Should the 'commercial confidence' exemption under the RTI Act apply to public sector enterprises in matters of internal resource allocation? Discuss with reference to Section 8(2).

Section 8(1)(d) of the RTI Act, 2005 protects commercial confidence where disclosure would harm a third party's competitive position. It is a qualified exemption, because Section 8(2) permits disclosure when public interest outweighs that harm [3]. The HITPA episode shows why PSUs should not use it as a blanket shield.

Context: the HITPA case

• The CAG (2022) found that the PSU general insurers' own TPA, HITPA, performed comparably but received minimal business. Between 15% and 44% of business went to one private TPA [1].
• New India Assurance and Oriental Insurance refused every RTI query under 8(1)(d). United India and National Insurance shared operational data [2].

Case for applying the exemption

• Competitive market: PSU insurers compete with private insurers. Data on contract rates or per-claim fees could help rivals bargain against them, which is the harm 8(1)(d) targets [3].
• Board autonomy: choosing a vendor is a commercial decision, and a CAG recommendation is only advisory.
• Third-party interest: private TPAs' contract terms may be genuinely confidential.

Case against, tested under Section 8(2)

• Harm test: in ICAI v. Shaunak H. Satya (2011), the Supreme Court held that 8(1)(d) applies only where disclosure would harm someone's competitive position [4]. The share of claims routed to a public-owned subsidiary reveals no price or trade secret.
• Public money: sending claims to outside TPAs instead of a capable captive one drains premium income. The public interest in value for money tilts the 8(2) balance towards disclosure [1][3].
• Severability: Section 10 allows the non-exempt part to be released. A refusal on every question skips that step [3].
• Inconsistency: two peer PSUs disclosed similar data, which weakens the claim of harm [2].
• Audit follow-up: RTI was the route by which the public sought the status of the 2022 CAG recommendation [2].

Way forward

• Apply the harm test question by question: withhold rates, but disclose aggregate allocation shares.
• The Department of Financial Services should set a uniform disclosure norm, such as reporting HITPA's share of claims in annual reports.
• Applicants can appeal to the CIC to test blanket 8(1)(d) claims.

Commercial confidence rightly protects PSUs from competitors, but not from their owners, the public. Internal allocation data, minus price-sensitive details, should be disclosed under Section 8(2). Doing so balances commercial autonomy with the right to know under Article 19(1)(a), and keeps PSUs both competitive and accountable.