Recently subjected to the RTI law, Public Health Foundation of India seems to have been unravelling like the plot of a B-grade movie from Bollywood. As it turns out, the very formation and continued existence of the organization is based on fraud.
On 14 February 2012, in a significant decision, the Central Information Commission noted “with some dismay that the highest levels of public servants in
did not accept the citizen’s enforceable right to information in PHFI, despite the
government substantially funding it and exercising some control”.
The CIC was referring to Public Health Foundation of India remaining non-compliant with the RTI Act 2005 for six years since its inception in February 2006 despite the presence of T.K.A. Nair (Advisor to Prime Minister Manmohan Singh), Montek Singh Ahluwalia (Deputy Chair, Planning Commission) and a few other high-ranking bureaucrats on its governing board.
The phrase “highest levels of public servants in India”, however, might well apply to Prime Minister Manmohan Singh himself, who personally implanted PHFI into the heart of India’s public health policy and administration while describing it as a “public-private partnership” (PPP).
In that decision, the CIC countermanded the will of “the highest levels of public servants in
by ruling that PHFI was a public authority under Section 2(h) of the RTI Act 2005
and must start complying with the law.
Subsequent developments not only vindicate the CIC, but also suggest, quite scandalously, that the public and private patrons of PHFI have been hiding a lot from the citizens.
Fabrication given away
In August 2012, in response to my RTI request, Kalpana Swamy, the public information officer (PIO) at PHFI, sent me what appears clearly to be a forged document as part of information that’s dubious and contradictory in general.
The document in question came as a five-page ‘Annexure B’ with PHFI’s response dated 13 August to my request dated 05 July. It is purported to be a photocopy of an officially certified document setting out the composition of the governing council of PHFI as on
The original document has ostensibly been stamped with PHFI’s seal and signed by president K. Srinath Reddy on 03 August 2006, but contains several instances of asynchronous information that shows that it has recently been forged.
(a) For example, R.A. Mashelkar, who was Secretary of DSIR (Department of Scientific and Industrial Research) and Director General of CSIR (Council of Scientific and Industrial Research) in March 2006, has been listed as ‘CSIR Bhatnagar Fellow, National Chemical Laboratory’ which he became only after his retirement in December 2006.
(b) K. Sujatha Rao has been listed as ‘Former Secretary, Ministry of Health & Family Welfare’. Rao retired from her post as Secretary of the health ministry in November 2010.
(c) The “occupation” of Rajat Gupta – the prime mover in the formation of PHFI and its chairman until March 2011, who is going to jail after being convicted of securities fraud in the
– also seems to be a recent addition. According to publicly available
information, he was Senior Partner at McKinsey & Co. in the year 2006, but
has been listed in the forged document as ‘Former Partner, McKinsey and Co.’.
Pattern of misleading info
Further, while the ‘Annexure-B’ lists 24 persons as making up the governing body that came into effect on 27 March 2006, the same PIO at PHFI had earlier informed Kishan Lal, a Mumbai-based RTI applicant, with a copy to CIC Shailesh Gandhi, that, “The Governing Council with 21 members came into effect on March 27, 2006”.
(This information was provided as part of the same case that resulted in PHFI being held a public authority – decision No. CIC/SG/C/2011/001273/17356; I had represented Kishan Lal at the CIC.)
The day of
2006 is important,
being the eve of PHFI’s “launch” by Prime Minister Manmohan Singh.
Strangely, the ‘Annexure-B’ shows four top bureaucrats − Nirmal Ganguly, Prasanna Hota, K. Sujatha Rao and R.K. Srivastava − as members of PHFI board on 27 March 2006, even though there is nothing in the public domain that attests to the government authorizing these four to join the board on or before that date.
There are more such mysteries about the composition of the board as also instances of dubious and contradictory information in PHFI’s response of 13 August.
PHFI’s baleful influence also seems to have spread to the Union health ministry one of whose CPIOs sent me an itemized “PHFI Response” in reply to another request that was specifically addressed to the government, not PHFI.
The first point in my request, for instance, enquired as to whether the health ministry recognized PHFI as an ‘autonomous body’ and, if it did, whether it obtained the approval of the Cabinet for the formation of the organization as an ‘autonomous body’.
In his reply of 16 August, the CPIO not only allowed this and other points in my request to be answered by PHFI, but labelled the itemized response generally as “PHFI Response”. Needless to say it is full of misleading information.
The larger deception
Since the CIC decision of 14 February, a lot more has come out in the open that shows that the very formation and existence of PHFI is based on fraud.
For more than six years the government has been advertising PHFI, alternatively and according to its convenience, as a “public-private partnership” or an “autonomous body” or an “autonomous PPP” – the last descriptor being compounded from the preceding two and invented especially for PHFI.
These promotions include several formal statements made to the Parliament and a parliamentary committee.
For example, in mid-2006, PHFI was introduced as a PPP to the Parliamentary Standing Committee on Health and Family Welfare, which was considering the demand for grants (2006-07) of the department concerned.
2006, Panabaka Lakshmi, the then minister of state for health,
described PHFI as an “autonomous body” to the Rajya Sabha.
31 August 2007,
speaking again in the Rajya Sabha, Lakshmi described PHFI as an “autonomous
It transpires now, according to government’s own responses to RTI requests, that PHFI was never intended to be and never was a “PPP” or an “autonomous body” in the senses that the government rules assign to these two descriptors.
In responding to Kishan Lal, for instance, in another case that went up to the CIC, the health ministry not only denied the existence of any PPP initiated by the government in the health sector, but also the existence of any “PPP policy for the social sector, viz. education and health.”.
Needless to say no contractual agreement was ever signed between the supposed ‘private partners’ and the supposed ‘public partners’ to form PHFI.
In other words, PHFI is not only a law unto itself, but is meant to be a durable, flexible, first-AC-railway-coach-like arrangement carved within the government for the well connected to use as they like and when they like.
The “autonomous body” cover has been even more fraudulent. (“PHFI cannot be defined as an autonomous body,” I was informed by the health ministry hiding behind its “PHFI Response” of 16 August.)
It was needed only for the “grant-in-aid” of Rs 65 crore, which the government had earlier approved as a “one-time contribution” to PHFI corpus on
06 July 2006, to pass
muster. Setting up PHFI as an “autonomous body” was out of question for the
government and its private collaborators as it would have meant meeting the very
elaborate conditions laid down by the General Financial Rules 2005 (GFR 2005) for
forming such bodies.
One of those conditions is a prior Cabinet approval, which was never obtained and never intended to be obtained. In fact, the so called “grant-in-aid” of Rs 65 crore was rendered illegal from the moment it was conceived because it was provided in violation of GFR 2005.
As for “autonomous PPP”, this special coinage simply meant, ‘Let me pull some more wool over your eyes’.
Here is more wool
Insinuating PHFI − which amounts to a corporate coterie sprinkled with an Amartya Sen and a Mirai Chatterjee (of SEWA) to make it palatable − into the public health set-up has not been just about the misuse of certain descriptors, but is much more than that.
The government misled the citizens, the Parliament and the parliamentary panel into believing that PHFI would limit itself to public health education and, at the most, some research work that can be put to use in policy making.
While the parliamentary panel – for instance – was specifically assured against its serious misgivings that “this experiment will be confined to the area of public (medical) education only”, PHFI was turned gradually into virtual government.
It has been allowed to participate directly and widely in policy formulation, bag very lucrative public procurement jobs without any competitive bidding, and even receive aid as part of the health-related agreements that the Centre signs with the foreign governments.
PHFI acted − to take a few examples − at full public cost as the secretariat for the High Level Expert Group on Universal Health Coverage that was chaired by its president Srinath Reddy and whose report is meant to be a blue print for national health policy for many years to come.
PHFI was chosen without any competitive bidding as technical partner in the National Initiative for Allied Health Services (NIAHS), a Rs 1100 crore project of the health ministry for expanding paramedical capacity. (The list of handsomely paid central and state projects that it has bagged is too long to be given here.)
And PHFI received a hefty funding from the Norwegian government as part of the Norway India Partnership Initiative (NIPI) for reduction of child mortality in five states.
The parliamentary panel was also given an exaggerated sense of government’s ability and intent to influence decision making in PHFI board. It transpires that the government has never had any significant power − or even intention − to influence any decision in PHFI board, not even the ability to convene a meeting.
PHFI’s rules not only limit the number of government representatives on the board to a meagre proportion of the total membership, but also give non-government members (read Big Business) the super-majority to decide who would be recognized as a “government representative”.
“MS Ahluwalia is a member of the PHFI board as MS Ahluwalia, not as deputy chair of the Planning Commission,” a counsel for PHFI informed the CIC on 24 January at a hearing that this writer attended.
This “individual capacity” membership of the board – a new record in pushing public servants into lawlessness and corruption – was termed by the CIC as “untenable”.
“It is difficult to assume that senior public servants can be on the board of an organization like PHFI, which has numerous interactions with the government, in private capacity. In fact, this would necessarily imply a conflict of interest. The Commission can only assume that such public servants must necessarily be acting on behalf of the government, when they are required to take executive decisions as members of the board… Any other conclusion would be an improper slur on their integrity,” the CIC wrote in its decision of 14 February.
This “improper slur on their integrity” was, nevertheless, written into the rules of PHFI with the connivance of the “senior public servants” themselves.
Government’s covert and overt support to PHFI has been illegal − from its deliberately obfuscated beginnings to the present time. It was illegal when, in February 2006, Srinath Reddy, then head of the cardiology department at AIIMS, and R.A. Mashelkar, then Secretary-DSIR, were encouraged to team up with Rajat Gupta, his two McKinsey colleagues and two corporate lawyers to register PHFI as a society.
The Central Civil Services (conduct) Rules 1964 don’t allow a government employee to form an organization that will replicate or resemble the work of his parent organization on a significant scale and explicitly prohibit him from soliciting funds.
Information obtained through RTI shows that Reddy’s “deputation” from AIIMS to PHFI – effected by a ministerial fiat – was irregular and arbitrary; neither the AIIMS rules allow any such deputation, nor the proposal was ever placed before AIIMS governing body.
(Reddy is currently improving public health and public finances by drawing a salary of Rs 60 lakh a year plus a bungalow.)
In fact, “deputations” of all government employees to PHFI can only be regarded as illegal because PHFI does not fit any description of any organization to which rules would allow public servants to be seconded.
Information released by DSIR under RTI shows that it hastily certified PHFI as a Scientific and Industrial Research Organization (SIRO) without there being any worthwhile record of research work and without ever visiting the latter’s facilities.
Likewise, PHFI’s public health management courses have no recognition or accreditation from any statutory regulator in the country.
“The PHFI initiative has been collaboratively developed over the last two years under the leadership of Rajat Gupta of McKinsey, the Ministry of Health, and Srinath Reddy,” The Indian Express wrote on
29 March 2006.
News reports such as these suggest that the government worked secretly with certain well connected manipulators and front men to plan the formation of PHFI. This sly and undemocratic way has often been portrayed by the cronies-in-arms as “smart ways of working together to overcome national challenges” or “innovative models of public-private partnerships”.
If these are really “smart ways of working together to overcome national challenges” or “innovative models of public-private partnerships”, why can’t they be encapsulated in a publicly discussed and properly formulated public policy?
Why do they fall foul of laws, rules and regulations as they actually did at every step in the design, formation and functioning of PHFI?
The criminal streak built in PHFI is best illustrated by the forgery described above and the fact that a soon-to-be-convicted fraudster was allowed to continue – until some protests – to chair a body privileged to influence public policy and having the representative of no less than the Prime Minister.
Also illustrative is the example given above of how the health ministry has allowed itself to be suborned by PHFI.
In fact, PHFI represents a new low in the ongoing degradation of the concept of democratic governance and rule of law; a new record in the ill-treatment of public health of a billion-strong population by the government; and the very worst of crony capitalism that India has ever known.
Whys and the wherefores
(a) Why would the government implant so deceptively what is essentially a private club into the sensitive area of public health policy where decisions would be of vital concern to a population of over a billion?
(b) If the government really wanted a PPP to take care of
public health policy and administration, why didn’t it first introduce a PPP
policy in the health sector?
(c) Why would the government lavish vast public resources on an organization without demanding transparency, public accountability and public audit?
(d) Why would the government parcel out the ability to influence public policy and administration to people according to the influence they wield, the connections they have and their ability to pay?
(e) Why would the government choose to have no power to influence decision making in an organization packed with Big Business representatives, the prime mover among whom managed to commit fraud, get caught and convicted?
(f) Why would the government not see the obvious conflict of interests in the roles of Big Business in increasingly privatized provision of medical services while also wangling a seat in a forum privileged to influence policy that will affect the size of medical services market?
(g) How can the government accept the market principle in provision of health services while still gifting lucrative public procurement jobs to its cronies without competitive bidding?
The answers to these questions are a matter of life and death for us and our children.
This is the full and unedited version of the two-part article first published on 10-11 September 2012 on Moneylife website. The writer has since made his formal complaint about forgery, in the form of first appeal, to PHFI. He has also sent letters of complaint to a dozen members of PHFI’s governing body, including T.K.A. Nair, M.S. Ahluwalia, P.K. Pradhan (Secretary Health), Amartya Sen and Mirai Chatterjee, but has not received any reply from any of them.