Behind the FDI Policy

Lobbying is a perfectly legitimate activity in the US, but it is held as bribery in India and hence as a crime. The report that Wal-Mart spent Rs 125 crore since 2008 on lobbying to get access to Indian markets needs to be examined in detail.

The allegation made by the opposition is that bribes were paid to people that matter in New Delhi and that the policy was tailored accordingly. Wal-Mart has been in focus for taking action against its chief executive in India on the allegations of malpractices and corruption. We do not yet have a full and detailed account of the Wal-Mart chief executive’s questionable activities. It is necessary that the UPA government order a probe, such as through a joint parliamentary committee which has members from all parties.
Lobbying is licensed in the US. A corporate body or an individual has the right to present their case before the government to demand a particular concession or tax break. It is much more than what we in India know as “taking all stakeholders into confidence”. Prior to the presentation of the Union budget, the finance ministry undertakes an exercise which involves consultation of all stakeholders. All sectors lobby for tax breaks or policy changes and all this becomes inputs for the union finance minister. At the international level, political leaders lobby for companies back home in order to keep local economies going and save jobs. Remember how President Obama touted contracts worth $20 billion signed with India that would save 50,000 jobs in the US during his visit here? Hence, lobbying is not a crime unless money exchanges hands, but it often does.
There was this famous statement made by former vice-president of Enron, Ms Rebeca Marks that the company had spent $20 million educating Indians. Then it was the BJP-Sena combine which was taken in by the charms of Enron and gave the company the most favourable terms. Then came the Radia tapes which exposed the hectic lobbying for the 2G spectrum. So, there is reason to believe that Wal-Mart may have indulged in some questionable ways for its ‘education’.
In any democracy, the assumption is that the will of the people must prevail. However, there comes a time when big corporations begin to call the shots. Corporations, like Wal-Mart are driven by profits alone. That is the nature of capitalism – pure and ruthless pursuit of self interest. The job of government is to ensure that the interest of citizens is not sacrificed to corporations. The UPA has won the vote for opening the market to FDI in multi-brand retail, but that does not mean that global retail chains can be allowed to get away with unethical practices. The questions that must be answered satisfactorily are: did Wal-Mart pay politicians and officers to frame the policy so as to suit its growth interests? And did the politicians and officers push the policy with great speed in order to satisfy Wal-Mart?
The government needs to order a probe, judicial or by a joint parliamentary committee. The probe should be completed in the shortest possible time, as looking at the insufficient-for-majority numbers the UPA has in both the Houses of Parliament, we are not sure when a  mid-term poll could be ordered. The voters must know whether the UPA ministers and civil servants were acting with convictions of their own or they were influenced by lobbyists.