Not long ago during the time Nira Radia tapes were headlining the media, I had a candid conversation with an industrialist about the case and how it questioned the role of senior journalists. I asked him why corporations depended on journalists allegedly to lobby on issues when India Inc had the right to do it on their own with the government. My intention then (when I was still in journalism) was to find out if lobbying as an act was a preferred route for companies. His answer was guarded but he did admit that while lobbying is per se not banned (logic being something which is not banned is considered legal) it can never happen in an open and transparent manner in India since companies can never come together on any issue. Lobbying after all needs a collective voice. The latest case around corporations, CBI and the perceived mess took me back to this exchange and the kind of factors that influence policy or the lack of it.
For one, industry lobby groups in India have failed to overcome individual interests and sub-lobbies within it to represent larger causes important to the country’s economic progress. The recent letter by ASSOCHAM in national dailies is only a dramatic attempt to get noticed, it may not achieve much. The result of a lack of collective representation and inability to stand up on issues means today India Inc has little control over policy formation in the country. Either they fail to get market friendly policies or they are unable to build a requisite consensus amongst political parties for them to rise above partisan politics when the ruling government in introduces a policy. The FDI in retail is a good example of a botched up and short sighted move by all concerned. Shekhar Gupta’s recent editorial in Indian Express hits the nail on head when he says they failed to change with the times as economic reforms unfolded. Who can forget timing and flexibility in one’s own behavior plays a big part both in bringing about reform and in seeking it.
So then one needs to ask the following. Can corporations really come together on matters of Industry Need? What stops them from speaking in one voice over industry issues like permissions to access natural resources, taxes or other permissions? Has the failure to think together and act with a common purpose been corporate India’s biggest failing? Have existing industry bodies been too politically correct and failed to push for a stronger, transparent platform for dialogue with policy makers?
The FIR against Kumar Mangalam Birla and the outpour of support is at best an instance of the tenth batsman trying to chase a target of 100 runs. It is possible one may get out of the sticky situation but it’s a valiant but feeble and apologetic attempt by corporate India to save its reputation and salvage the situation. Mainly because it comes too late.
There is no need for India Inc to be so apologetic that they must meet and push for their case with the Government. Isn’t that the solution where transparent lobbying doesn’t exist? The Birla case suggests there is finally now an open admission that companies do reach out to get permissions and push for approvals. But to tar industry calling this ‘hand in glove’ is completely misguided. How else do you expect a dialogue to take place between those in power and those who are affected by their policy? In a representative democracy trying to explain your position should be a legitimate way of influencing decisions as long as there is no illegal exchange of favours or ulterior motives. In this case, would the Prime Minister have ever admitted that he decided to change the decision on coal block allotment until the former Secretary Mr Parakh dragged his name in? Unlikely but the awkward course of events has forced every related party to take a stand. And we should thank the case for that.
Corporations too should introspect a bit about why they speak out selectively. Why not take a stand at start and defend your position especially when there is no clear cut policy on allocation of natural resources in general? Without a more transparent auction policy there is no way out but to seek coal within the existing policy paradigm. With the government and politicians failing to resolve the policy confusion and bureaucrats merely implementing the policy of the day combined with a selective combative industry we have a chaos where vested interests (read lobbies with ulterior motives) have hijacked the situation to suit their interests. So you now hear that Mr Parakh talked of a mafia and undue influence of ministers, no surprise there!
Also, there is now confusion whether India supports market based economic activity or state controlled actions or is it somewhere in the middle? Policy makers are yet to make up their mind and hence the classical debate on whether government intervention is more important or growing the economic pie and letting the benefits flow continues. Corporations have no choice but to modify their actions accordingly leading to uncertainty. Just imagine a coal block allotted 8 years ago is yet to start production. Critics say companies made profits by selling the coal blocks but what about those who set up power plants hoping the coal will help to produce power but they are yet to get any coal? Is it not unfair to paint every company with the same brush? How do you expect more power generation which light up homes without coal at a time when India has one of the largest reserves of coal blocks. We need coal; we need to mine it the right way with practical rules, regulations and a transparent as well as rational process of permissions.
It will happen if at the end of the day corporate India stands up a little more frequently and a lot more openly. Hiding behind the excuse of ‘let me get my work done first’ is clearly not sustainable; the top names in India Inc have already paid a price. If we want to ensure India’s top GDP contributors continue to do the good work they themselves have to come together to lobby more, lobby right and lobby openly without the fear of being questioned. If their cause is just they should be able to show to the stakeholders that what they say and do is for the good of the markets and society together.
The author is a former journalist & now works for Essar. The views in this column are personal.
Shivnath Thukral (@shivithukral) is a former journalist and now works with Essar. He is an Eisenhower Fellow and curious about the changing relationship between civil society groups, businesses and government. A Newsjunkie, foodie & cooking enthusiast he is also fascinated with new technologies that will change the way we consume! Views expressed are personal.