Citizens' Issues
Do private organisations come under the purview of RTI?

While the RTI Act states that only those private organisations which have “substantial” funding from the government come under the purview of the RTI Act, in cases where these entities are in partnership with the government, it is possible to get necessary information. The Pune-Mumbai Expressway toll matter is a sterling example

With municipal corporations, state and central governments increasingly opting for Public Private Partnerships (PPP), transparency could take a beating, as private organisations have been given an opportunity to duck under the Right to Information (RTI) Act. The Act says that only if private organisations are "substantially" funded then they come under the purview of public domain. Who's to decide what is "substantial funding"? And here's where private bodies take cover and refuse to give information.

A sterling case is that of the Ideal Road Builders (IRB), a private agency which collects toll fees from most of the highways in Maharashtra, including the Pune-Mumbai Expressway. It is impossible to procure information regarding the data of toll collection. However, in such cases, since their partnership is with a government body, the citizen can get access to such information from the government organisation.

Strangely, the Maharashtra State Road Development Corporation (MSRDC), the government body in this case which is mandated to monitor whether IRB is collecting toll honestly or is cheating people, itself has not monitored the revenues of the IRB, despite appointing an independent engineering consultant, STUP Consultants Pvt Ltd, headed by RY Deshpande. However, thanks to citizens demanding this information under RTI, the MSRDC was compelled to request the IRB to send the data of toll collection, year-wise. When this writer conducted inspection of files under Section 4, one of the officials confessed that they had only recently asked the IRB to supply information due to pressure of RTI queries, otherwise they had nothing to do with the information. The fact is that it is binding on the MSRDC to do proper auditing of the toll revenue collected by IRB and gauge whether it is usurping more profits than what it is supposed to get.

Similarly, Metros that are being "forced" upon citizens in several towns and cities across the country, without proper planning, are mostly constructed by the Delhi Metro Rail Corporation (DMRC). Here too, the DMRC is a private body and any query under RTI is denied. In the case of the Pune Metro, the DMRC has disastrously planned the metro and submitted a shoddy and superficial Detailed Project Report (DPR). Despite the project report not satisfying the Pune Municipal Corporation's (PMC) terms of reference and it not abiding by the central government guidelines while making the DPR, the PMC's general body and the administration has blindly passed the project. It now lies with the state government, which failed to allot finance for it in the current budget. The scandal of this Rs10,000-odd crore infrastructure that is going to add to the chaos of the already congested roads in Pune and become a heavy tax burden for citizens for many years, came to light due to the RTI invoked at the PMC. Thus, in private-public partnerships one can get access to public documents by putting a query to the 'public partner'.

However, as per a high court judgment, co-operative banks do not come under the RTI. A few years back, the Reserve Bank of India (RBI) declared that co-operative banks do not come under the purview of the RTI Act. At that time, the Gujarat State Cooperative Bank Ltd, which is an apex institute of co-operative banks, had sought the opinion of the RBI. The RBI stated that since co-operative banks come under the Co-operative Act of the respective states and not under any parliamentary statute, they are not public authorities as defined by the Act.

According to Shailesh Gandhi, central information commissioner, the Company Law gives significant rights to those who own 26% of the shares in a company. Perhaps this could be taken to define the criterion of "substantial finance".

"Subclause d(i) and (ii) together mean any non-government organisations which are substantially owned, controlled or financed directly or indirectly by the government would be covered. Thus aided schools and colleges are public authorities, as also any trusts or NGOs which have significant government nominees; or companies where the government either owns substantial stake, or has given substantial finance, are directly covered under the RTI Act. The substantial finance can take into account tax incentives, subsidies and other concessions as well.

Elaborating further, Mr Gandhi states, "There is some confusion about the words owned and substantial finance. This confusion is evident in the various decisions of the information commissions. Let us look at the words carefully. "Public authority" means any authority or body or institution of self-government established or constituted, … and includes any

(i) body owned, controlled or substantially financed;

(ii) non-government organisation substantially financed, directly or indirectly by funds provided by the appropriate government."

The finance could be either as investment, or towards expenses, or both. The way in which the words have been placed, indicates that perhaps (i) relates to investments and (ii) relates to the running expenses.

"Thus every institution which is owned by the government is clearly covered. By any norms, whenever over 50% of the investment in a body lies with any entity, it is said to be owned by that entity. Since bodies owned by government have been mentioned separately, the words 'controlled' and 'substantially financed' will have to be assigned some meaning not covered by ownership. Thus it is evident that the intention of Parliament is to extend the scope of the right to other organisations, which are not owned by it. No words in an Act can be considered to be superfluous, unless the contradiction is so much as to render a significant part meaningless, or it violates the preamble. Therefore, it becomes necessary to consider a situation where an entity may be controlled by the government without ownership or substantial finance. Such a situation exists when a charity commissioner or registrar of societies appoints an administrator to run the affairs of a trust or society, or a court liquidator takes over administration of some body.

Thus concludes Mr Gandhi: "It is therefore obvious that as per Section 2 (h) (i) 'a body …substantially financed' would be a body where the ownership may not lie with the government, nor the control. Hence, clearly the wording 'substantially financed' would have to be given meaning at less than 50% holding. Company law gives significant rights to those who own 26% of the shares in a company. Perhaps, this could be taken to define the criterion of 'substantially financed'. The finance could be as equity, or subsidies in land or concessions in taxation.

"Similarly some definition is required where the State provides money for the running expenses of an institution as covered under (ii). Presently, aided schools and colleges have all clearly been accepted as 'public authorities', though there appears to be no clarity in the matter of NGOs and other organisations which are receiving significant amounts of finance.

"The key approach and philosophy of the RTI Act appears to be that since the State acts on behalf of the citizens, wherever the State gives money, the citizen has a right to know. In my opinion, if the money given for the running expenses is over either 20% of the running expenses, or Rs1 crore, the body should be considered as receiving 'substantial finance' and is covered in the definition of a 'public authority'."
Putting up information in the public domain, especially where infrastructure is concerned, is very important in the case of roads. The Economic Survey of India estimates that over the next five years (the survey was of February 2008) the investment needs in physical infrastructure will be $500 billion, out of which the share of the private sector will be $150 billion-odd, which comes to over 30%.

It is time to know the truth, as the truth involves us all!

(Vinita Deshmukh is a senior editor, author and convener of Pune Metro Jagruti Abhiyaan. She can be reached at [email protected].)




Vijesh Kaushik

5 years ago

What are the Rate of Interest for Crane, Hydra of M/Ssrei Equipments Finance Co. Ltd.


6 years ago

It is stated in the article "However, as per a high court judgment, co-operative banks do not come under the RTI. A few years back, the Reserve Bank of India (RBI) declared that co-operative banks do not come under the purview of the RTI Act. At that time, the Gujarat State Cooperative Bank Ltd, which is an apex institute of co-operative banks, had sought the opinion of the RBI. The RBI stated that since co-operative banks come under the Co-operative Act of the respective states and not under any parliamentary statute, they are not public authorities as defined by the Act. "

In this connection I have to submit as under:

1) as per sec. 2(h)(c) RTI Act 2005 public authority could be one which s established or constituted by any other law made by State legislature.

2) As per the said act it is only CIC or SIC can ecide whether a particular entity is a public authority or not under RTI act. RBI, to my mind does not have any authority to give such opinion. One has to approach CIC/SIC for this.

Indian shares likely to open on a cautious note: Wednesday Market Preview

Economies across the world are focussing at rate-tightening measures to curb spending in a bid to bring down inflation

The local market is likely to see a cautious opening on fluctuating global markets. Wall Street closed mixed for the second day amid speculations that the Federal Reserve might begin withdrawing stimulus initiatives in the wake of an overall strength in the economy. Bank of China’s rate hike, after the regional bourses closed yesterday, spooked stock markets across the region, as a result of which key indices in the region were mixed in early trade on Wednesday. The SGX Nifty gained 8.50 points at 5,934.50 from its previous close of 5,926.  

The market opened flat on Tuesday on the back of mixed cues from the global arena. The Sensex was up 29 points at 19,731 at the opening and the Nifty gained 16 points at 5,924. The indices scaled the day's high in the first few minutes of trading with the Sensex at 19,770 and the Nifty at 5,929. However, the market could not sustain the gains and slipped into the red thereafter on profit booking. Amid sharp volatility, the indices made a feeble attempt to push into positive territory in mid-morning trade, but sellers had strong control and ensured that the market stayed in the red.

Trading remained range-bound in the noon session, with the benchmarks touching the day's lows at around 12.40pm. Erasing most of the gains accrued yesterday, the Sensex tanked 179 points to 19,524 and the Nifty was down 52 points at 5,856 at the intra-day lows. The indices crawled into the green for a brief moment in the last half hour, but soon slipped and closed almost unchanged, albeit with a mixed bias. The Sensex ended 15 points lower at 19,687 and the Nifty settled two points up at 5,910.

Markets in the US closed mixed for the second day on speculations that the Fed might begin withdrawing stimulus measures in the wake of a gradual rebound in the economy. The biggest component on the Nasdaq 100, Apple Inc’s saw a cut in its weightage, resulting in the stock falling 0.7% in trade. Marketmen viewed the index rebalancing as a positive for other major technology stocks such as Microsoft, which gained 0.9% and Cisco Systems, which added 0.9%.

Meanwhile, the US House Republicans on Tuesday unveiled a plan to overhaul the federal budget and slash the deficit in coming years by about three-quarters, with a $6 trillion cut in spending and 25% cap on tax rates.

The Dow fell 6.13 points (0.05%) to close at 12,393.90. The S&P 500 shed 0.24 of a point (0.02%) to 1,332.63 and the Nasdaq added two points (0.07%) to 2,791.19.

Markets in Asia were mixed in early trade today following a rate hike by the Chinese central bank, the fourth time since October, in a bid to curb rising prices. Benchmark one-year deposit rates will be raised by 25 basis points to 3.25% and one-year lending rates will be hiked by 25 basis points to 6.31%. The increase takes effect from 6th April.
Speculations that the US Fed implementing controls on interest rates also weighed on investors in the region.

The Shanghai Composite gained 0.45%, the Hang Seng rose 0.06%, the Straits Times added 0.01% and the Taiwan Weighted surged 1.17%. On the other hand, the Jakarta Composite declined 0.21%, the KLSE Composite fell 0.17%, the Nikkei 225 was down 0.21% and the Seoul Composite shed 0.07%.

Brent crude jumped to a two and half year peak above $122 a barrel on Tuesday, gaining for a fourth straight day. Brent crude for May rose $1.16 to settle at $122.22 a barrel after reaching $122.89, the highest front-month price since August 2008.

US crude for May delivery fell 13 cents to settle at $108.34, off Monday's $108.78 intraday peak, which was the highest since September 2008.

Back home, Reserve Bank of India deputy governor Subir Gokarn on Tuesday said high inflation in India, previously considered unacceptable, should not be accepted as “the new normal” and the central bank cannot afford to drop its guard. The central bank has raised interest rates eight times since March 2010, with more rises expected, but headline inflation still topped expectations at 8.31% in February.

Mr Gokarn said high growth—the economy is expected to have expanded by 8.6% in the year that ended in March—was contributing to high inflation.


Ashok Soota announces new business venture—Happiest Minds

Mr Soota, who left MindTree on 1st April, told the media that he envisioned Happiest Minds achieving $100 million worth of sales within five fiscal years of operations and to be a full services firm with a global presence

Bangalore: Former MindTree chairman Ashok Soota today announced the establishment of his new business company, 'Happiest Minds Technologies Private Limited', reports PTI.

Mr Soota, who left the company he co-founded on 1st April, told the media that he envisioned Happiest Minds achieving $100 million worth of sales within five fiscal years of operations and to be a full services firm with a global presence.

Happiest Minds, expected to be formally launched for customer delivery in five months, would have six lines of businesses, namely IT services, R&D services, product engineering services, remote infrastructure management, testing and consulting.

"Happiest Minds will focus on new emerging technologies like cloud, social CRM, unified communications, mobility, business intelligence and analytics," he said.

Mr Soota said he was in touch with two venture capitalists to fund the business, but had sufficient funds for the next three months to fund it himself.

Mr Soota on Tuesday reiterated that he doesn't have a non-compete or non-solicit agreement with MindTree.

He also expects to soon partially divest his 11.1% stake in MindTree, valued at Rs1,600 crore. "There was no burning need to divest stake in MindTree right now. I will divest my stake in due course."

He also said the funding would perhaps be higher than any typical start-up in the IT services space.

"Happiest Minds expects to rapidly establish itself as a global player. It will open offices in various cities of the US, Continental Europe, UK, Japan, Singapore and India."

The new company will have marketing offices in Delhi and Mumbai, apart from Bangalore. A Chennai-based marketing agency had been roped to work out the modalities, he said.

Asked if he was in talks with any MindTree co-founder or senior management from Wipro, where he worked as CEO, he said" "I am not in conversation with anyone."

The process of team building begins from today," he said, adding he expects all those interested in being part of the team to reach him following the announcement.

Being a late entrepreneur, he said he expects to bring his vast experience and expertise to the table.

Refusing to draw parallels between MindTree and his venture or on the reasons leading to his exit, he said the word 'Mind' in his former company and new venture was coincidental. "Our bid is to create a niche company and such a company should have multiple service lines. Any other comparison is, I think, only coincidental," he said.

Mr Soota said he plans to list his new venture in due course.

He said his company would be looking at large corporations and medium and small enterprises. "India will be an important market and we expect 10% to 12% of business from within the country. But I feel US will bring us majority of revenue," he said.


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