By TIOL News Service

NEW DELHI, JULY 23, 2016: THE Confederation of Indian Industry (CII) has called for urgent clarifications in the Lokpal & Lokayukta Act, 2013, regarding definitions of terms such as ‘public servant' and financing by government. As per the notification issued last month, officials and senior employees of bodies receiving funding from overseas or from the government beyond specified limits are covered under the Act and must disclose their assets as well as the assets of their spouse and dependent children by 31 July.

“Industry has welcomed the Lokpal & Lokayukta Act, 2013, which aims to curtail corruption among public servants. However, the application of the Act to a wide number of charitable organizations and their functionaries can seriously impede social and philanthropic activities by genuine participants. CII requests the government to extend the deadline for disclosure and also to revisit definition of terms such as ‘public servant' and government funding,” urged Dr Naushad Forbes, President, CII.

CII has submitted a representation to the Government to (i) extend the timelines for compliance under Section 44 of the Act by three months to enable deeper study, (ii) review applicability of the Act to non-profit organizations, trusts, societies and other organizations and revisit definition of ‘public servant', among others.

“Unnecessary intervention will adversely create a lot of disruption in the working of trusts, societies, association of persons, charitable and non-profit organizations and we would request the Government to urgently re-examine this legislation,” added Dr Forbes.

In its representation to the government, CII has noted that a large number of trusts, societies, charitable and non-charitable organizations, including hospitals and educational institutions, are served by philanthropists and professionals in different capacities. These organizations are dedicated to social and community service and undertake a range of activities for the good and welfare of society. The provisions of the Act are also applicable to not-for-profit organizations and trade bodies which provide services for the competitiveness of industry.

The provision of intimating asset details will discourage senior philanthropists and social workers from participating in social development services, added CII. It will also deter professionals from working in such organizations. The disclosure requirements under the Act, applicable to private citizens and their spouse and dependent children, are said to be more onerous than the Conduct Rules for government servants which are limited to the government official only. Implementation of this measure as currently notified could precipitate immediate resignations from several public and social institutes.

CII stated that the Act is also ambiguous in the definition of ‘wholly or partly financed' or ‘controlled' by government. There is no clarity if this extends to loans, financial aid or grants, tax exemptions, etc provided by the Central Government. The provisions are incompatible with the Prevention of Corruption Act, 1988, in several respects.

Section 2(1)(o) and Section 14(1)(f-h) of the Act define a ‘public servant' as any person who is or has been a director, manager, secretary or other officer of every society or association or trust wholly or partly financed by the government. Such persons of any   body receiving over Rs 10 lakh donation in a year from any foreign source or Rs 1 crore from the government would need to submit full details of their assets.