Analysis of the

PM CARES Fund

By: Ishika Lohani

The Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund or PM CARES Fund were created on 28 March 2020, under the disastrous impact of COVID-19 pandemic in India. These funds were to be used for consolation, containment and aid measures against the coronavirus outbreak and similar pandemic jeopardising the country. The Prime Minister of India is the heading chairman of the fund along with the trustees which include the Minister of Defence, Minister of Home Affairs and Minister of Finance from the Government of India. The fund will also enable micro-donations. The minimum donation accepted for the PM CARES Fund is ₹10. The donations will be tax-exempt and fall under corporate social responsibility (CSR). The Prime Minister had said that the PMO had received many requests to help in the war against COVID-19. Accordingly, the fund was set up and will be used for disaster management and research. There is also a provision that allows The Chairperson of the Board of Trustees (Prime Minister) shall possess the power to nominate three trustees to the Board of Trustees who shall be eminent persons in the field of research, health, science, social work, law, public administration and philanthropy. Any person appointed a Trustee shall act in a pro bono capacity.

Who may contribute to this fund?

The fund receives non-mandatory contributions from individuals and organisations and does not get any budgetary support. Donations have been made tax-exempt and it is also freed from the Foreign Contribution Regulation Act (FCRA), 2010, and accepts foreign contributions.

Does India already have a fund with alike objective?

Yes, the recently launched PM CARES funds enjoys all the benefits over Prime Minister National Relief Fund (PMNRF) which was set up in January 1948 by Pt. Jawaharlal Nehru which included the Prime Minister, the President of the India National Congress Party, the Deputy Prime Minister, the Finance Minister, a representative of Tata Trustees, a representative of Industry & Commerce to be chosen by FICCI. The PM-NRF fund is audited by an external auditor and not the CAG. The PM-CARES is now audited by Mr Sunil Kumar Gupta for the next three years. Both funds have received exemptions under Section 80G of the Income Tax Act and from the applicability of the Foreign Contribution Regulation Act (FCRA), thereby allowing both to raise funds from any source, anywhere in the world. The PM CARES fund and PMNRF have alike motive except that PMNRF doesn't accept a contribution from the Public Sector Undertaking (also known as Public Sector Enterprise or PSU) whereas the PM CARES funds accepts the contribution of PSU's.

Lack of Transparency in PM CARES funds

The Prime Minister’s Office (PMO) has refused to make documents related to the PM-CARES Fund public. A plea has been filed in the Supreme Court on Wednesday which sought a direction to the Centre to transfer all contributions of the PM Cares Fund to the NDRF. Prashant Bhushan along with senior advocate, Dushyant Dave filed the public interest litigation (PIL), represented the petitioner in a virtual court hearing, seeking directions to the government to prepare and address a national plan as per the provisions prescribed under the Disaster Management Act, 2005, to deal with the damage caused by the COVID-19 pandemic. It is significant to note that the PMO has not refused to share information straightforwardly but among many reasons, cited a controversial statement made by a bench of the Supreme Court. Recently the Crimson PMO ( Prime Minister Office) on 17th June refused to accept that the PM CARES fund includes "Public Authority" under RTI act.

As per the section 2(h) of the RTI act -'Public Authorities' - any authority, body or institution of self-government established or constituted a)by or under the constitution; b) by any other law made by parliament; c) by any other law made by the state legislature and d) by the notification issued or order made by the appropriate government. It also includes “body owned, controlled or substantially financed; non-governmental organisation substantially financed directly or indirectly by funds provided by the appropriate government”. The PM Cares website meanwhile contains no details of donors, amounts collected, or any information regarding the utilisation or earmarking of funds. Its trust deed is not publicly available for scrutiny, and the government has announced that the fund will be audited by “independent auditors”, not the Comptroller and Auditor General. This misguide may just not speak the Lack of transparency and denying the application of the RTI act to the funds but also may worry the people about how the fund is operated and what kind of influence the fund is under.

The Dilemma

While both the trusts are similar in nature and material, allowing PSUs to donate in PM Cares is like thrashing money into a private trust by the government on the request of the Prime Minister in its ex-officio capacity. The trust could announce any amount to have been received and allotted or spent without being checked by supervision. The trust is not under the RTI act, therefore, it makes it difficult for one how the funds are channelized. It is perplexing to understand why would the Government come up with PM CARES funds if it enjoyed all the benefits under the existing Prime Minister National Relief Fund (PMNRF). As well as there seems no reason why the NDRF (National Disaster Response Fund) is taken no notice of especially when it is managed by Central Government, RTI and CAG Audit is applicable. Is the government’s commitment about foodgrains coming out of PM CARES fund or is to overshadow the want of transparent?

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