New Delhi, Feb. 18: It is budget time, and a lobbying war is on in the corridors of power. Proposals, requests and demands are flying thick and fast on a whole gamut of issues.

It could be for tax cuts or a tax rise on items ranging from cars, spirits to pension plans. Opinions are also being put forward on unshackling foreign direct investments in key sectors such as insurance, banking and retail, besides relaxing laws in farm infrastructure.

Assocham senior vice-president Sajjan Jindal wants tax sops for Indian firms going global. Gordon Brown, British chancellor of the exchequer, wants UK’s Lloyds to be allowed in India’s lucrative re-insurance business.

Carmakers want the government to redefine small cars since they attract lower taxes.

Every budget sees lobbying by rival groups to protect tax sops, bring about a cut in taxes and sometimes even create a tax shield from cheap imports. Of late, foreign missions have also joined to get a better deal for their companies.

Political parties are also lobbying for budget help for their constituents. One party wants vanaspati oil manufacturers to be protected. Another wants tax sops for textile mills. Yet another wants the threshold limit for paying income tax to be raised.

Balancing the interests of rival business houses is a tough job. But balancing that of rival nations and political parties requires greater tact and diplomacy. North Block mandarins say they are learning.

The US, EU and UK have been pressing for further opening up of the financial sector. Embassies of the US and the EU nations have been lobbying for greater access for foreign banks in India.

Top representatives of various foreign banks have also done the rounds of the North and South blocks with their demands.

Brown is pitching for the opening up of the reinsurance sector. The US has long been keen on stepping up food imports. This can well raise the political temperature in northern India, home to the country’s nascent food processing industry and where prices of farm products are rising.

The EU, on the other hand, has been resolutely lobbying with India to bring down the plethora of taxes on imported spirits.

It said while the EU is India’s largest trading partner, India is ranked 14th in terms of trade by EU with other countries, way below China, Brazil and South Africa. India gets just 0.2 per cent of EU’s overseas investments.

Both the US and EU know that India is keen to step up its share of the huge multi-billion-dollar market for services and goods in the West. Consequently, the bargaining chip for greater market and investment access is greater outsourcing.

“A no to one is linked to the other,” agreed top finance ministry officials. “It is always a tit for tat in global economic diplomacy.”

Chidambaram, perhaps, hinted at just that to Brown in his talks with him last month, when he said new UK rules discriminate against Indian professionals.

The biggest bugbear to reform measures — the Left — actually helps in a way in this diplomatic tight-rope walking. The more vociferously the Left objects, the easier it is for the government to sell to foreign nations, as well as to Indian industry, any reforms that have been made after overcoming the Left opposition.

“The Left’s opposition to some of the measures cannot be written off. Yet from our dealings, we realise it is not an unreasonable political force. Measures, which do not hurt its constituencies, are allowed through and this helps. Our bargaining power at bilateral meetings actually increases because of Left opposition,” top North block officials said.

The Left opposition to opening up of retail has meant that allowing FDI in back-end operations can be sold as a major success to the West.

Similarly, the Left’s objections to allowing foreign control of Indian banks has given North Block more time to set in motion a move to consolidate and strengthen the state-run banking sector. This will be done so that the PSU banks can be on an even footing with foreign banks.