PM Relief Fund Gets Unused Electoral Bond Funds, Escapes RTI: Why?

Why Prime Minister National Relief Fund doesn’t come under RTI when it is getting not encashed electoral bonds fund?

(Image: Erum Gour/ The Quint)

The Prime Minister’s National Relief Fund (PMNRF) website states “PMNRF accepts only voluntary contributions by individuals and institutions. Contributions flowing out of budgetary sources of Government or from the balance sheets of public sector undertakings are not accepted.”

It also states that, “The (PMNRF) fund is recognised as a Trust under the Income Tax Act and the same is managed by Prime Minister or multiple delegates for national causes. Disbursements are made with the approval of the Prime Minister”.

Interestingly, the PMNRF also receives money that accrues from non-encashed electoral bonds sold by the State Bank of India (SBI) to political donors. Money from non-enchased bonds is transferred to PMNRF after every phase. So far electoral bonds have been sold in 13 phases. As per an RTI reply, the PMNRF has received over Rs 20 crore from SBI as the amount accrued from the non-encashed electoral bonds.

But first, why were some electoral bonds sold by the bank not encashed? There could be two possible reasons:

• One, the political donor purchased the bond but did not give it to any political party. The reasons could be many. For instance, the purchaser failed to give the bond to the political party before it got expired or the purchaser changed his/her mind.
• Two, the political donor gave the electoral bond to a political party but party did not encash it within the stipulated 15 days. Which means, the bond expired. In such cases the money doesn't revert to the donor. The govt notification says, “Electoral Bonds shall be issued to the Purchaser on non-refundable basis.”

Section 12 of the notification issued by the Ministry of Finance about Electoral Bonds in January 2018 states that PMNRF will receive the amount accumulated due to non-encashment of electoral bonds -

But the notification does not explain why the PMNRF would get the money from the non-encashed bonds, especially since the PMNRF is a trust and accepts only voluntary donations. Legal experts says that this creates a conflict

“When there is a specific direction issued from the government for utilising the money accumulated from non-encashed electoral bonds in a specific way, it means government has control over this money and it has become its vested interest, once the time limit for encashment is over. So there is merit in saying that such money is in effect government money.”

Prasanna S, Senior Lawyer

Why Shouldn’t PMNRF Come Under RTI?

The Electoral Bonds scheme was introduced by the BJP led government in 2018 to maintain the anonymity of political donors. The State Bank of India is the authorised bank to issue bonds ranging from Rs 1,000 to Rs 1 crore.

As per the scheme, the Bond purchaser’s name cannot be made public by the bank, nor do the recipient political parties need to disclose the names of the donor to the Election Commission of India.

The scheme was heavily criticised by transparency activists for bringing in opacity in political funding.

RTI activist Commodore Lokesh Batra (Retd) filed a series of RTI queries in connection with electoral bonds that revealed several serious flaws in the scheme. His RTI revealed that the un-encashed amount went to PMNRF.

If PMNRF is claimed to be a ‘Private Trust’, not falling under the definition of Public Authorities under the RTI Act, 2005 - than what is the sanctity of the government issuing directions through Government Notification for anonymous donations through Electoral Bonds to be transferred to PMO for PMNRF.

Commodore Lokesh Batra (Retd), RTI Activist

“When such money is given to PMNRF, the fund acquires the character of a 'Public Authority' as contemplated under the RTI Act”, senior lawyer Prasanna S told The Quint

Commodore Batra has a further question - why not use the money accrued from the non-encashed bonds to pay for the cost of printing the bonds? It should be noted that a huge amount of tax payer money has been used to print electoral bonds. RTI queries reveal that SBI has printed over 6,60,000 electoral bonds, and has already raised a bill of nearly Rs 5.3 crore for the selling and printing of electoral bonds.

Instead of using the tax payer’s money to bear the printing cost of electoral bonds, the un-encashed amount should have been utilised. Why should the tax payer carry the burden of political donations.

Commodore Lokesh Batra (Retd), RTI Activist

PMNRF Has Denied Information Under RTI

In the past PMNRF had refused to supply information to RTI applicants.

In an appeal filed in 2007 before the Central Information Commission (CIC) by applicant Shailesh, who was denied information under RTI by PMNRF, the Chief Public Information Officer (CPIO) of Prime Minister’s Office took the following plea before the CIC, stating,

“Prime Minister’s National Relief Fund is not owned, controlled or substantially financed directly or indirectly by funds provided by the Government. It is, therefore, a private fund composed of voluntary donations and is not a business of the Government. Therefore, Prime Minister’s National Relief Fund does not fall within the purview of the definition of Public Authority as defined in Section 2(h) of the Act. As Prime Minister’s National Relief Fund is not a Public Authority, PMO is not bound to give information on this fund.

The then Chief Information Commissioner Wajahat Habibullah did not accept the PMO's plea and passed an order in favour of the applicant saying,

“We appreciate that the fund is a discretionary fund with the Prime Minister. But since the information is held by the PMO as the public authority, they are obliged to make it accessible to a citizen under the RTI Act unless such disclosure is exempted under Section 8.”

So, why is the PMNRF still refusing to share information under RTI. The Quint reached out to Wajahat Habibulah for a fresh comment -

The CIC’s decision stands unchallenged and is therefore now the Law. And if the PMNRF is still not disclosing the information under RTI then they are in the violation of the Law.

Wajahat Habibullah, Former Chief Information Commissioner

To sum up, here are the key questions again -

Why is the PMNRF accepting the money accrued from non-encashed electoral bonds?

Isn’t the PMNRF contradicting its stand by accepting money from non-encashed electoral bonds, and still claiming to be a Private Trust?

Shouldn’t the PMNRF come under the RTI to maintain transparency?

We have written to Prime Minister’s Office seeking answers to these queries. We will update the article as and when we get a reply.