IL&FS is NOT a Public Authoirity

[karira]

Recently, the CIC ruled that IL&FS is NOT a Public Authority.
The full decision is attached.

It is very interesting because this can be used in the future to decide whether subsidiaries of PA or companies/ventures where the PA holds shares is also a PA or not under the RTI Act.

The arguments put forward are interesting.

[karira]

As reported in deccanherald.com on 9 March 2008:
Deccan Herald - Minority stakes by govt bodies don't bring org under RTI: CIC

Minority stakes by govt bodies don't bring org under RTI: CIC

An organisation in which a minority stake is owned by a government-controlled body cannot be held accountable under the RTI Act as it is not funded by the government even "indirectly", the Central Information Commission (CIC) has held.

"It is common knowledge that government in its sovereign function creates a number of public authorities to engage in commercial and even profitable business activities.

"But when such public authorities, as part of their business activities, create other commercial bodies or gain stakes therein, it would not mean a direct or indirect involvement of the government," Information Commissioner A N Tiwari said in a recent order.

According to the RTI Act, an entity owned, controlled or substantially financed by the "appropriate government" would come under its ambit.

The CIC's ruling came while turning down an application of Bikaner-based Manoj Kumar Kamra seeking to bring financial advisory firm IL&FS within ambit of the RTI law.

Denial by IL&FS to comply with provisions of the transparency prompted Kamra to move before the statutory panel.

Submitting that certain government-controlled bodies had stakes in the company, the applicant claimed that IL&FS be made accountable under the information law.

Even as LIC, SBI, UTI and Central Bank of India together hold 43.84 per cent of the shares in IL&FS, the advisory firm argued that these stakeholders did not fall under the bracket of "appropriate government," and their financial stake in it were part of their business interests.

Concurring with the contentions of the IL&FS, Tiwari said, "business funding of a public authority created by an appropriate government will not qualify to be indirect funding by such government."

The CIC also stressed on the necessity to distinguish between government financing and business funding of public authorities.

It said that a minority equity participation by public authorities can not bring any entity under the transparency ambit.

Noting that for an entity to be made accountable under the said law, government's financing in the form of funds appropriated out of the financial budget or from funds allocated by ministries and government departments should be shown.

Disposing of the present application, the Commission acceded to the claim of IL&FS in seeking an exemption under the RTI law.