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DPDP Act 2023

Section 32

Data Protection Board Fund

THE STATUTE

Original Text

(1) There shall be constituted a fund to be called the Data Protection Board Fund to which shall be credited — (a) all grants made by the Central Government; (b) all fees and charges received by the Board under this Act; (c) all sums received by the Board from such other sources as may be decided upon by the Central Government. (2) The Board Fund shall be applied for meeting — (a) the salaries and allowances payable to the Chairperson and Members and the administrative expenses of the Board; (b) the expenses of the Board in the discharge of its functions under this Act. (3) The Board shall maintain proper accounts and other relevant records and prepare an annual statement of accounts in such form as may be prescribed by the Central Government in consultation with the Comptroller and Auditor-General of India. (4) The accounts of the Board shall be audited by the Comptroller and Auditor-General of India at such intervals as may be specified by him, and any expenditure incurred in connection with such audit shall be payable by the Board to the Comptroller and Auditor-General of India.

Simplified

Section 32 establishes the Data Protection Board Fund — the financial plumbing that sustains the Board as an independent body. Three revenue streams feed the Fund: Central Government grants (the primary source of funding, especially in the early years before the Board has built up fee and penalty income); fees and charges received under the Act (registration fees for Consent Managers, filing fees for complaints, etc.); and other sources decided by the Central Government. Fund expenditure covers Board salaries, Member remuneration, and all administrative and operational expenses. The accounting and audit framework is rigorous: the Board must maintain proper accounts, prepare annual statements in the CAG-prescribed format, and submit to CAG audit at specified intervals. CAG audit of the Board's accounts provides Parliament and the public with independent oversight of how penalty proceeds are being applied and how the regulator manages its resources. The design of the Fund raises a significant independence question: if the Central Government is the primary funder through grants (Section 32(1)(a)), and the same government can direct the Board through Section 40, the Board's financial dependence on the government could compromise its regulatory independence. An adequately self-funded Board — through registration fees and a proportion of penalties — would be structurally more independent. This design will become practically important as the Board scales up its operations.

Common Queries

Penalties collected by the Board are credited to the Data Protection Board Fund under Section 32(1). The Fund is used for the Board's salaries, administrative expenses, and operational costs.
Not fully — Section 32(1)(a) makes Central Government grants the primary revenue source. Financial independence increases as the Board generates its own income through fees and penalties. This is a structural independence concern.
The Comptroller and Auditor-General of India (CAG) audits the Board's accounts under Section 32(4) — providing independent parliamentary oversight of the Board's finances.

Legal Context

Board Fund structures are standard across Indian regulatory bodies — SEBI, IRDAI, TRAI, and others all have similar fund provisions. The CAG audit requirement provides parliamentary accountability. The key question for DPDP is whether the Fund becomes self-sustaining through fees and penalty receipts, reducing dependence on government grants.

Key Rules & Provisions

Central Government grants are the primary funding source — financial dependence raises independence concerns.

CAG audit provides independent financial oversight and parliamentary accountability.

Fees from Consent Manager registrations and complaint filings will supplement government funding.

Related Case Laws

Comptroller and Auditor General of India v. K.S. Jagannathan (1986)

(1986) 2 SCC 679
RELEVANCE

The Supreme Court affirmed the CAG's constitutional role as Parliament's independent auditor of public funds. Section 32(4)'s requirement for CAG audit of the DPBI Fund gives Parliament independent assurance that penalty proceeds and government grants are being properly applied — directly invoking the CAG's constitutional function.