NALSAR UNIVERSITY OF LAW

POLITICAL SCIENCE

CORPORATE INFLUENCE ON POLITICS

SUBMITTED TO:

MR. VAGEESHAN HARATHI

SUBMITTED BY :

YASHASHREE MAHAJAN

2010-36

1ST YEAR BA.LLB(HONS.)

1

Contents1.1 RESEARCH METHODOLOGY.................................................................................................................3

1.2 RESEARCH PLAN...............................................................................................................................4

CHAPTER2: DEFINITIONS.....................................................................................................................5

2.1.WHAT IS CORPORATE?...............................................................................................................5

2.2.WHAT IS POLITICS?....................................................................................................................5

2.3.RELATION BETWEEN POLITICS AND CORPORATES...................................................................5

CHAPTER 3: POLITICAL INFLUENCE ON CORPORATIONS...................................................................7

CHAPTER 4: TECHNIQUES OF CORPORATE INFLUENCE ON POLITICS...............................................9

4.1.FINANCIAL SUPPORT..................................................................................................................9

4.2. DIRECT LOBBYING..........................................................................................................................10

4.3. CAPTURED REGULATORY AGENCY......................................................................................................11

4.4.ADVISORY COMMITTEE TO THE GOVERNMENT.....................................................................................12

4.5. COURT ACTION...................................................................................................................13

CHAPTER 5: WHY DOES CORPORATE INFLUENCE POLITICS..................................................................15

CHAPTER 6: EFFECTS OF CORPORATE INFLUENCE ON POLICY AND PEOPLE..........................................17

CHAPTER 7: CONCLUSION....................................................................................................................19

BIBLIOGRAPHY.....................................................................................................................................21

\

2

CHAPTER 1: INTRODUCTION

Politics has existed with the existence of society and so has business. It may have changed in

its form, in its structure, in its organization but its existence has continued uninterrupted since

time memorial and will continue to do so for the era’s to come. Both this organs have always

shared a bitter sweet bond, with both the parties aware of others existence and importance.

The relation existent right now is the one where corporations attempt and many times take a

substantial amount of power in their hand by different means of influence. The key questions

that arise over here is, how do these corporations influence control?, if they do what is the

result of this control? Is this influence always bad? And also is this influence only uni-

directional, doesn’t politics at time also play an important role in a way the policies of a

certain corporation are shaped. This and many more questions come to your mind when we

talk about corporations and the influence they have on politics. These questions have been

addressed in the following project and an conclusion has been reached.

1.1 RESEARCH METHODOLOGY

The researcher has adopted the doctrinal form of research in completing this project.

As the project is an analysis of the corporate influence on politics, the doctrinal form of

research was most appropriate. The research is primarily web-based relying on articles by

eminent authors on the issue, statistics from Governmental organizations .

1.2 RESEARCH PLAN

1.2.1 Aims and Objectives

Through this project the researcher aims to provide the reader with a detailed

overview of the influence corporations have on decision making process of the government.

The researcher has carefully scrutinized the important concepts and given a brief study on the

same.

1.2.2 Scope and Limitations

Within the scope of this project the researcher will discuss and analyze the main

questions that arise, solutions and their implementation, which are important for a proper

3

understanding of the problem at hand. Due to paucity of space and time to some extent, the

researcher will be unable to include all the concepts and limit himself to analyzing and

discussing only the important ones in the topic.

1.2.3 Chapterization

The researcher has divided his project into 7 main chapters. Firstly, it begins with a

brief introduction to the topic. The second chapter looks at the influence of politics on

business. The third chapter looks at the various techniques of influence adopted by the

corporations. The fourth chapter tries to find the reasons for this influence. The fifth chapter

deals with the effects this influence has on policy decisions and people as a whole. And in the

chapter the researcher concludes the project by looking at the positive side of this influence

and also suggesting various methods to reduce this influence

4

CHAPTER2: DEFINITIONS

2.1.WHAT IS CORPORATE?

It is a separate legal entity having its own privileges, and liabilities distinct from those of its

members1. There are many different forms of corporations, most of which are used to

conduct business.

Despite not being natural persons, corporations are recognized by the law to have rights and

responsibilities like actual people. Corporations can exercise human rights against real

individuals and the state, and they may be responsible for human rights violations.] Just as

they are "born" into existence through its members obtaining a certificate of incorporation,

they can "die" when they lose money into insolvency .2 A corporation is an institution that is

granted a charter recognizing it as. Corporations can even be convicted of criminal offences,

such as fraud and manslaughter.

2.2.WHAT IS POLITICS?

The word politics is derived from the Greek word “POLIS” meaning the city. For the Greeks

city means the state and subject that deals with the city state is designated as politics.

According to the new development made in the field of political science the meaning of

politics hinges upon the political activity carried on in human environment, in time and space,

and thus product of economy, society , history and economics. 3Politics arises when there is

an interaction between two human beings; it depends on various sociological factors like

environment, culture, economics etc. In its negative connotation politics is used to define the

power struggle between individuals for control over something from a household to a nation

to the world.

2.3.RELATION BETWEEN POLITICS AND CORPORATES

There has been an intermingling between politics and business since time memorial. This

relation can be traced back to Indus Valley Civilization where the merchants or traders played

an important role in determining the functioning of the society or to the Gupta period where

there were special Trade Guilds which controlled the trade and had adjudicating powers in

contracts that arose from such trade practices. At times these Guilds became so powerful that

they started asking for more and more independent authority. The relation between politics

1 http://en.wikipedia.org/wiki/Corporation2 Ibid p13 A.C.Kapoor, Principle of Political science, S Chand ,pg 8

5

Need to explain itin more detail

and business has always been a dicey one with one trying to influence the other to further its

cause. In a way they act as a system of checks and balances so that one of them doesn’t

become more powerful and in the end cause hardship to the people who are influenced by its

activities. Over here we talk politics in terms of political parties, political representatives and

ruling party.

The relation between politics and business differs from country to country. In Europe,

government and corporations have cozy shared-bed relationships built on the statist model of

capitalism. European corporate leaders employ the state to plow the road for them in more

ways the one, while legislatures pass few restrictions that business leaders have not privately

assented to: The typical European CEO Views government as a patron. In the United States,

by contrast, business leaders almost uniformly despise government, and relations with

regulators are adversarial4. In India the relation is a symbiotic one where one is dependent on

the other for gains for e.g. the government or ruling party depend on business class for funds

to manage its affairs which in turn gives the corporate houses power to control the laws being

passed which in turn increase their profits which in turn give them more money to support the

government and the cycle continues. , the executive authority is the third wing of the triangle,

who implement the law and wields a considerable power hence the corporate then try to

influence them in changing the implementation hence creating a win-win situation for the

government and the corporate.

This dynamic relation in turn affects the common man who is affected most by the

“politics” played by the above three. It is important to limit the activity of the business who

feel they are invincible and have a free hand in doing whatever they feel like. A simple

change in law that has to be passed in favour of corporations can result in a huge profit

margin for the companies while at the same time lead to losses of crores to the people in

direct or indirect ways.

CHAPTER 3: POLITICAL INFLUENCE ON CORPORATIONS

4 ?www.thefreelibrary.com/Kindred+Strangers%3A+The+Uneasy+Relationship+Between+Politics+and...-a018750219 

6

Para Phrasing required

The politics of the area at times play a very high influence on the decision making of the

corporation situated in that area. A corporation many a time needs the green signal of the

local authorities to carry out the project, getting permission from the top level is not enough.

This is because of the fact that many a times the labour unions of the corporate are a wing of

one of the local political parties therefore the political parties influence a way in which the

labour laws of the company are implemented. These local parties or in some cases local

wings of a party hold the corporation to ransom while furthering their demands. This was

seen in 1970 Bombay mill strikes where the labour unions of the textile mills went on an

strike demanding better wages and better working conditions, while this on face value seems

to be an honest attempt by the workers to demand their rights what we don’t see us the

politics that played behind the entire incident. The strike started to gain more rights to the

workers then turned in to a political tug of war, between the various political parties trying to

gain mileage from the strike. The strike crippled the Mumbai textile industry for over a year,

forcing it to shut down, many mills had to be shifted out of the city , rendering huge losses

for the mill owners affecting the supply of textile, this all happened due to the fact that the

strikers couldn’t reach a consensus on demand. It was not only the corporations that were

affected, but also the thousands of mill workers that lost out on their jobs and livelihood. This

all happened due the vested interest of few for control of power5.

Also the ideologies of the government present at that time affect a lot the parties are socialist

or leftist in their ideologies don’t like the idea that a few will handful ruling and controlling a

large part of the economy. So when such parties come into power it becomes quarantine for

all the corporations who are forced to go into isolation while having limited access to the

larger trading world. Such governments believe that economic power should rest with state

who “look out” for the larger welfare of its citizens than in the hands of a few who turn

violate it for their own benefit so when the political authority rest with under such an

ideology you see a number of autocratic reforms. There is an increase in tax rates, certain

subsidies that are granted to the corporations are taken back. There is a stricter control over

the trade policies which turn squeezes the corporations that they need to go under the

government’s umbrella for survival. This makes the trade policies very unilateral with no

bargaining powers to the corporations. The whole economy runs on the directions of

governing party without any check.

5 knowledge.wharton.upenn.edu/india/article.cfm

7

The situation is diametrically different for a party with if they are capitalist in their

ideologies. Here the ruling power believes in lazzaie faire situation which implies no

governmental regulation in economic activites carried out by the corporations. The corporate

ends up having a free hand in their decision making, as the regulation are removed. The trade

barriers are lowered, taxes reduced, more autonomy is granted to the corporations. The rich

and the powerful are allowed to grow in strength without a proper check laid on them. This

way we can see how the ideologies of the ruling government end up affecting the functioning

of corporations

The Singur controversy is one of the latest examples where a major project had to be shifted

out of the state due to the agitation of the parties. The choice of Singur was made by the

company among six sites offered by the state government. The project faced massive

opposition from displaced farmers. The Tata Motors site was one of the most fertile one in

the whole of the Singur, and the Singur block, in turn, is among the most highly fertile in

West Bengal. Consequently, almost the entire local population depends on agriculture with

approximately 15000 making their livelihood directly from it. With the number of direct jobs

to be created no more than about 1,000, many of which are expected to go to outsiders, the

local populace feel understandably threatened for their livelihood. Environmental degradation

is also feared. The unwilling farmers were given political support by West Bengal's

opposition leader Mamata Banerjee. Banerjee's "Save Farmland" movement was supported

by celebrity environmental activists like Medha Patkar, Anuradha Talwar and Arundhuti

Roy. Chief protesters include the opposition parties spearheaded by the Trinamool Congress

under Mamata Banerjee and Socialist Unity Centre of India. The ruling government overtook

the land under Land Acquisition Act of 1894. The law has provisions for state taking over

privately held land for public purposes but not for developing private businesses. The

illegality of the acquisition has been substantially conceded by the Kolkata High Court6.

CHAPTER 4: TECHNIQUES OF CORPORATE INFLUENCE ON POLITICS

4.1. FINANCIAL SUPPORT

6 www.amazines.com/Tata_Nano_Singur_controversy_related.html

8

Need to Paraphrase last two paragraphs

Also need for better examples phrased better

Political process is a expensive one which requires a large amount of money. There is a huge

need of money for political campaigning which cannot be raised by the party itself and

requires some additional money which is provided by corporations. There are tight legal

limits on the amount of money a candidate can spend during the election campaign. In most

Lok Sabha constituencies the limit as recently amended in December, 1997 is Rs 15,00,000/-,

although in some States the limit is Rs 6,00,000/- (for Vidhan Sabha elections the highest

limit is Rs 6,00,000/-, the lowest Rs 3,00,000/-)7. Although supporters of a candidate can

spend as much as they like to help out with a campaign, they have to get written permission

of the candidate, and whilst parties are allowed to spend as much money on campaigns as

they want, recent Supreme Court judgements have said that, unless a political party can

specifically account for money spent during the campaign, it will consider any activities as

being funded by the candidates and counting towards their election expenses. The

accountability imposed on the candidates and parties has curtailed some of the most

extravagant campaigning that was previously a part of Indian elections. To help the party get

around these loopholes the corporate firms donate money and in turn influence the decision

making

a) Political Action Committee

A political action committee is a separate fund or organizations to which members of a

group--such as a corporation, labour union, or trade association--can donate money. These

funds, in turn, are used to contribute to political campaigns in the name of the group8.

b) Soft Money

Party collect money for party building and voters registration drive, without actually

supporting and campaign for a particular candidate, this money has no restriction. The party

can collect such money and it can use it to advertise for the party as a whole and not focus on

any particular candidate.9

c) Independent expenditures

7 www.indian-elections.com/.../politicalpartiesandelections.html8 www.polisci.ccsu.edu/trieb/InfluGov.html9 www.polisci.ccsu.edu/trieb/InfluGov.html

9

Needs reframing particularly because financial support hasn’t been explained well

Another important way to get around the law is mechanism

called independent expenditures. An independent expenditure is made by an individual or

organization that is not connected with a candidate's campaign, but favours that particular

candidate. Like the party may campaign against the opposition candidate, or an individual

can place an report showing the candidate in positive light, you can’t control published as

controlling it would be violating the right to freedom of speech.

This way the corporations using the above mentioned methods or various other underhand

methods end up contributing huge amount of money for political activities especially during

election time and hence end up wielding considerable influence among the political scenario

of the time.10

4.2. DIRECT LOBBYING

The Indian economy, by and large, functions around the government’s discretionary powers.

Whenever government changes, the wielders of these discretionary powers also change

making things worse for the lobbyist. Lobbying goes on all the time, mainly because the state

retains so much discretionary power.

Direct lobbying involves meeting with representatives, senators, or their staffs--or with

members of the executive branch, and trying to inform them of your point of view and

hopefully getting them to act in a way you would like11. A successful lobbyist needs to know

how to make representations to government, what tools and techniques can be effectively

used to communicate with MPs, MLAs, ministers, etc. These are both the obvious and arcane

bits of knowledge that empower lobbyist to understand better the working of the government.

There are basically three functions served by a lobbyist:

1. To inform the government about the industry or cause for which you are lobbying

and of the stance those for whom you are lobbying are taking;

2. To inform those who hire you of potential government actions which are likely to

affect them. These may include pending legislation, pending regulations, and

upcoming hearings which are to be heard on topics of interest to those for whom you

work;

10 Ibid 11 Ibid

10

3. To try to convince the legislator, staff member, or administrator to make decisions

favorable to your employer's industry or point of view.12

In the case of representatives and legislators this usually means getting a bill passed or

amended, or getting a bill killed so it does not become a law. Corporations have a better way

of influencing government as that with their financial support have a better chance of

approaching the government. It is done through professional lobbyist or previous senators

who have retired.

Lobbying in India is at a nascent stage. Until recently, it was rated equivalent to influencing

government policy with money. With increased transparency in governance, corporate

entities realised that a more legitimate method is needed to influence policymakers.

4.3. CAPTURED REGULATORY AGENCY

Regulatory agencies are specialized bodies which work closely with the corporate. After a

certain time these authorities start taking decisions benefiting the corporate, with the industry

they regulate. So, after a while they think very much like that industry. It is not that anyone

does anything corrupt per se; it is just a natural human behaviour you get to know these

people and you want to protect them.

Triangle of influence

The regulatory agencies are always the targets of corporate influence. In each area of policy,

a triangular relationship exists. The players are the lobbyists and corporations and other

private organizations in that area, the congressional committees and subcommittees who

make decisions about that subject area, and the executive agencies and regulatory

commissions that operate in that field. The connections between these players are as follows:

Corporations for whom the lobbyists work give campaign contributions to members of the

congressional committees that make decisions about that field. These committees and

subcommittees in turn determine the jurisdictions, and sometimes the budgets, of the

executive agencies and regulatory commissions that work in the field. Finally, the executive

agencies give out government contracts, which can be very lucrative to the industry; while

12 S.R.Baru, The Growing Influence of Business and Media on Indian Foreign Policy,2005

11

Decent but needs to be re organised in a little coherent manner

the regulatory commissions adopt regulations, which can be beneficial or restrictive to the

industry at hand. If everyone in the triangle cooperates, as they usually do, everyone

benefits--that is, everyone except the general public13.

These triangles are called Iron Triangles . These symbiotic relationships, which exist in

every policy area, are also known as sub governments.

4.4.ADVISORY COMMITTEE TO THE GOVERNMENT

. The fact is that the government does not have fact gathering apparati in a number of fields.

And so, government agencies appoint committees to provide information and advice, these

committees contain people from the field or heads of corporations as advisors. , if the

information that government agencies are getting is from the industry involved, then the

perspective from which they get the information is likely to be one-sided. The government

rarely asks for a third party who is not related to the concerned field but may be affected by

the working of the committee for their views in the matter as it is considered to be

unimportant This gives them a perspective that is one sided and creates an unfair advantage

13 www.polisci.ccsu.edu/trieb/InfluGov.html

12

for the corporations. The presence of industrialists on parliamentary committees and their

decisions could influence their businesses.

Even a cursory look at the members’ list of important committees, including the standing

committees on finance and industry, the public accounts committee and the public

undertakings committee, reveals a startling number of industrialists.

Take the standing committee on finance. Its members include industrialist and venture

capitalist Rajeev Chandrasekhar from Bangalore; Andhra Pradesh chief minister- hopeful and

the state’s leading business magnate Y. S. Jaganmohan Reddy; pharmaceutical baron

Mahendra Prasad, who is popularly referred to in Bihar as ‘ King Mahendra’; Maharashtra-

based industrialist and media baron Vijay Jawaharlal Darda14.

Basudeb Acharia, who heads the agriculture standing committee and is also the CPM’s floor

leader in the Lok Sabha, said the guidelines already state that members having conflict of

interest with the issue being discussed must leave the discussion, but this is not strictly

enforced. “Obviously there will be conflict of interest if committee members are also dealing

with the industry sector under consideration,” he said15.

4.5.COURT ACTION

In this method, the company . The fact is that corporations can pay a lot more for legal work

than the government. Many times corporate lawyers don not aim at winning a case, but

simply at delaying government action. This buys them enough time to go forward with their

plans and once there motive is fulfilled they withdraw their case. Or if they are being sued

they pay the fine and get out of the litigation.

Let's say a corporation has an advertisement on television that information and broadcasting

ministry feels is misleading to the general public. The IB ministry may issue a ruling for the

corporation to withdraw that advertisement from the air. The corporation then gets its lawyers

to seek a temporary injunction against that ruling until a hearing on the ruling can be held. In

the meantime, the advertisement remains on television. Then, the corporation's lawyers use

various legal tactics to keep delaying the date of the hearing. There are lots of ways lawyers

can do this. Let's say the hearing finally comes up a year later. Before the hearing actually

14Sowmya Aji, India Inc. MP’s in Ethics Tangle, mail today,24/9/09

15Ibid

13

begins, the corporate lawyers announce that they are going to withdraw their objections and

that the corporation will follow the IB’S ruling and withdraw the ad. They know they don't

have a leg to stand on in court. Has the corporation lost? No. While all this has been going

on, the advertisement has been on television for a whole extra year. So even though the

corporation is eventually going to lose the case, it winds up winning by delaying things.

Delays can be helpful to the corporations in other areas as well. Let's say there has been an

accident in the company's plant and the corporation has control of its workers' compensation

payments for the accident. The corporation's lawyers may keep delaying the payment of these

compensation benefits. What you may have in this case is working class families that can't

afford these delays. They have to live with large medical expenses, and they have a hard time

keeping things together. The corporation then offers them a much lower settlement. And

because they need the money so desperately, the families are willing to take

something now, rather than wait for the larger payment to which they are entitled16.

CHAPTER 5: WHY DOES CORPORATE INFLUENCE POLITICS

The key to business success in India lies often less in real entrepreneurship than in capturing

the major functionaries of state. Nothing guarantees you higher profits better than favourable

official treatment, which allows you to corner resources, grab licences or establish

monopolies. That’s why Indian businessmen invest so much in influencing policies and

16 http://www.polisci.ccsu.edu/trieb/InfluGov.html

14

policy-makers, in creating lobbying institutions such as FICCI, Confederation of Indian

Industry and Assochem, and in building personal relationships with and patronising political

leaders17.

One of the major benefits a corporation achieves by manoeuvre the policy making is non-

decision or miniscule changes in the policy which to a naked untrained eye seem trivial but

end up creating colossal amounts of profit for the corporations. Many a times corporations

may not want certain laws to be passed or a new regulation to be enforced, they use their

influence to make sure that the bill proposing the changes die a natural death. They ensure

that the certain law or a provision is not discussed, or if it is no concrete action is taken on it.

This way the law and its purpose slowly fade out of public and there is a win -win situation

for both the corporations and the government, who are also saved from the public wrath.

Even if they can’t stop a bill or amendment, corporations use their influence to get minor

changes done in the proposed bill or amendment which won’t be noticeable on face value but

will lead to huge amounts of profit in the long run. On key issues representatives are likely to

vote in the public interest as they conceive of it; but on these small points, they may vote with

the special economic interests that support their campaigns. They give one industry a tax

break here, and another industry a tax break there. It doesn't seem to hurt anyone, and besides

it's buried in the details--so no one notices. However, these little tax breaks add up to a great

deal of money the government does not have which it could use for programs that serve the

people18.

One of the other ways in which the influence comes handy is when the time comes for

awarding tenders to the corporation for specific contracts. On the face value the process

seems to be very fair with interested companies applying and the company with the lowest

quotation and the desired assets winning the tender but many things can swing the tender in

the favour of company in an direct or an indirect manner. it can be in form the tender details

being leaked out prematurely, or other companies with competitive prices being rejected due

to technical issues, anything can be managed if you have the right contacts within the

ministry awarding the tender.

17 P.Sainath,Drought of Justice,flood of funds,Hindu,15/8/200818 http://www.polisci.ccsu.edu/trieb/InfluGov.html

15

Due the above and many other reasons corporations don’t mind spending an extra bucks or

putting a little extra effort in buttering up the policy makers if it is going to provide fruitful

and green results in the long run.

 

CHAPTER 6: EFFECTS OF CORPORATE INFLUENCE ON POLICY AND PEOPLE

COrporate with its power plays an important role in the policy considerations. As we see from

above that there are a no of ways in which corporate have their hand deeply sunk in decision

making, let it be through lobbying, financial support or their agents in the government. All

16

such influence at times proves to be detrimental for the society at large. When they influence

the policies the policies get converted in the favour of the corporate. This can be seen in an

example from the states. An example of this is the bipartisan support of NAFTA(North

American Free Trade Association). NAFTA has been devastating to workers and has

lessened environmental protections. It has been responsible for the loss of hundreds of

thousand high paying manufacturing jobs. Also, it has suppressed real wages, weakened

workers’ collective bargaining power, and reduced fringe benefits. Although NAFTA has

been a boon to the American worker, it has been a blessing for corporations and Wall Street.

It has enabled corporations to save money on labour cost and avoid costly environmental

protections. NAFTA has caused an increase of money for investors (Scott)19.

We elect are representatives to protect us and when they turn puppets into the hands of

money feeding corporate, they end up increasing our vulnerability to damage, There are

instances where corporations are involved in human-right violations, coercion of the work-

force, violating labor laws, inhuman working conditions to regime changes, supporting brutal

regimes, controlling corrupt governments, enacting favourable laws,  to polluting rivers,

dumping industrial waste, endangering the ecosystem, exposing populations to dangerous

chemicals, to collusion, anti-competitive practices, tax-avoidance, and other corrupt

practices20.

This was seen in the nestle baby food scandal where the company heavily advertised the use

of its baby food mix as a better substitute for mothers milk, when in reality such claim had no

scientific backing. This campaign continued for a long time till the international

organisations and the governments woke up from their feigned slumber to take some actions.

What is surprising that the government itself advertised this mixture as a important food

component for the infant, without bothering to validate the results obtained by the company

by their own series of test.

Even through the policies of the government the money always seems to be their for the big

corporations who had influence to turn them there way. It doesn’t matter that hundreds of

people are cying of hunger due to misallocation of funds for example take a look at the

budget and the “Revenues foregone under the central tax system.” The estimate of revenues

19 http://whatreallyhappened.com/blogs/dean/10/04/04/corporate-influence-government20 http://ajmalla.blogspot.com/2010/03/corporations-their-influence-and.html

17

foregone from corporate revenues in 2008-09 is Rs. 68,914 crore.21 By contrast, the NREGS

covering tens of millions of impoverished human beings gets Rs. 39,100 crore in the 2009-10

budget. Only one thing can be seen in such a situation that the more influence you have in

the government the more money you end up wringing, it does not matter whether such

allocation of resources makes sense or whether it really proves beneficiary to the masses.

This and many more examples time and again prove to us how excessive influence of

corporations can prove detrimental to the overall functioning of the governmental machinery

with the balance tipping unjustly to the side of the powerful.

CHAPTER 7: CONCLUSION

While undue influence of corporations does has its ill-effect on governmental policies, at

many time such an influence might prove to be a healthy check on the powers of government,

leading to an overall robust growth for the economy. History is the witness to the fact that

country with high level of industrialisation is a country which has achieved high levels of

21 http://indiabudget.nic.in/ub2009-10/statrevfor/annex12.pdf

18

growth. And this high level of industrialisation was possible in most countries barring a few

communist countries, due the influence the corporate could exert on the existing governments

to provide some leeway for them.

This is mainly due to the fact that corporate and politics have different approach when it

comes to decision making. Corporate for policy decisions always have had a futuristic

approach, they are more open to embrace newer technological and economical changes ,

while, politics by nature has to depend on popular vote , which is more status quo-ist in its

approach, may not respond well to newer technological changes, due to the fear that it may

lose popular support. Such a stagnant economy will prove detrimental for the growth of the

country. Outdates technology and trade policies will lead to improper allocation or over-

consumption of resource which will in turn lead to a nation full of unsatisfied citizens.. To

counter this it is important that corporate have a healthy influence on politics so that it drives

the policy makers to take some decision which are not for the masses but actually help

industrialisation of a country. Leading to a healthy and thriving economy.

But at the same time it is important that this influence doesn’t exert a certain limit as in where

the governmental machinery becomes a mere puppet in the hands of the government, which

may then lead to situations as discussed in chapter 6. This can be done primarily by

increasing people’s participation in politics. When the government is aware of the fact that

people are keeping a hawk eyed view on all its activities, then it is less likely to decisions

which are biased in its nature atleast openly. Also lobbying as an activity should be legalised

and more and more professionals should enter it or should be encouraged to enter into it. It is

a well known fact that legalising something makes it easier to control and more accountable.

Also so that lobbying doesn’t remain in its crude version with influence being equivalent to

money, but a more organised structure with other methods of influence by actually meeting

the legislators and convincing them about the side of your client, building and maintain

contacts and relationships.

While influence of corporations is not always bad, atleast in the present scenario, it should be

kept minimum so that maximum benefit can be derived from its limited presence , while not

affecting the public friendly policies of the governments

19

BIBLIOGRAPHY

1) ARTICLES REFERRED

1) P.Sainath, The Winter of our Austerity, The Hindu,8/10/2009

2) Sowmya AJi, India Inc MP’s in Ethical Triangle, MAil Today,24/9/09

20

3) Mukul Sharma, Companies Bill & Social Accountability, The Hindu,3/10/09

4) S.R.Baru, The Growing Influence of Business and Media on Indian Foreign

Policy,2005

5) P.Sainath, Drought of Justice Flood of Funds, The Hindu,15/8/2009

6) Praful Bidwai, When Corporations Capture the State,Rediff.com,7/8/2009

2) WEBSITES REFERRED

1) http://www.sacw.net/article1160.html

2) www.jstor.org

3) http://www.actionaid.org.uk/doc_lib/174_6_under_the_influence_final.pdf

4) http://www.india-seminar.com/2001/502.htm

5) http://en.wikipedia.org/wiki/Corporate

6) http://findarticles.com/p/articles/mi_m1316/is_n10_v28/ai_18750219/

7) http://www.chillibreeze.com/articles_various/Indian-Politics.asp

8) http://indiabudget.nic.in/ub2009-10/statrevfor/annex12.pdf

9) http://www.polisci.ccsu.edu/trieb/InfluGov.html 10) www.amazines.com/Tata_Nano_Singur_controversy_related.html

11) www.indian- elections .com/.../politicalpartiesand elections .html

3) BOOKS REFERRED

1)A.C.Kapoor, Principles of Political Science, S. Chand, New Delhi,2009

21