The Belvedere. Oberoi Hotel. Mumbai. Perhaps it’s the pre-budget mood. Somehow the ambience reflects the twilight of a setting sun. In the library, Shiv and Raj Kumar Jatia are in animated discussion. At another table are Rana Kapoor and officials of Rabo Finance. Videocon’s Venugopal Dhoot walks in to meet some foreign investors. The stewards hustle around to serve the members their patent drinks. There is a kind of hush all over the club.

Cover Story: Budget Lobbying

Dil CHAHTA HAI The wishlist of what the Indian industry wants in the budget Ratan Tata Restore Investment Allowance Rationale: India suffers an imbalance in the overall economic pie. There is a need to spur investment in the industrial sector. Raaz: Aimed at profitability for those who have already decided to invest. Unlikely to promote investment as that requires addressing demand depression. This will only help those who want to manage tax through creation of assets. Does nothing for the services sector. Gainers: Reliance, L&T, Grasim, Hindalco, Sterlite, Telco and Tata Steel Cut Corporate Tax for MNCs Rationale:Level playing field for foreign companies who are taxed higher than Indian Companies at 48 per cent. Raaz: Pressure from foreign envoys on behalf of MNCs plus need to woo foreign investment vis-à-vis China. Will enable companies to repatriate higher dividend to parent companies. Gainers: Hindustan Lever, Procter & Gamble, Colgate, Castrol, ITC and other multinationals Slash excise duty on ACs Rationale: AC's role in hi-tech industries "cannot be gainsaid", says CII. Also room ACs attract 32 per cent duty compared to 16 per cent for other consumer durables. Razz: Having grown at 18 per cent for four years, ACs have hit the second level of income groups. To penetrate this they need a price differential. Gainers: Carrier, Voltas, LG and Videocon Sunil Mittal Cut Duty on Mobile Handsets Rationale: Will bring down handset costs by around Rs 3,000, enable consumers warranty service and earn the government revenue. Raaz: The demand was rejected last year but this year the government seems positive, perhaps due to the big player waiting in the wings. Gainers: BPL AT&T Tata, Orange, Bharti, Essar, MTNL and Reliance Sops for NPA Provisioning Rationale: Number of weak banks on the rise creating a corporate debt overhang. Raaz: Banks get a tax break only when they write off bad loans. If allowed tax breaks, they will clean up their books. Gainers: Big banks, NBFCs, FIs and borrowers who hope this will bring down interest rates Anil Ambani Nix Minimum Alternate Tax Rationale: Goes against the policy of tax holidays to promote investment. Raaz: Not acceding to this demand won't affect the economy but business barons may be pushing for it. Gainers: Cash-rich and high-profit companies like Reliance, L&T, ACC and Gujarat Ambuja Cements Hike agriculture outlay Rationale: Increase in outlay and creation of futures market will raise productivity. Raaz: Will increase the spending power in rural areas and improve sales of consumer goods and durables. Gainers: HLL, Colgate, Videocon, Samsung, LG, BPL, M&M, Telco, Bajaj Auto and Hero Honda

Then, almost shattering the calm, Vijay Kalantri—Congressman, lobbyist and chief of All India Association of Industries—troops in. In one breath he calls a steward to get his black suit, flings a hello to the Jatias and asks for a glass of red wine. As he plonks himself on a leather chair opposite a steel baron there is an air of inevitability about the question: Budget mein kuch hoga kya?

Typically, Kalantri shoots from the hip. “Boss, why are you worried? Let IDBI, ICICI, IFCI and banks do the lobbying for you. After all they have crores of rupees stuck in the steel sector.” There is an uncomfortable pause, then the steel baron guffaws. Perhaps he’s right. Perhaps steel barons don’t need to lobby. You could even say the steel industry—hit by falling prices, overcapacity and mounting losses—is in a unique position.

The black humour is not unique. Indeed, given the steady slide of industrial production and other economic indicators over the past two years a clear sense of aggravation pervades any discussion. With virtually every segment of industry—fmcg, consumer durables, automobiles, chemicals, cement—caught in a do-or-die situation, gallows humour dominates this year’s discussions.

The modus operandi of lobbying hasn’t changed though. It may sound unbelievable, but while the budget is written in North Block it is actually conceptualised elsewhere. In the corner cabins of corporate offices, clubs, restaurants, hotel rooms, even guest houses. That is really the easy part. The tough part is to carry the ideas—read sops—into the budget. You could start by booking a place on the pre-budget jamboree. Every year, between October and January, the finance minister meets over 100 delegations, including corporate pashas, chiefs of the cii, ficci and assocham, representatives of the small-scale sector, members of export promotion councils, agriculturists, economists, management consultants, investment bankers and trade unionists, among others.

But a seat is no assurance on getting a word in during the two-hour meetings. Neither is it any easier at the 40-minute sessions with the chiefs of the Central boards of direct tax and excise and customs (cbdt and cbec). Again getting to speak isn’t the same as being heard by the government, although Amit Mitra, secretary-general of ficci, says, “There has been a slow but systematic increase in constructive interaction in the past five years.”

This may be partially due to the “partnership” approach professed by successive governments.

The truth though is that industry bodies today are far better equipped with experts, presentations and viewpoints. ficci, for instance, interacts with over 500 chambers for suggestions which are vetted by 24 experts and 100 researchers before finalising its presentation. Then it carpet bombs the government with 200 copies of the presentation.

It’s not just the chambers. Flanking them are consultancies, global investment advisers, ngos, even envoys who manage to get a hearing. Those who fail adopt unique, indigenous methods. One association which failed to get time from the cbdt chief for three months sought out Shatrughan Sinha who managed a meeting for them without an appointment. Enlightened, the association is now setting up a panel of helpful MPs.