While the Rajya Sabha’s Parliamentary Standing Committee succeed in amending the RTI Act to keep political parties out of the RTI ambit, Anu Aga was only one voice of dissent in the Committee
Aam Aadmi Party’s stunning electoral success has to do with the brazenness with which all the national political parties were openly united to escape from the Right to Information (RTI) Act so that their donations from unknown sources, to the tune of Rs4,000 crore, can remain hidden from public scrutiny.
The Rajya Sabha’s Parliamentary Standing Committee, while supporting passage of the Amendment in the RTI Bill, has concluded that political parties should be kept out of the ambit of the Act as issues of financial transparency of these parties already exists in other laws.
The Right to Information (Amendment) Bill, 2013, introduced in Lok Sabha in August 2013, seeks to insert an explanation in Section 2 of the Act, which states that any association or body of individuals registered or recognised as political party under the Representation of the People Act, 1951, will not be considered a public authority.
The Committee in its report said, “The present amendment has been brought by the Government with a view to resolve the issue whether political parties are public authorities or not by specifically excluding them from the RTI Act so as to completely avoid the scope of ambiguity. The Committee considers that proposed amendment is a right step to address the issue once for all. Committee, therefore, recommends for passing of the Bill.”
Anu Aga, the nominated member of Parliament (MP) was the only to one to give a dissent note on the Committee Report. She said it is in the public interest of political parties to disclose information as the “parties are the most essential ingredient for the functioning of our democracy-they perform a public duty, they have a public function and they have a legal basis”.
Earlier, Attorney General of India, in his deposition, mentioned that if political parties are excluded from RTI, they are asking for privileged status. The report carries his observations thus: “Proposed amendment to RTI Act excluding Political Parties from the definition of public authority may not withstand constitutional challenge as it is creating a class within a class without having any consideration to the principle of intelligible differentia having reasonable nexus with objective of the Act (promotion of transparency and accountability).’’
As against this, the Secretary, The Department of Personnel & Training (DOPT), which is nodal Ministry for the Act submitted that “many non-governmental organizations (NGOs) declared as public authority in relation to RTI Act on the grounds of substantial financing by the appropriate government, by the judiciary.” He justified the amendment to the Act on the ground that possible political misuse of the Act by political rivals which would destabilise the political party which is not the objective of the Act.
The committee comprising big names like Ram Jethmalani and Dr Abhishek Manu Singhvi amongst other decided to back the DOPT’s submission.
Quite predictably, “All six national political parties except CPI, which were respondent to the CIC order of 3 June 2013 were categorical in their assertion that political parties are not public authority in relation to RTI Act.’’
The report states: “Department of Legal Affairs, in their reply to the questionnaire have submitted to the Committee that funding from Consolidated Fund of India / State is not the sole criterion to determine whether the body is substantially financed. Even financing in indirect manner i.e. grant of plot of land at concessional rate, tax exemption are also other criteria to declare a body as instrument of Government in relation to RTI Act.’’
Members of the civil society who deposed in front of the Committee strongly recommended the political parties to be in the RTI ambit. The report states: “The Committee gathers from the evidence submitted to the Committee that the larger view of the civil society is in opposition to the proposed amendment to RTI Act. They are of the view that information relating to financial matter of political parties need to be shared with public as bulk financing to political parties is under Rs20,000 which is not reported to Election Commission of India and Income Tax Authorities and is therefore unaccounted for. Some of the political parties have reportedly been in receipt of contributions from foreign sources in contravention of Section 29B of the Representation of People Act (RP Act), 1951 and corresponding provision in the Foreign Contribution (Regulation) Act, 2010.’’
MP Anu Aga stated in her dissent note that, “I consider political parties to be public authorities because they get substantive financial funding from the Government of India. For example: Allotment of land in prime areas of the national and state capitals at subsidised rates; Allotment of bungalows at highly subsidised rates; Free airtime on Doordarshan and All India Radio during Lok Sabha and State Assembly elections; Tax exemption on donations.”
Regarding the fear of the political parties about rivals procuring some critical information regarding their finances, Aga states in her dissent note that Section 8 (1)(d) of the RTI Act has already taken care of that. She writes: “there is concern among the political parties that if they come under the RTI Act their rivals will use RTI applications to get critical information and their strategies. However, under the Section 8(1)(d), there is no obligation for any public authority to give to citizen information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party".
Aga suggests that the Supreme Court or the Central Information Commission (CIC) could further clarify on this matter.
Noting that political parties are not at all transparent in their financial donations as more than 80% comes from unknown sources, she said, “There is currently very little transparency about the financial affairs of political parties. They are only required to submit expense reports to the Election Commission during elections, and income tax statements to the tax authorities. But more than 80% of their income is from ‘unknown’ sources, as was revealed in a recent RTI application. Their tax exempt status is contingent on their filing tax returns. But non-filing attracts no penalty, nor recovery of taxes. The Election Commission can register, but not de-register or penalize parties in any way.’’
Finally, Aga concluded that, “Most importantly if political parties are to play a critical role in improving governance, they themselves must submit to higher standards of transparency and accountability. It is of utmost importance that financing and expenses of parties be completely transparent.’’
Recommendation / Observations of Committee
• The Committee observes that the aspects of transparency of the financial matters of the political parties are fully covered under the laws and mechanisms as referred to above.
• The Committee understands that none of the six political parties, who happened to be respondent to CIC Order of 3rd June, 2013, challenged the order in the higher judiciary. That was an option with those political parties, which they did not exercise, as the instant case is a case of misinterpretation of a clear provision of law.
• The present amendment has been brought by the Government with a view to resolve the issue whether political parties are public authorities or not by specifically excluding them from the RTI Act so as to completely avoid the scope of ambiguity. The Committee considers that proposed amendment is a right step to address the issue once for all. Committee, therefore, recommends for passing of the Bill.
• In the course of deliberations, the Committee’s attention was drawn to the sustainability of legislation in the court of law. In this connection, Committee noted the suggestions made by Attorney General of India vis-a-vis Law Secretary. The Attorney General of India was apprehensive that this law would not sustain the test of judicial scrutiny as it was creating a class within a class without having any consideration to the principle of intelligible differentia having reasonable nexus with objective of the Act, whereas the Law Secretary was of the view that it was quite sustainable since Parliament has legislative competence to override the CIC decision. The Committee, however, subscribes to the opinion expressed by the Law Secretary.
• The Committee is of the strong view that laws should not be laid down through a process of misinterpretation of clear provisions of law.
Members of the committee:
Member, Rajya Sabha
1. Shri Shantaram Naik - Chairman
2. Ms Anu Aga
3. Shri Ram Jethmalani
4. Shri Sanjiv Kumar
5. Shri Parimal Nathwani
6. Shri Ram Vilas Paswan
7. Shri Sukhendu Sekhar Roy
8. Shri Ramchandra Prasad Singh
9. Dr Abhishek Manu Singhvi
10. Shri Bhupender Yadav
11. Maulana Badruddin Ajmal
12. Shri TR Baalu
13. Shri ET Mohammed Basheer
14. Shri NSV Chitthan
15. Shri PC Gaddigoudar
16. Shri DB Chandre Gowda
17. Shri Shailendra Kumar
18. Shri Jitender Singh Malik
19. Shri Arjun Meghwal
20. Shri Pinaki Misra
21. Shri Abhijit Mukherjee
22. Shri SS Ramasubbu
23. Shri S Semmalai
24. Shri SD "Shariq"
25. Smt Meena Singh
26. Shri Vijay Bahadur Singh
27. Dr Prabha Kishore Taviad
28. Shri Suresh Kashinath Taware
29. Shri Madhusudan Yadav
Shri Alok Kumar Chaterjee, Joint Secretary
Shri KP Singh, Director
Shri Ashok K Sahoo, Joint Director
Smt Niangkhannem Guite, Assistant Director
Smt Catherine John L, Assistant Director
(Vinita Deshmukh is consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)
With inflation expectations still on an upward arc and the RBI admitting that core CPI inflation is too high, today’s decision probably only delays the inevitable, says BNP Paribas in its research note
RBI (Reserve Bank of India) Governor Rajan sprang another surprise at his third meeting in charge by eschewing a further rate hike despite recent appalling inflation data, remarks BNP Paribas in a research note on the RBI policy announcement. The policy statement makes clear that today’s decision was a ‘close one’ and that further tightening is still forthcoming if inflation gauges do not show immediate improvement next month from November’s elevated readings.
With inflation expectations still on an upward arc and the central bank admitting that core CPI (consumer price index) inflation is too high, today’s delay probably only delays the inevitable and increases the risk of more aggressive tightening next year, warns BNP Paribas.
BNP Paribas criticises RBI policy by saying, “With GDP growth still under pressure given industrial production’s softness in October and still depressed survey indicators, the temptation is to try to look through the latest disruptive spike in food inflation and argue that a pull-back is simply a matter of time. Inflation is on the cusp of a decisive retreat to more acceptable levels.”
BNP Paribas points out that patience can be a virtue but prevarication is a vice, at least in the realm of monetary policy. By not tightening monetary policy, Governor Rajan is quickly succumbing to the admittedly complex web of pressures that bedevilled and ultimately undermined his predecessor’s stewardship, argues the research note.
The research note gives its own solution to the problems as, “Given the concerning trend in inflation expectations, not to mention the uncertainty facing India from a possible earlier than expected ‘tapering’ of asset purchases by the US Federal Reserve, today’s decision likely only delays the inevitable and impedes the long and painful process of re-anchoring inflation expectations and firmly establishing central bank credibility!”
The research note argues that Dr Rajan’s first two Policy Reviews had signalled a clear break with the past with RBI transitioning to a clearer, more hawkish reaction function. Today’s decision throws this into question.
In conclusion, BNP predicts, “We continue to target a 25bp rate hike either following the December inflation data released in mid-January or at the scheduled 28th January Policy Review. Our inflation forecasts suggest a further 25bp may be needed after that as well.”
BNP Paribas’ warnings on inflation and the need for firm action by RBI are clear from the following charts:
While keeping key rates unchanged, the RBI said given the wide bands of uncertainty and weak state of the economy there is merit in waiting for more data
The Reserve Bank of India (RBI), in its mid-quarter credit policy review has kept repo, reverse repo, cash reserve ratio (CRR) and bank rate unchanged. The central bank said the policy decision is a close one as current inflation is too high. "However, given the wide bands of uncertainty surrounding the short term path of inflation from its high current levels, and given the weak state of the economy, the inadvisability of overly reactive policy action, as well as the long lags with which monetary policy works, there is merit in waiting for more data to reduce uncertainty," RBI said in the policy statement.
According to RBI, there are obvious risks to waiting for more data, including the possibility that tapering of quantitative easing by the US Fed may disrupt external markets and that the Reserve Bank may be perceived to be soft on inflation.
"Even though the Reserve Bank maintains status quo today, it can help guide market expectations through a clearer description of its policy reaction function: if the expected softening of food inflation does not materialise and translate into a significant reduction in headline inflation in the next round of data releases, or if inflation excluding food and fuel does not fall, the Reserve Bank will act, including on off-policy dates if warranted, so that inflation expectations stabilise and an environment conducive to sustainable growth takes hold," the central bank said.
With no change in key policy rates, the repo rate (the rate at which the RBI lends money to banks) remains at 7.75%. Similarly reverse repo rate (the rate at which the RBI borrows from banks), CRR, and bank rate remains at 6.75%, 4.00% and 8.75%, respectively.
Reverse Repo Rate..........6.75%