The Lobbying Battlegrounds
- Retail Pressure-building to further open up FDI in multi-brand retail and more commodities including foodgrain
- Defence Domestic industry keen to acquire state-of-the-art technology is urging raising of FDI bar to 49 per cent
- Mining Lobbying to stall a new tax proposal even as environmental safeguards and rights of forest-dwellers ignored
- Aviation National carrier struggles to survive as lobbyists ensure better health for private carriers and airport operators
- Telecom The lobbyists’ den, there is influence in every sphere—from licences to spectrum allocation
- Infrastructure Be it power generation or highway construction, policies being tweaked indiscriminately to suit corporates
The dinner party is, as always, the perfect setting for the pitch. The big industrialist quietly turns to a man-about-town: would he care to put in a word with the minister about changing the policy for FDI in multi-brand retail? What’s in it for us, asks the man-about-town, meaning the local industry. Pat comes the reply: there’s Rs 20 crore for you if the policy is changed. Later, when the man-about-town checks with the minister, he’s told that the policy change should happen anyway in a couple of months. “It’s going to happen anyway,” the man-about-town repeats to the industrialist. And then, gallantly, “Does money have to change hands too?”
That’s a naive question to ask in the new India, many would say. A well-oiled network of big corporate lobbyists is using money, influence and skulduggery to command public policy and attack rivals. Armed with PowerPoint presentations, inside information, sweetheart deals and a dirty tricks department, these lobbyists seem to be running the show in Delhi and Mumbai. Business is meshing with politics in the worst possible way. “It’s a complicated system, almost like a parallel government with its own rules, structures. People are fixed, punished, rewarded,” admits a lobbyist. “But that’s how it is.”
Sure, business lobbying has always been around—Reliance’s V. ‘Balu’ Balasubramanian’s influence in the corridors of power has almost given him a godfather-like status in the lobbyist hierarchy. While he’s just about surfacing after a long exile, there are numerous other instances of lobbyists driving corporate battles in the past. But traditionally, lobbyists in India were shadow warriors, heard of from time to time but never really seen. That has changed. Lobbyists have become public figures, freely mixing with the powers-that-be.
The art of lobbying too has changed—getting things done at any cost has become the way of life. That’s altered the modus operandi of the lobbyists—with designations like “external affairs” and “environment management”, lobbyists increasingly operate directly via PR outfits, discreetly servicing their client’s lobbying needs. Many companies even maintain dedicated teams for lobbying their cause with the authorities. “Corporate influence is becoming stealthier. A more powerful way of lobbying is emerging,” says Sunita Narain of CSE.
The spotlight on this otherwise hidden world comes thanks to a media report which published the tapped cellphone conversations of Niira Radia, a powerful lobbyist who manages both the Tata Group and Reliance Industries, among other clients. The transcripts reveal the lobbyist-politician nexus, and also provide a peek into the extent to which such lobbying can go and the levels at which it works. While it is not completely clear who acted as the whistle-blower, Radia has obviously made enemies among some of India’s top industrialists.
Subsequent transcripts, which surfaced in a section of the media, reveal that Radia was instrumental in ensuring a cabinet berth for the DMK’s A. Raja when the ministerial portfolios for UPA’s second term were being decided. She lobbied with the Congress leadership to get him the telecom portfolio—against the other contender, the DMK’s Dayanidhi Maran. Despite repeated attempts by Outlook, Radia was unavailable for comment.
But there was another game at play. Tata Group head Ratan Tata had allegedly put his weight behind Raja and wanted Maran out of the scene at any cost. In fact, he had in a handwritten letter to Tamil Nadu CM M. Karunanidhi in December 2007 reportedly praised Raja’s “rational, fair and action-oriented” leadership. To put the corporate battle in perspective, Airtel’s Sunil Mittal was unhappy with Raja in the seat. Also, by getting the PR mandate of Mukesh Ambani’s business empire in 2008, Radia would have found herself on the hitlist of Anil Ambani, who incidentally is also Tata’s competitor in telecom.
What’s worse is that the transcripts show Radia’s alleged involvement in the much-debated 2G spectrum and licence scam where she is said to have helped some of the new telecom companies obtain their licences. The government, at that time, had maintained a stoic silence for retaining a price of Rs 1,650 crore for a pan-India licence—a price set way back in 2001, when, even by the admission of the regulator, it should have been in the range of Rs 10,000 crore. Within weeks of getting their licences, two new licencees sold out at a much higher value—the size of the scam is estimated at Rs 50,000 crore.
It remains to be seen how Radia prepares her defence to the charges. But one thing is clear: this episode establishes the big hand of lobbyists in business, and the role they play in pushing corporate interests come what may. This unfortunately is evident in various other sectors—from retail, defence and mining to agriculture, power and telecom—where armies of lobbyists are hard at work, trying to influence decisions. “However transparent the rules, there’s always an element of subjectivity,” says a senior lobbyist. That particularly happens with the level of chief ministers of states.
Maharashtra’s decision to allot foodgrain for liquor manufacturers in 2007 is a blatant example of how political and business lobbies worked hand in hand. The prime mover was Amit Deshmukh, younger son and political heir of Vilasrao Deshmukh who imagined this as the next logical step after owning and operating sugar cooperatives. Amit networked with children of politicians across the political spectrum. BJP’s Gopinath Munde’s daughter Pankaja was a key ally, so was NCP’s Govindrao Adik’s son Avinash and Vimal Mundada’s son Akshay.
The policy may have been still in the making had it not been for another group’s involvement. A handful of men, all powerful in the state’s distilleries business, saw foodgrain-based liquor as the best way out of a likely molasses shortage. “At one point, it was difficult to tell who was talking whose language—political sons were talking like industrialists and vice versa,” recalls a senior bureaucrat who sat in on the presentations. While there is an agitation against the policy, production worth an approximate 110 crore litres per year of alcohol—the equivalent of 14 lakh tonnes of foodgrain—has been sanctioned.
In another, more positive example, 29-odd MPs made a pitch in December 2007 for biscuits (instead of hot-cooked meals) to be served as lunch to schoolchildren as part of the mid-day meal scheme. Using the MPs as an instrument was nothing but a pitch by the biscuit manufacturers’ association to influence the course of the Rs 5,000-crore scheme launched to tackle malnutrition and absenteeism among schoolgoing children. Despite using all kinds of pulls and pressures—including the good offices of the daughter of a once formidable minister in the UPA’s first edition—the hot-cooked meals stay. For now.
Such instances unfortunately seem to be the exception as the lobbying interests gain in power and patronage. While counter-lobbying by civil society is building up to an extent, there’s a lot to be afraid about the powerful moneybags that seem to be running the emerging market that is India.
They know the pulse of the government—and know just where to apply pressure. Apex industry chambers FICCI and CII are the big fish and the most powerful. There are also smaller, but effective bodies—like ASSOCHAM, NASSCOM for infotech, FIEO for exporters, SIAM for car
makers—that lobby furiously for duty cuts or policy changes. Then there are icons like CII’s Tarun Das and FICCI’s Amit Mitra who have established a sophisticated and organised approach to lobbying that draws on top CEOs, government and politicians.
Lobbying may not be part of their official brief, but legal firms are the crucial cog in helping companies deal with regulatory boards and government-appointed commissions. Firms like Dua Consulting, for instance, which are offshoots of their legal practice, do lots of regulatory work, particularly in the telecom sector. The ability to walk the talk in the corridors of Delhi is a preferred USP for top corporate lawyers like Zia Mody, Ryan Karanjawala and Shardul Shroff. In fact, many foreign consultancy firms also hire lawyers by the dozens to help clients lobby. Nothing attracts power more than the felicity of words.
There is no way you can discount the role and sheer access of top international lobbyists. Be it Frank Wizner of Patton Boggs, a firm that lobbies for India in the US, who supported India’s “sovereign right” to nuclear enrichment and reprocessing technology. Or Richard Celeste, also formerly a leading diplomat, who encourages trade between India and the US. Or, for that matter, William Cohen, a former US secretary of defence and now a businessman and frequent speaker. Ron Somers of the US India Business Council and numerous trade missions controlled by embassies in Delhi add to the growing numbers that have put India on the global lobbying map.
Niira Radia, Vaishnavi, Neucom, Noesis
Though she lobbies for a few percentage points of India’s GDP, it took 15 years for the mystique around Niira Radia to unravel. For someone whose strengths are described as “commitment levels”, an excellent network of contacts and “knowing which button to press”, that’s no mean achievement. Till the phone-tapping controversy, Radia had always been behind the scenes—barring the lavish annual bash at her farmhouse in Delhi, where cherry-picked invitees from bureaucracy and media are present. Generous to a fault, this British passport-holder assiduously built relationships with top print and TV editors and political parties, particularly the Congress and the DMK. Earlier, she was known to be extremely close to the BJP’s Ananth Kumar and built up an interest in aviation. It wasn’t enough, however, for her low-cost airline Magic Air to take off in 2005.
If some old-timers say Radia is “pushy, on the make”, it mirrors some amount of envy about her absolute hold on Ratan Tata, who “won’t hear one wrong word” about her. The stakes became bigger when she brokered Mukesh Ambani’s open support for Tata in the Singur controversy. Apart from Reliance, she also has clients from the Vedanta group and some of the new telecom licensees. “She’s gone through a lot in the past 15 years, she’s got grit,” says a colleague, who insists she “will survive a valuations game”. Whether this heady mix of politics and business has made her “an obvious target” or not, Radia can’t operate from the shadows any longer.
Deepak Talwar, DTA Associates & Integral PR
By all accounts, he has the right pedigree. This son of a former bureaucrat has top bureaucrats, and the who’s who of Delhi, attending his parties. Operating out of “White House” in Delhi, Deepak Talwar is the “king of the tribe”, the lobbyist who has been in business since 1979—and has an almost magical knack of tabling deals wherever they are, “broking for everything”. He came into his own in the early 1990s, using his proximity to top bureaucrat A.N. Varma to facilitate FDI approvals in the early flush of liberalisation. Using a tremendous network of connections, he has opened doors everywhere—famously for Coca-Cola while dumping Britannia’s Rajan Pillai in the early 1990s—and attracted a rash of MNC clients.
In recent times, Talwar’s proximity to Praful Patel has seen him become a big player in the duty-free space, with the lucrative Delhi Duty Free. He has also got his fingers in various other pies, from defence (with Davinder Dogra’s Hexxcom) to a stake in mobile-number portability JV with Telcordia, which has been facing regulatory issues. “Everyone is trying to bend the rules,” Talwar told NYT in a story on Mukesh Ambani. That’s a telling statement from this consummate dealmaker.
Dilip Cherian, Perfect Relations
“I am like a lawyer who pushes the mandate given to him.” That is a characteristic response from Dilip Cherian, the ‘Page 3’ celeb who networks with political heavyweights, policymakers, the media, industry associations and embassies for clients like Coca-Cola, POSCO and Diageo, among others. Cherian is seen as an influencer, one who opens the right doors for his clients. “We don’t play the money game. It is not our speciality. That is a high-stakes game,” says Cherian, as careful in his choice of words as in his studied casual appearance of white pyjama kurta with ruby-studded buttons.
Instead, he takes pains to stress that his public relations firm treats lobbying as an extension of communication, with the government at one end and with shareholders at the other. Clearly, Cherian’s initial stint of working as consultant to the government, followed by over a decade’s association with CEOs as business editor of the then all-powerful Business India, have helped him work through “the pulls and pressures of policymaking”. He stresses that today 20 per cent of lobbyists are in the “legitimate space”—the task becomes more difficult when individual interests prevail over policymakers.
Amar Singh, Politician
He’s The Man Who Made Things Happen. Propped up by an array of friends in the billionaire club—K.K. Birla, Shyam Bhartia (who pulled him into entrepreneurship) and Anil Ambani—he has swung industrial projects this way and that, tackled Bollywood film nights and handed out quick windfalls from investment gambles. With equal elan, he has then geared up to ask “pertinent questions” in Parliament. But life in Delhi can be tough, even for someone who has clawed his way to the top from anonymity in Uttar Pradesh. At present, Amar Singh is without party, privilege, and not as many friends.
His erstwhile entourage included Anil Ambani, Subroto Roy and, of course, Amitabh Bachchan. Those were the days, when cricket and Sahara, aviation and politics, UP and power projects converged within his portly frame. “Power is patronage and access,” he once famously said. The maverick is yet to make a comeback, but it’s likely to be through the forthcoming Malayalam film, Mumbai Mittai, where he’s acting alongside Dimple Kapadia. Going by the publicity shots he has put on Thakuramarsingh.com, his goggled gaze seems firmly riveted on his co-star.
Suhel Seth, Counselage
Brandman Suhel Seth is a smooth schmoozer, adept at TV appearances, where he pushes his clients without seeming to do so. He’s the guy who can claim to dine with the Big Boys of industry and comes with a USP—the gift of the gab. In the around 25 minutes he was on the phone from London, Seth railed against rival business groups that were recently at loggerheads with the Tatas (his company Counselage handles Tata Group firms). It bears repeating what Seth says about his tribe: “Sab behti ganga mein haath dho rahe hain....” He, however, distances himself from the chatter around Niira Radia—“It doesn’t mean scat to me, her or any other lobbyist”—but alas, not all see it that way. In London, where he’s at present, they’re hearing of the controversy and asking Seth if bribes will be necessary to launch a theatre in India on the lines of RADA. He’s telling them, “No, they won’t be,” but knows otherwise. Such is the tightrope lobbyists must walk everyday. And he has done that for Vodafone, Coca-Cola, Max and many, many others. At his best, Seth has learned that the entire system needs to be overhauled. At his worst, he knows it’ll never happen.
Tony Jesudasan, Reliance ADAG
With that larger-than-life smile and slouchy gait, Tony Jesudasan has quietly walked into the offices of most senior editors for close to two decades now. As Anil’s “man in Delhi”, he knows everyone, from cabinet ministers to bureaucrats to editors. He has worked well on those relationships—over cigars, long discussions on music, lunches at eateries in Khan Market, evening walks at Lodhi Garden, big-money card playing—nurturing them in a low-key manner. In a town that never forgets or forgives, Jesudasan—who joined Dhirubhai’s Reliance from the USIS in the early 1990s—is a powerful influencer of opinion, the quintessential “propagandist”. While Jesudasan is involved in affairs related to power and gas for ADAG, the K-G Basin gas case in particular, he insists that telecom isn’t a beat any longer. For a man who is most likely to say that he is just an employee and longs to go for a long holiday, Jesudasan remains informed on almost everything, be it files or rivals’ plans.
Rajeev Chandrashekhar, MP
From entrepreneur to independent parliamentarian, Rajeev Chandrashekhar knows how to play the game from all sides. Though he no longer has unbridled access to the corridors of power—his now estranged industrialist father-in-law is related to former NSA M.K. Narayanan—Rajeev is in the unique position of being an industrialist, venture capitalist, opinion- and policymaker and lobbyist all rolled into one. “The issue’s not lobbying, it’s the stakes that are so high that you’re forced into it,” he says. Given his telecom background, the cellular industry chose Chandrashekhar in the early 2000s to argue their case with the government. He succeeded, forcing a policy change and effecting a migration to a profit-sharing regime, the benefits of which the industry is still reaping. Later, as FICCI president, he represented the entire industry’s causes. After selling BPL Mobile to Essar (now Vodafone), he’s searching for the next big deal: his current calling card says hotelier and venture capitalist. But then, he’s also on the lookout for acquiring a media company, one more channel for influencing opinion.
By Sunit Arora and Arindam Mukherjee with Pragya Singh, Lola Nayar, Smruti Koppikar & Anuradha Raman