Business in India: Working With Politicians

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.