The Controversy of PM CARES Fund

Context

The Supreme Court has dismissed petition seeking transfer of PM Cares Fund to PMNRF.

Background

The Supreme Court has rejected a plea that sought its direction to the Centre to transfer contributions made to the PM CARES Fund for fighting the Covid-19 pandemic to the National Disaster Response Fund (NDRF). Hearing a petition filed by NGO Centre for Public Interest Litigation, a bench headed by Justice Ashok Bhushan and comprising justices RS Reddy and M R Shah said that voluntary contribution can always be made to the NDRF. The NGO had claimed the Centre was refraining from divulging information about the money contributed to the PM CARES Fund till date.

About the Fund

Keeping in mind the need for having a dedicated national fund with the primary objective of dealing with any kind of emergency or distress situation, like posed by the COVID-19 pandemic, and to provide relief to the affected, a public charitable trust under the name of ‘Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund’ (PM CARES Fund)’ has been set up.

Objectives of the Fund

• To undertake and support relief or assistance of any kind relating to a public health emergency or any other kind of emergency, calamity or distress, either man-made or natural, including the creation or upgradation of healthcare or pharmaceutical facilities, other necessary infrastructure, funding relevant research or any other type of support.
• To render financial assistance, provide grants of payments of money or take such other steps as may be deemed necessary by the Board of Trustees to the affected population.

Constitution of the Trust

Prime Minister is the ex-officio Chairman of the PM CARES Fund and Minister of Defence, Minister of Home Affairs and Minister of Finance, Government of India are ex-officio Trustees of the Fund.

The Chairperson of the Board of Trustees (Prime Minister) shall have 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.

Donations to PM CARES Fund would qualify for the Income Tax banifits. It also qualify to be counted as Corporate Social Responsibility (CSR) expenditure under the Companies Act, 2013

PM CARES Fund has also got exemption under the FCRA and a separate account for receiving foreign donations has been opened. This enables PM CARES Fund to accept donations and contributions from individuals and organizations based in foreign countries. This is consistent with respect to Prime Minister’s National Relief Fund (PMNRF). PMNRF has also received foreign contributions as a public trust since 2011.

Controversy

PM CARES fund has also got exemption under the FCRA and a separate account for receiving foreign donations has been opened and it will be made operational soon. This will enable PM CARES Fund to accept donations and contributions from individuals and organizations based in foreign countries. This is consistent with respect to Prime Minister’s National Relief Fund (PMNRF). PMNRF has also received foreign contributions as a public trust since 2011.

Companies donating to the PM Cares Fund are allowed to earmark their contribution under the Corporate Social Responsibility (CSR). This facility of getting uncapped corporate donations is not available to the PMNRF or the Chief Minister's Relief Fund in states. In fact, the previous CSR guidelines restricted the use of corporate donations to fund government schemes.

Another objection against PM Cares Fund was that originally it was not subject to audit. On the other hand, PMNRF expenditures are audited by an independent auditor. Though, in the face of strong public criticism, the PMO got an auditor for PM Cares Fund.

Conclusion

There are lot of criticisms against the operation features of the Fund like keeping outside the purview of the CAG. The idea, essentially, was to keep the spending decisions flexible for the government, critical in times of disaster-mitigation instead of these getting caught up in issues of whether the spending was justified, whether purchases were made from the lowest bidder etc. It is obvious that spending decisions of a government are quite different in scale than those of a calamity relief fund.

Certainly, corruption must be reduced, but the solution can’t be such that it chokes off decision-making; things have reached such a stage that even well-reputed bureaucrats are scared to take more than fairly basic decisions.

Connecting the Article

Question for prelims

Consider the following statements, with reference to the Prime Minister’s National Relief Fund :

1. It was set up by an Act of Parliament.
2. It accept donations from national and foreign nationals.

Which of the following statements is/are correct ?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Question for Mains

Despite the availability of number of funds available for relief purposes in the calamity or in any other disaster, critically examine the need of PM CARES Fund.