Dec 7, 2011

Corporate lobbying gaining strength in India

Some days back, Dainik Bhaskar published one of my tweets. I wrote: “Wal-Mart has spent Rs 52-crore between 2007 and 2009 on lobbying. Will Wal-Mart tell us how much it spent on the Prime Minister’s office?” A few days later, I noticed the BJP leader Shanta Kumar asking the same question.

Crores of rupees have been spent over the past few years by some of the big multinational corporations to seek an entry into India. What may appear to be economic decisions taken by the government often turn out to be the result of intense lobbying by foreign companies. Besides Wal-Mart Stores, the coffee shop giant Starbucks, which runs a global chain of coffee shops, has been lobbying in India seeking 100 per cent FDI in single brand retail. As per a disclosure statement it made before the American Senate, the company had spent more than Rs 1-crore in the first 6 months of 2011, for “market opening initiatives in India.”

Starbucks efforts have borne fruits. Finally, the govt has approved 100% FDI in single-brand retail.

Wal-Mart Stores, the world’s biggest multi-brand retail chain, had told the US Senate that it had lobbied for “discussions related to India’s Foreign Direct Investment (FDI).” In addition to Rs 52-crore spent between 2007-1009, the company had also incurred Rs 6-crore in the first 3 months of 2010 for the same purpose. In other words, crores of rupees are being spent by foreign companies to influence public policy and the decision making process. Not many of us know that the debate we see on the television or the articles we see in support of the foreign companies are often supported with lobbying money.

At a time when the American and European economies are faced with a recession, at least a dozen Corporate giants are lobbying hard to seek an entry into India. These include Wal-Mart, Starbucks, and financial services major Morgan Stanley, New York Life Insurance and Prudential Financial. The financial services companies have already gained with the approval granted to 100 % FDI in single-brand retail. In addition, technology companies Intel, chemical giant Dow Chemical, pharmaceutical major Pfizer, telecom companies AT&T, Alcatel-Lucent are also engaged in intense lobbying.

Lobbying is a legal activity in America. The companies are therefore required to inform the US Senate about such activities by submitting quarterly disclosure reports. In India, where lobbying is so far not legally recognised, but the industry and business houses have formed association and federations which primarily are engaged in lobbying with the government. Federation of Indian Chambers of Commerce & Industry (FICCI), Confederation of Indian Industry (CII) and the Punjab, Haryana, Delhi Chamber of Commerc are basically lobbying groups. You would have noticed that the CII and FICCI have also been actively supporting the entry of Big box retail into India.

Internationally, lobbying is a major activity. According to Wikipedia, currently around 15,000 Brussels-based lobbyists (consultants, lawyers, associations, corporations, NGOs etc.) seek to influence the European Union’s legislative process. Some 2,600 special interest groups have a permanent office in Brussels. In America, lobbyists target the US Senate, US House of Representative and the State legislatures. There were some 17,000 lobbyists registered in Washington DC alone in 2007. This clearly tells us how corporate lobbying is writing the economic policies of the American and European governments. The economic decisions are in reality not based on what the people require, but how much the business houses can invest in influencing policy decisions.

It is therefore important for us to also know how much money has been spent by companies on influencing the Prime Minister’s office and also on parliamentarians. After all, it is our future that is at stake. #   

Read also: The world of lobbyists, Deccan Herald.                                                                          


Anonymous said...

Thanks davendra for the figures on lobbyists

on email

A_N_Nanda said...

A nice article, brings the issue up clearly. Lobbying--if it is not legal, it's to be illegal, but nobody says so. We allow ourselves the luxury of ambivalence. But how long?

A. N. Nanda

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