and the same was being taken care of by the umbrella organisations of common business interests. This marked the beginning of ‘number two money’ and ‘black money’ coming to the accounts of political parties. It is during this period when discreet practices of lobbying got attached to the practices of unlawful funding of political parties by the already ideologically illegitimate business groups in India.

Over the years, there have been major changes in the socio-political landscape of such business associations. From being underground and carrying out discrete lobbying practices, business associations came to the forefront as becoming more collective, open and pluralistic. This change was also accompanied with the changes in the laws as well. With the policies focusing on private sector development, government has become more of a facilitator than a regulator, by being more welcome and open to the information being provided by business groups. In terms of political funding, currently, standard monetary contributions by non-governmental companies which are more than three years old are acceptable. What is most interesting is that business groups, nowadays, term themselves as non-governmental and not for profit, as they are mostly umbrella organisations. Hence, this provides a channel for corporates, which are members of such business groups, to fund political parties indirectly. Thus, a socialist mixed economy with prohibitive and unrealistic laws in place for age-old family owned business federations has historically lead to the core puzzle which is being discussed.

Another important factor to be considered for the failure of a bill like DLA reaching the government’s agenda is the grey area between how one perceives lobbying and advocacy. Although the private member bill takes it under its objective to narrow down the confusion with regards to perception of lobbying and advocacy, however, the very basic structure of the bill presents a pool of confusing ideologies. The bill defines lobbying activity as an act of communication with and payment to a public servant with the aim of influencing—”introduction, passing or defeat of a Bill or any amendment thereto in either House of Parliament or legislature of a State; (ii) formulation, modification, implementation or termination of any Government policy or programme; (iii) awarding of a grant, loan, license, contract, permit or allocation of funds to an individual or an organisation; (iv) decision of a public servant to transfer an asset, business or institution that currently produces goods and services for the public, to a private person or to a privately-owned organisation; and (v) nomination or promotion of any person for a position in public office.”

Under the bill, ‘payment’ has been defined as the contributions made in cash or kind and includes cost of meals, retreat, vacation, meeting, conference, travel or support for election campaign and offering gifts in the course of lobbying activity; (i) “public servant” shall have the same meaning as assigned to it in the Prevention of Corruption Act, 1988; (j) “prescribed” means prescribed by rules made under this Act; (k) “Register of Lobbyists” means register maintained by the Lobbyists Registration Authority of all registered lobbyists in the country; and (l) “registrant” means a lobbyist who is registered with the Lobbyists Registration Authority.

This basically means that according to the bill, such payment included lobbying activities should be seen as part of the policy-making process and should also be regulated.  However, sections 7, 8, 9 and 10 of the Prevention of Corruption Act, 2015, observe public gratification as an illegal activity. Section 7 under the Prevention of Corruption Act, 1988, states that “public servant taking gratification other than legal remuneration in respect of an official act.—Whoever, being, or expecting to be a public servant, accepts or obtains or agrees to accept or attempts to obtain from any person, for himself or for any other person, any gratification whatever, other than legal remuneration, as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official functions, favour or dis-favour to any person or for rendering or attempting to render any service or disservice to any person, with the Central Government or any State Government or Parliament or the Legislature of any State or with any local authority, corporation or Government company referred to in clause (c) of section 2, or with any public servant, whether named or otherwise, shall be punishable with imprisonment which shall be not less than six months but which may extend to five years and shall also be liable to fine”.

Hence, there is a requirement for the DLA bill or the execution authority of the DLA bill to explain this grey area and the difference between illegal public gratification, corruption and allowed lobbying and advocacy.

Overall, it is the combination of factors like lack of awareness among masses with regards to the issue of unregulated lobbying, the perception which is attached to lobbying which has developed due to the history related to business lobbying in India, the presence of laws like the prevention of corruption act which illegalizes public gratification, the lack of public mobilisation with regards to the disadvantages of unregulated lobbying and the power that businesses and associations which work closely with the government hold, which leads to difficulty in bringing the matter of unregulated lobbying in the government’s agenda. Another aspect can be that in a country where lobbying has been, whenever observed, seen as an illegal activity, regulating the same may seem like legalizing corrupt activity to the masses. This may also start affecting the voting patterns of the people as now they would be more aware of the stakeholders involved in the policy-making under different sectors of the economy.

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