New Delhi: The Association of Power Producers, a lobby spearheaded by business titans, most often gets what it wants and is proud of its ability to persuade the Union government.

The corporate lobby has such sway over the government that it boldly put to print their humblebragging about using political connections to run down institutional checks and balances.

Its annual report begins with one such feat. “It would not be out of place to mention here that specific intervention by influential members at appropriate times helped to wrinkle out certain stubborn elements,” says the 2020-21 annual report by the Association of Power Producers in reference to policy interventions in the interest of the industry.

The “influential members'' that the report talks about are the 20-odd private companies, which include Adani Group, Vedanta Group, RP Sanjiv Goenka Group and Essar Group, that make up the lobby. 

The Association of Power Producers has regularly had its way with the government. These include successfully lobbying to open up ecologically sensitive forests for mining despite objections by Environment Ministry officials and mining experts, to relax norms to curb air pollution by power plants, to ease green clearances required for transporting coal over long distances and to defer loan repayments.

But how did the lobby gain enough  influence to persuade the government to bring these key policy decisions favouring the industry despite significant harm to the environment?

Underlining the perception of a possible connection between the government’s policy overtures and the businesses is the corporate donations through electoral bonds scheme, which the Supreme Court while striking it down qualified as "purely business transactions made with the intent of securing benefits in return."

Disclosures by the Election Commission at the behest of the Supreme Court show that the ruling Bharatiya Janata Party received over Rs 516 crore as electoral bond donations from the members of the association, their subsidiaries and group companies between 2019 and 2024, a timeline that matches the policy decisions.

India’s mining giant Vedanta Limited and Ahmedabad-based power-to-pharma Torrent Group stood on top with Rs 230 crore and Rs 137 crore donations to the BJP respectively. The next big donor was RP Sanjiv Goenka Group, which donated Rs 106 crore to the ruling party. A bulk of this came from subsidiaries of the Group’s flagship firm, CESC, which is a member of the Association.

Many members of the association, including Torrent Power and Vedanta, donated to parties based in coal-bearing regions and to opposition parties, including the Indian National Congress, as well.

Until the Supreme Court struck down the electoral scheme in February and shed light on the donations, nobody knew who donated how much to political parties and whether the government doing something was in return for something.

Donations through bonds is in addition to the Rs 224 crore that at least five entities linked directly to members of the association have donated to Prudent Electoral Trust. 

The electoral trust is another tool for political donations. Trust pools money from various donors and passes it on to political parties. The way electoral trusts are structured makes it impossible to link a donor and the recipient political party. However, it should be noted that the majority of funds from Prudent –75% – have gone to the Bharatiya Janata Party since 2013, according to an analysis by Reuters.

While these donations came from individual members of the association and not the group itself, as the beginning of the association’s 2021 annual report makes clear, it’s the individual members who can lean on the government to achieve collective goals.

The Association of Power Producers, currently headed by a retired Power Ministry bureaucrat, regularly holds discussions directly with the Union Power Minister and at times even with officials of the Prime Ministers’ Office, show the group’s reports. It also sits in the government’s official meetings on key power sector decisions. 

Lobbying, though largely unregulated in India unlike in the West, is part of any corporate association’s job and they exist across industries. But what makes the Association of Power Producers stand out is their ability at times to influence decisions in their favour despite the government's own internal red flags.

The Reporters’ Collective’s investigation had exposed one such instance of influence-peddling by the association that led the government to unlock ecologically sensitive forests for mining.

In November 2021, riding on rumoured coal shortage and scare of a nationwide blackout – which though was improbable – the association wrote to the ministry of coal arguing to open up more coal blocks, particularly two in the densest forests, as solution.

The letter said we need to dig up more coal to fulfil the energy needs of the nation, buttressed with government’s pet phrases such as atmanirbhar Bharat abhiyan (campaign for self-reliance).

The Coal Ministry did just that. So supportive was the ministry of the demand that they copy-pasted the arguments from the association’s email to defy the environment ministry and twisted the advice of its own expert’s body commissioned to study if sensitive forests can be opened up for mining.

The Collective had accessed the internal records that lay bare the lobbying that preceded the government’s decision to auction mines in dense forests. The Adani Group, member of the association, ultimately bagged one of the blocks opened up after the group’s lobbying.

The association has also skilfully leveraged its influence within the government to circumvent the apex court.

In June 2020, the Supreme Court came down heavily on the power sector which was asking for extensions to install a device that would mitigate sulphur dioxide emissions – a gas linked to respiratory diseases – from power plants. The initial deadline for installing these devices was 2017 which was pushed to 2022.

The association had approached the court asking for a further extension up to 2024. The court said that the Environment Ministry cannot grant extensions unless it can furnish a rationale for the move.

The association seized the opportunity and got to work immediately.

“APP changed its strategy and made several representations to MoP (Ministry of Power), MoEFCC (Environment Ministry) and PMO (Prime Minister’s Office),” says an annual report of the association.

In its presentation to the government, the association said most power projects are not doing well financially and installing the devices would therefore not be possible immediately given the costs involved.

It padded up its argument by talking of a “potential opportunity to boost the Atmanirbhar Bharat vision by providing sufficient time to the domestic manufacturers to ramp up their capacity.”

The association says it was “able to convince the Ministry of Power to write a detailed letter to MoEFCC ( environment ministry) in support of extension of timelines for 2 years.”

“With pressure from APP and appropriate intervention from some of our members, MoEFCC finally issued an amendment on the last day of the Financial Year, extending the timelines for compliance for the TPPs (thermal power plants)...This notification was a major triumph for APP’s advocacy efforts as it was obtained without having to resort to legal challenge,” it said in its report.

Among other victories for the association was the government’s decision to permit power plants to change their source of coal without reapplying for environment clearance.

Earlier, power plants were given environmental clearance to haul coal from a particular mine, taking into account the dust that transporting trucks leave in their wake and the scope of damage to the environment and human lungs. Power plants had to seek clearance to shift to a new coal source as it could mean a different route, through a densely populated town.

Thanks to a 2020 office memorandum, power plants now simply had to “inform” the Environment Ministry of their decision and carry on with their business. 

The association did not respond to detailed queries sent to them despite repeated reminders.