Lokpal And The Furore Over Invasive Data Collection Method

In the last sequence of Raiders of the Lost Ark, an employee trundles a cart with the ark nailed inside a wooden box into the cavern of a giant government warehouse from where it will never emerge. Giant databases, despite their attractions, behave like that warehouse. And that could very much be the fate of the gargantuan exercise begun to track the assets of civil society organisations and government employees under the Lokpal and Lokayuktas Act 2013 with a deadline of 31 July for all the data to be in. It just doesn’t work in a government set up.

It’s one of the lessons to fall back on in the current controversy.

The Lokpal and Lokayuktas Act was drafted in the wake of the convulsive protests against perceived corruption within government that rocked India through 2011 and 2012. Passed by the second United Progressive Alliance government in a stormy parliament session, the act aims to punish corruption by “public servants”. Who are these public servants? The Prevention of Corruption Act, 1988 defines all government employees as public servants. The act imported this definition and broadened it to include the prime minister and his council of ministers at the centre and the chief minister and his council of ministers in the states.

To ensure that the private sector was also brought within its scope, the act extended the definition through long legalese to include just about anybody who holds any post in an entity “wholly or partly financed by the central government or controlled by it”. So a public-private partnership would come under the ambit of the act. Interestingly, some of the very civil society organisations which had backed the passage of the act, have now realised with a shock that the same omnibus definitions under 14 (1) (f) could also be used to hold them accountable, for the financial support they draw from government bodies.

Not all of them, though. In the next sub clause, 14(1)(g), the act offers a threshold limit based on the annual income of the entities. Those above this threshold will be counted as among those whose office-bearers are to be treated as public servants. It has been left to the central government to decide this threshold through a notification. The current government issued this notification on 26 June, setting the minimum annual income limit at Rs one crore for domestically-funded entities. For those which get foreign funding the threshold of Rs 10 lakh is specified in the act itself 14(1)(h).

Essentially, it means that all civil society organisations with any reasonable degree of operation funded by the government or from abroad have to spell out a lot of data on the assets and liabilities of each one of its employees right up to their board members, to the government. It will include their property holdings, that of their “significant other” and their children and even those held by their parents if they are dependant.

The pattern is roughly similar to what all government employees write down every year. That data is put up on the websites of respective departments. A similar treatment is on the anvil for civil society too. They could earn a reprieve if an amendment proposed by a parliamentary standing committee goes through. The committee has suggested that the information should be kept by the “Lokpal… in a fiduciary capacity… In light of such double scrutiny, the committee recommends that public disclosure of such assets and liabilities would not be necessary”. But that is for the future. As things stand, the data has to be up there for public display, so those affected want the courts to block it.

There is clearly a problem with the way the act was drafted. It was pointed out by commentators earlier too but those had no chance of being heard during the almighty roar for its passage in 2013. As a Business Standard editorial points out, there are lots of smart ways through which such data is already being collected so the proposed exercise could mostly be superfluous. One of those is the current Reserve Bank of India’s ‘know your customer’ norms. Some of those norms will get stricter from next year as the regulator mandates that all non-banking financial companies and micro-lending organisations must furnish even more detailed information which will be updated regularly.

Meanwhile, even as there is a blowback against the centre for this invasive data collection method, in states like West Bengal the auditor is learnt to be advising for more detailed data collection of entities which get government support. In Delhi, the state government has begun to audit all private schools which have asked for fee hike. The range of information being sought is quite invasive. Bad habits are obviously contagious.

Incidentally, one of the stand-out successes of the current central government has been in the allocation of natural resources. For two decades, the earlier governments have been marshalling massive data on the coal mining companies including their corporate pay, ownership etc. Those mega trunks of data led to the coal scam. A rule-based transparent system which has replaced it has instead done wonders for the sector.

As an Organisation of Economic Cooperation and Development report of 2013 on anti-corruption models points out, developed and developing countries have tried to set up anti-corruption watchdogs since the 1950s. The two grand successes come from Singapore and in Hong Kong. Both were built around the rule of law and enforcement of “basic checks and balances in the administration”, not build up of data that disappears into warehouses.