Lift the cover

Less than a week after it seemed that the dust kicked up by the furious debate on allowing FDI in India’s retail sector had settled with Parliament voting in favour of it, a row has erupted over questionable practices that retail giant Walmart might have resorted to in order to gain access to Indian markets.

The row was triggered by Walmart disclosing that it spent $25 million over the last four years to lobby US legislators for market access in various countries, including India. US law allows lobbying, so Walmart did nothing illegal there in spending money to win support for its position. However, the question is whether Indians were beneficiaries of Walmart’s lobbying. Did it pay politicians, for instance, to vote in its favour? If it did it acted in violation of Indian law as lobbying is illegal in India.

Many argue that lobbying isn’t wrong. After all, how else could one convince a policy maker of his position? What evokes unease with lobbying is that palms are often greased in the process of winning over a policy maker. Indeed, it would not be an exaggeration to describe lobbying as legalised bribing, with the law giving the process a veneer of respectability.  Undoubtedly, the line dividing lobbying from wheeling and dealing, and bribing is rather thin.

And yet India must revise how it views lobbying. Whether we like it or not corporate houses and individuals in the private sector lobby officials to push through favourable policy. By regulating lobbying, we are bringing this practice out into the open. Lobbyists and those on whose behalf they are working will be required to disclose how much they are spending on lobbying and who they lobbied.

There is growing concern over the role that money power is playing in the decision making process in the country. Denying that it is happening will not make the problem go away. Instead regulating it will inject transparency and accountability into this process. We need to know who is paying money to whom to influence decisions if we are to be in a better position to tackle it.

The ruckus over Walmart’s lobbying shows how poorly informed and ill-prepared we are to deal with the matter. The government has rightly called for a probe into whether there were Indian beneficiaries of the money Walmart spent.  However, it must not stop there. It should enforce transparency on lobbying by making it legal but regulating it.

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