PublicationsCritique of the PM Cares Fund from the lens of Right to Information

Introduction

On 28^th March, the Central government instituted the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (“Fund”),[i] to facilitate donations for supporting the COVID relief operations in the country. In a matter of a few days, the amount of money deposited in the same was stated to be around 6,500 crores.[ii]  Several petitions were filed in the court, seeking information on the institution of the fund, contents of the trust deed, disbursal of funds, and the purposes for which it is being used. All these applications were dismissed stating that the fund did not come within the ambit of ‘public authority’ as defined in the Right to Information Act (“RTI Act”), 2005.[iii] The Prime Minister’s Office (“PMO”) also stated that whatever information was sought on the Fund could be retrieved from their respective website.[iv] However, the concerns that the Fund posits are manifold in India. This comprises its nature, creation and functioning, lack of auditing, and the type of contributions (voluntary or involuntary) it receives. Having received enormous donations, and yet remaining outside the ambit of the RTI Act, raises questions of transparency and accountability. On a closer look, the argument of the Fund not being a ‘public authority’ can be contested using both a form and substance approach. Further, the Fund’s operation demands transparency and accountability in its usage, in lines with the functioning of a democratic polity.

The article discusses several concerns regarding the operation of the Fund and the understanding of a ‘public authority’. The article has been divided into three parts. Part I will highlight the abuse of the legal ambiguity and lack of unanimity surrounding the understanding of a ‘public authority’. Part II of the reading establishes the need of covering the functioning of the Fund under the ambit of the RTI Act. Lastly, part III deals with the repercussions of the disclosed information on the operation of the Fund. Additionally, it provides recommendations to negate the problems arising out of such disclosures.

Public concerns related to the Fund

Establishing this Fund has raised several concerns amidst the public, regarding its operations and necessity. These concerns  have been discussed in this section:

• Existence of two corresponding Funds which collect donations

There already exists a fund for relief in national emergencies, namely the Prime Minister’s National Relief Fund (“PMNRF”).[v] This was instituted in the year 1985 to use funds from donations for relief purposes.[vi] While this remains in existence, the government has constituted another fund, the Fund, for the current Covid-19 crisis.[vii] The access to and receipt of the information on the operation and constitution of the present Fund would give clarity as to the difference between the two funds and the necessity of instituting a new fund for the current pandemic. However, the government’s official statement regarding the institution of this Fund lies on the need for a special Fund for disbursing money for COVID-related purposes alone. This seems unnecessary since the institution of PMNRF includes all kinds of natural disasters.[viii] The creation of different Funds for different purposes is a futile activity. Firstly, it would create public confusion on their stated purposes when they have been instituted for similar emergency uses with similar objectives and compositions. Secondly, it would increase the possibilities of mismanagement, corruption, and lapses in case there isn’t a proper mechanism to oversee its functioning and the disbursal of money from them. Thirdly, if multiple funds with huge sums of money continue to be outside the ambit of the RTI Act, it would be an anachronistic feature within a democratic society. This would spread public grievances due to the absence of public transparency and scrutiny. Having a single, consolidated fund to meet all kinds of emergency needs would eliminate several apprehensions people have regarding the misuse of funds by the government. This is because monitoring one fund while being less cumbersome also doesn’t demand rigorous public scrutiny that the existence of many funds would demand. Tracking and tracing the disbursal of money by the government from a single fund is easier to question and inspect than having to do so when there are multiple such funds.

• Lack of information on the website

It is seen that the government has responded by asking[ix] the enquiring citizens to procure information on the fund through its official website.[x] The website provides limited information and does not provide answers to all the queries that one could seek through an RTI application if the Fund is considered a ‘public authority’.[xi] The lack of information to the public on the main trust deed and the rules and regulations in place to govern the functioning of this Fund, make it opaque in nature.[xii]

• No auditing of the Fund by the Comptroller and Auditor General (“CAG”)

There has been an appointment of an Independent auditor[xiii] to audit the Fund. The government states that the same work cannot be undertaken by the CAG due to the purpose behind the Fund being of ‘public charitable nature’.[xiv]This could bring in a concern of lack of sufficient checks on the use of the Fund due to there being only a single auditor who could be prone to succumbing to the pressures and dictates of the government.

• Voluntary or involuntary contributions to the Fund

There have been recent allegations of private/public sector employers directing certain portions of their employee’s salary towards a contribution to the newly created Fund. The very idea of donations being voluntary contributions gets defeated when it is clandestinely imposed on those in an unequal bargaining power within the workplace. A donation is one that is done with consent and will of the donor to the beneficiary. By diverting amounts from the employee’s salaries, employers are defeating the very concept behind donations as well as denying the total salary due to their employees in a crisis. For instance, the Railways, a Public Sector Undertaking (“PSU”) has contributed 151 Cr. rupees to the Fund, when the same department did not incur expenses in helping the migrants return home once the lockdown was declared.[xv] Another instance is that of the Reliance Group failing to pay their regular employees their salaries while making donations to the Fund.[xvi]

• Treatment of donations under various laws in India

Donations made by corporates to this Fund are treated as tax-free and accommodated within the ambit of their Corporate Social Responsibility (“CSR”) obligations.[xvii] The corporates get the benefit of making tax-free contributions in the process of fulfilling their mandated duties. This has been done by the promulgation of an ordinance that permits 100% exemption on donations made to funds including the Fund up to 30^th June 2020 as under section 80G.[xviii] This violates former guidelines stating that CSR should not be used to fund government schemes due to its double benefit of tax exemptions being a regressive incentive.[xix] It is also important to question the need to provide this 100% exemption to contributions made by corporates as there is a possibility of corporates misusing the tax benefit by donating black/ unaccounted money into the Fund while discharging their social responsibilities.

• The understanding of ‘public authority’ as per the Aseem Takyar[xx] case

The issue deliberated upon in the Aseem Takyar,[xxi] a case before the Delhi High Court (“HC”) was regarding the nature of the PMNRF and the applicability of the RTI Act to it. The case was considered by a division bench comprising Justice R. Bhat and Justice S. Gaur and is pending before a larger bench for further deliberation and a final decision on the matter.  The difference of opinion was based on the understanding of a ‘public authority’ as per the second part of the definition under section 2(h) (i) to (ii) of the RTI Act. In the case, Justice Bhat proposed a liberal and inclusive interpretation of the term ‘public authority’. He did this by keeping in mind the important functions carried out by bodies that are similar to those carried out by public authorities.[xxii] In his opinion, the management and disbursal of the Fund being done with the direction and discretion of the Prime Minister (“PM”) in the case of the PMNRF were sufficient enough to establish it as a ‘public authority’.[xxiii] These decisions taken by people handling the PMNRF would constitute official decisions and cannot be done in a personal capacity. Justice Gaur, the dissenting judge, took a more narrow approach and opposed the idea of the PMNRF being considered as a ‘public authority’ on many grounds. [xxiv]One of them was regarding the presence of several delegates apart from government functionaries to manage the PMNRF. He also saw the functioning of the PMNRF involving ‘supervision’ than ‘control’ being exercised over it. Another opposition was based on the voluntary contributions (charitable nature) made to the PMNRF. In his view, the lack of contributions flowing out of budgetary sources of government or from the balance sheets of the PSUs, indicated that the PMNRF was not a ‘public authority’.

We see that the present government has abused this lack of unanimity and the pending legal determination on what constitutes a ‘public authority’. It has created the Fund, a body that functions as a ‘public authority’ but disguises itself from accountability using the legal ambiguity on what constitutes a ‘public authority’. However, using the legal principles enunciated in the above-mentioned case, if one were to condense these principles into the form and substance approach to understand whether the Fund is a ‘public authority’, the two approaches would stand satisfied as seen below.

Ascertaining the Fund as a ‘public authority’ using a form and substance approach

• Form Approach

The creation of the fund with its name, emblem, composition, and government domain name resembles a ‘public authority’, using the form approach.[xxv]   The name of the Fund, ‘PM CARES Fund’, signifies its likely nature of being ‘public’ due to its intentional linkage with the PMO. The emblem of the Fund is the same as that on other recognised public authorities such as the Planning Commission (“PC”) and the Unique Identification Authority of India (“UIDAI”). The emblem represents the adaptation of the Ashokan pillar with the adage ‘satyameva jayate’.[xxvi] Its composition is similar to that of the PMNRF with the PM as the ex-officio Chairperson of the management of the Fund and other key ministers (Home minister, Defence, and Finance minister) as ex-officio trustees. The public nature of the Fund can further be ascertained by the huge donations received which, establishes the fact that people have faith in the efficient functioning of this Fund due to it being connected with the reputation lent by the PMO.[xxvii]The domain name of the website being ‘.gov.in’ as provided for other public authorities, also clearly proves the likeliness of the Fund being a ‘public authority’.[xxviii]

Moreover, the form or manner of creating the Fund can also be traced to a press note released by the PM in his appeal to the public via the Press Information Bureau (“PBI”). This supports the view of the Fund as an authority or body established by ‘notification issued’ by the government.[xxix] If this being a government notification is contested, then the trust deed by way of which the Fund was birthed should possibly suffice.[xxx]

• Substance Approach

The term ‘public authority’ is defined under section 2(h) of the RTI Act, 2005. The first part of the definition (sec 2 (h) (a) to (d)) is explicit and clear in defining what constitutes a ‘public authority’, while the second part (sec 2 (h) (i) to (ii)) is broader in its ambit. It is the second part of the definition that is of concern to us on the question of the nature of the Fund. The second part serves to be inclusive nature by permitting any kind of body ‘owned, controlled, or substantially financed’, and any non-governmental body substantially financed by the appropriate government, to be considered as a ‘public authority’. The Delhi HC has also unambiguously supported this understanding of the second part in the definition.[xxxi] Section 2(h) thus stands inclusive in nature and ‘includes’[xxxii] any authority either owned, controlled or funded substantially by the government. However, this part of the definition continues to be the subject of several controversies considering the unaddressed ambiguities it leaves on what constitutes (a) ownership, (b) control, or/and (c) substantial financing.

While complete ownership of the Fund by the government may be dubious, its composition as stated above signifies that the Fund can be said to be ‘controlled’ by the government. This is because it is headed by the Prime Minister, acting as the ex-officio Chairperson and other ministers, acting as ex-officio trustees. As of now, there exists no proper clarification as to the decision-making process among Trustees inter-se.[xxxiii] This overseeing of the functioning of the Fund by people in high positions tells us that the nature and extent of powers remain with the Union Executive. This must not be reduced to mere regulation or supervision due to this not being the same as control.[xxxiv]

Even if the criteria of being ‘controlled’ is possibly contested, the Fund can also be seen as a non-governmental organization that is ‘substantially funded’ directly or indirectly by funds provided by the appropriate government.^[xxxv]This is because donations are being made by PSUs and central public sector enterprises and companies such as Oil and Natural Gas Corporation (“ONGC”) and Bharat Petroleum (“BP”).[xxxvi] However, the courts have still not come to a definite conclusion on what form or quantum of the donated funds meets the criteria of ‘substantially funded’ as required to ascertain the nature of a body.[xxxvii]  The lack of judicial unanimity must be used to our advantage to expand the scope of a ‘public authority’ to those bodies that use legal ambiguities to continue operation without having to be answerable

Another criterion used to determine the nature of the body is by analysing the activities undertaken by it. The definition in the Act does not explicitly state that the nature of the functions performed by a body ought to be a criterion in determining whether or not it can be defined as a ‘public authority’, yet the courts have taken this approach in broadening the determination of a ‘public authority’.[xxxviii] Considering the relief activities carried out by the Fund for the public, we can safely state that this criterion as well would be satisfied.

Words such as ‘control’ and ‘substantial financing’ must be given a liberal interpretation to widen the ambit of the RTI Act. This would help in covering a variety of entities within the definition of ‘public authority’. With the applications filed for further information on the Fund and the same being dismissed, concerns of transparency and accountability are sure to arise. In fact, by continuing to keep the Fund outside the RTI Act, blatant violations of key principles in a democratic polity will take place due to the population being uninformed on the functioning and usage of this Fund.

Right to information in a democracy and the need to bring the Fund within the ambit of the RTI Act, 2005

In a democracy, the ultimate power wields with the people. To be part of a democratic system and one that is indirect and representative in nature requires the significant feature of participation of the populace. The people have the right to participate in their governance by having access to information on various issues that pertain to the country. In order to safeguard the right to participate in the affairs of the government, the ‘right to be informed and access information’, is also one that is internationally recognised as a human right.[xxxix] While being enshrined in the Universal Declaration of Human Rights (“UDHR”) it has also become a legally binding obligation due to its provision under article 19 of the International Covenant on Civil and Political Rights (“ICCPR”).[xl] This has made it a fundamental right under the universal Human Rights (“HR”) regime.[xli] It has been agreed by the heads of the government of the commonwealth that the ‘right to information’ is one of the most sought after objective among other goals.[xlii]

In India, the RTI Act, 2005, is seen as one of the most progressive legislation in the country. It serves as an access law[xliii] and allows us to exercise our right to participate in the governance of the country.[xliv] Through the exercise of this statutory right, one can have an informed opinion and ensure that the government, its officials, and agencies remain accountable to the people. In addition to this, though the Constitution of India does not specifically mention the right to information, courts have read this right into the right to freedom of speech and expression or freedom of thought.[xlv]This right is important as it serves as a check on the misuse and abuse of power and as an anti-corruption tool on possible corrupt practices that could take place. It does so by allowing citizens to ask public authorities[xlvi] for information in addition to imposing penalties on them for failing to disclose information defined in section 2(f). The RTI Act also requires every ‘public authority’ to proactively disclose information about it, and maintain its documents and records to facilitate the right to information under the Act.[xlvii] The right to information can thus act as a deterrent against corruption and abuse of power. This helps in promoting democratic practices and national stability[xlviii] as open communication systems instil confidence and faith in the populace, weakening feelings of alienation from the government.

Bringing the Fund within the ambit of RTI is in harmony with the guidelines prescribed by the International Monetary Fund (“IMF”), World Bank (“WB”) and Transparency International (“TI”) for maintaining accountability standards during the present pandemic[xlix]. The right to know the functioning of a fund instituted by the government has also been recognised as an important means of holding the government accountable in other jurisdictions.[l]By denying the applicability of the RTI Act to the former PMNRF and subsequently to the present Fund recently, the Supreme Court (“SC”) has overlooked the purpose for which the Act came into being; namely, the ability of the populace to access information from any ‘public authority’. While the judiciary uses the justification of ‘judicial deference to the executive’[li] for its decisions, it has, unfortunately, disregarded the exercise of the above stated democratic right.[lii]  The Fund has an important function to discharge during this crisis and the non-disclosure of details generates misgivings regarding its usage for its intended purpose. This has been discussed above in the section on ‘public concerns’ with respect to the operation of the Fund. The requirement of institutional transparency is so essential in the functioning of the Fund considering the huge donations being made and the lack of information on the purposes for which funds are being disbursed. The only way of ensuring institutional transparency is by allowing public access to complete information. This can only be achieved by recognising the nature of the Fund as a ‘public authority’ and consequently facilitating the application of the RTI Act on it. Once this is done, disclosure of information can be sought. Seeking disclosure is the only way to hold the government accountable and we need the unrestrained exercise of this right which will allow us to question or clarify any deviation from the stated purpose. By exercising these democratic rights of participation, a consequence would be a deterrent on possible corrupt and dishonest practices if the officials know that their actions are open to the public and can be questioned at any stage.[liii] Thus, the right will essentially serve as a weapon to keep the government answerable and its actions in check.

Further, possible oppositions (if any) to the disclosure can be countered using section 8 and section 11 of the RTI Act. Section 8 enables an exemption to non-disclosure if it concerns ‘public interest’. This means that personal information can be released into the public domain if it is related to public activity and come within the interest of the public. The access to information in this case easily meets the criteria of ‘public interest’ as it ensures the upholding of essential democratic values such as participation by informed people, scrutiny, and accountability of the government. It is also a way of enabling good governance in a country. This issue becomes all the more relevant considering the allegations the ruling party has made concerning the PMNRF, and several dubious contributions being made in return for political favours.[liv]Even a claim of against disclosure of information due to the existence of a possible fiduciary relationship will not hold ground. This is because of neither the donors nor the beneficiaries repose trust in the Fund[lv] as seen in fiduciary relationships. Moreover, an act of charity cannot be said to sufficiently create a fiduciary relationship. Further, a claim of prevention of disclosure due to violation of the right to privacy will also not hold good as once the donations are made, the same is put into ‘public record’. The confidentiality ceases to exist once the donations are made and the PM uses his right to determine the class/classes of beneficiaries[lvi]. If there are issues of violation of privacy brought up, the same can be contested by the concerned third party under section 11.[lvii] The Fund, thus, can rightly be open to public scrutiny, despite possible legal challenges to the same.

Conclusion

Despite the complexities and legal ambiguities surrounding the definition of a ‘public authority’, it remains a central factor in definitively bringing a body under the RTI Act. Condensing the legal principles into a form and substance approach, we see that the Fund fulfils the same and can be considered as a ‘public authority’. It is important to adopt this liberal and broader approach to the term ‘public authority’ to prevent the misuse of the legal ambiguity surrounding it. Further, to avoid accountability and transparency by the government. To facilitate the democratic values of accountability and transparency in the operation of the Fund, we require the applicability of the RTI to it, by virtue of it being a public authority. This will enable the citizenry to exercise their rights to gain information from these authorities and ensure that they remain accountable to them. Further any possible legal claims against disclosure can be tackled using ‘public interest’ under section 8 of the RTI Act. Similarly, in case the violation of the right to privacy is being raised, the claimants can rightly seek relief through the legal provision of section 11 within the RTI Act itself. Enabling this unrestricted right to information from the Fund will essentially serve as a weapon to keep the government answerable and promote transparency which is in line with the democratic practice of the populace participating in the national affairs of the country.

REFERENCES-

Tasha Bluewin Joseph

Affiliation: Jindal Global Law School

Year: Graduated