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Business in India: Working With Politicians

Jun 11, 2019 | 9m

Gain Actionable Insights Into:

  • Put together a proposal that Government officials can’t say no to
  • Navigate the various big egos that you may encounter
  • Use Industry Forums to rally other stakeholders to your cause

Setting the Stage

When your company’s interests align with the interests of large groups of people that fall under a politician’s constituency, working with Ministers and Politicians (M&Ps) can help you navigate any laws or provisions that are standing in your way.

Let’s use the example of a power generating facility that uses captive coal to supply power to consumers at a competitive rate. Now let’s imagine that the statutory authorities impose a ceiling on annual coal production. Due to this restriction in annual coal production, the company’s power generation will get restricted at peak season. As a result, consumers no longer have access to low rate power, and the company also suffers a loss of revenue. The consumers would end up having to opt for more costly options in peak season. The company can consider approaching the Government to relax the ceilings on annual coal mining. In this case, relaxing the ceilings would involve multiple government institutes. However, if approval was granted, it would be a win-win across all stakeholders - customers, the company, and the Government.

Could your business benefit from the involvement of policy makers? If so, you’ll have to find a way to put it across to the M&Ps that it would be beneficial to the masses to support your company’s views. One way to do this is to focus on how a change in the law would benefit a social cause that they support.

Choosing Your Cause

Start by reframing your business goals as social benefits. You could start by identifying an area of your business that requires intervention from policy makers. Then, find a social angle that is relevant to this specific area of your business. Make this your central cause.

There could be two types of issues that would require intervention from Government officials. One involves long term investment decisions, for instance capital, and the other involves short term queries such as taxation interpretations or clarifications.

Long term issues usually involve gaps in the laws or statutory provisions. Approvals and ratifications will hold these laws in permanence even when the M&P change, as they’d be validated as per delegation. As long-term issues typically would impact investors across the industry, you should approach the issue on relevant public forums that are open and common to those impacted.

Do take note that when a certain business is benefitting from the current legal provisions, one of two things usually happens. You’ll either have a lot of competitors entering the market, or the law will be amended to avoid a monopoly. In either situation, what is your Plan B? Make sure you factor in any future developments that could impact your industry, and be prepared to handle these curveballs.

On the other hand, short term issues could be short term government policies, wrong implementation of government programmes, tax laws, fiscal policies dealing with imports and exports, or adverse judicial pronouncements.

With short term issues, you would have to work quickly, and in collaboration with your local M&Ps and bureaucrats. Sometimes, your local minister or politician may not belong to the ruling party. Especially in these cases, make sure to keep your M&Ps updated about matters pertaining to your dealings with the ruling party.

Aligning Your Cause With Policy Makers

Once you’ve identified the type of cause you’re dealing with, identify the ministries and officials who have the authority to help make the concessions you need. You then have to prove to them that a variety of stakeholders would significantly benefit from their involvement. Keep in mind that your business may have to return the favour by engaging in more CSR (Corporate Social Responsibility) projects such as helping small entrepreneurs or the unemployed, or through improved tax compliances.

As you find a social angle to your business goals, make sure you’re framing it in a neutral way that doesn’t create political turmoil or controversy. You should also not try to tailor your cause to a specific politician or party but focus on aligning it to what would benefit the government. While M&Ps will come and go, the turnover shouldn’t negatively impact your business. You should always conduct yourself lawfully and follow due protocol. Under no circumstance should it appear that the M&Ps have been helping your business or doing you favours under the table.

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Venugopala Rao Naredla

Senior Advisor | Former CEO

Greenko Group | Reliance Power Limited



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