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Pm Cares Fund

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Pm Cares Fund

Pm Cares Fund

By Nicole Karen Gomez

A public charitable trust under the name ‘Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund’ (PM CARES Fund) have been set up on 28 March 2020, acknowledging the need for a dedicated national fund with the primary objective of dealing with an unforeseen emergency or distress situation similar to the COVID-19 pandemic by providing relief to the affected in the form of financial assistance. Support relief and assistance would be provided for public health emergency and other emergencies, man-made and natural calamities or distress, creation or upgradation of healthcare and pharmaceutical facilities, alongside other necessary infrastructure and funding relevant research, and any other type of support deemed fit by the Board of Trustees. The fund entirely comprises of voluntary contributions made by individuals and is not entitled to any budgetary support. The fund enables micro-donations and as a result, people are able to contribute in the smallest of denominations, starting from INR 10. It is claimed the donations toward PM CARES Fund receive a complete exemption under Section 80 (G) of Income Tax Act 1961, and moreover that it qualifies as Corporate Social Responsibility (CSR) expenditure under the Companies Act, 2013. A separate account has been opened for receiving foreign donations enabling the fund to accept contributions from individuals based outside India which are as well exempted from tax as per the Foreign Contribution Act 2010. 

“People from all walks of life expressed their desire to donate to India’s war against COVID-19. Respecting that spirit, the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund has been constituted. This will go a long way in creating a healthier India,” – Prime Minister Narendra Modi.

Following PM Modi’s constant appeal to fellow Indians for contributions toward the fund, Indian industrialists, sports personalities, actors and others have pitched in large numbers, with some significant donations being:

  1. Billionaire industrialist Gautam Adnani, Chairman of Adnani Group has pledged to contribute INR 100 crore.
  2. Tata Sons and Tata Trusts have announced an INR 1,500 crore contribution besides the INR 5 crore initially contributed by Reliance Industries.
  3. JSW Group will extend the financial assistance of INR 100 crore.
  4. Indian Railways has pledged INR 151 crore from employees’ salaries.
  5. Actor Akshay Kumar will be donating INR 25 crore.

IndiaSpend recently conducted an analysis that estimated no less than INR 9,677.90 crore has so far been collected in the PM CARES Fund.

CONSTITUTION AND LEGALITY OF THE TRUST 

The Constitution of trust is as follows:

  • Ex-officio Chairman – Prime Minister, Government of India.
  • Ex-officio Trustees – Minister of Defence, Minister of Home Affairs and Minister of Finance, Government of India.
  • The Prime Minister who is the Chairperson of the Board of Trustees shall have the power to nominate three members to the Board of Trustees and they shall be distinguished persons in the field of research, health, law, social work, science, philanthropy and public administration. Further, all appointed trustees act in pro bono capacity.

Details regarding the establishment of the trust have completely been kept out of public domain and scrutiny. It is essential for the public to know whether due process of law has been followed especially since the trustees of the Fund are the highest elected functionaries of the constitutional democracy. Public charitable trusts are required to be registered in terms of provisions under the Registration Act, 1908 as well as Income Tax Act, 1961.

SCAM ALERT

The PM CARES Fund was started with noble intent, however, several fake UPI ID’s similar to the official one are being circulated through posts to misguide the contributors for personal profit. The citizens of India are constantly warned about confirming the authenticity of the ID before making donations.

PMNRF V. PM CARES FUND

The PM’s National Relief Fund (PMNRF) was established in 1948 with public contributions to assist displaced individuals from Pakistan and helps in providing medical help to people who suffer in major accidents, riots, and similar other incidents. The PMNRF requires a minimum donation of INR 100. The fund is recognized as a Trust under the Income Tax Act and shares identical objectives and features as the PM CARES Fund; then what is the necessity for an alternate trust?

Further, Congress MP Shashi Tharoor pointed out through a post on twitter the lack of transparency of the PM CARES Fund and its operations where donations have been made in hundreds of crores. He added, “This is important. Why not simply rename PMNRF as PM-CARES, given the PM’s penchant for catchy acronyms, instead of creating a separate Public Charitable Trust whose rules & expenditure are totally opaque? @PMOIndia you owe the country an explanation for this highly unusual step.” 

According to statistical analysts who compared the income and expenditure of the PMNRF from 2014-2019, it is observed that as of December 2019, 3800.44 crores balance remains idle in the account.

SUPREME COURT’S TAKE

A petition was filed seeking a direction that the funds received by PM CARES Fund should be credited to National Disaster Response Fund (NDRF) which is a statutory fund stipulated under the Disaster Management Act, 2005. The Centre contended that the petition was not under Article 32 as all funds other than the funds designated under Section 46 of the Disaster Management Act are different, distinct, and created under separate provisions. The apex court issued a notice on 17 June 2020 to the Centre on PIL seeking transfer of funds from PM CARES to NDRF. The NGO, Centre for Public Interest Litigation (CPIL), claimed that establishing PM CARES Fund is beyond the scope of the Disaster Management Act and in the backdrop of Covid-19, NDRF is not being utilized. On 9 July 2020, the Centre through an affidavit justified the creation of PM CARES FUND stating it is absolutely legal and opposed the suggestion of transfer of funds. 

Previously in April 2020, a petition challenging the legality of PM CARES Fund was dismissed by the 3-judge bench stating the petition had a political colour and the petitioner was threatened with a fine in case the petition was not withdrawn. Moreover, the Supreme Court has ordered the authorities to provide accurate information in 30 days about the total amount available in the fund, the sources of the contributions and purposes the amount has been used. Although, even after the 30 days’ notice, the authorities have not offered any reply to the order from the Supreme Court and a group of independent auditors is assigned the task of auditing the fund of PM CARES.

CONTROVERSIES RELATING TO THE FUND

  1. The decision-makers of the fund allocation at its helm belong to one political party, thus creating a huge concern about the allegations of favouritism and cronyism with regard to expenditure being true. Furthermore, why is the trust deed not in the public domain? The Government is duty-bound to do so.
  2. Reportedly, the army, navy, air force, defence PSU’s and employees of the defence ministry have conjointly contributed INR 500 crore, but it appears even though the donations are said to be voluntarily, many Government employees were not given a choice, instead circulars were issued to the various departments “urging” employees to donate a day’s salary each month with the option to give their objection in writing if any and face probable retaliatory actions.
  3. The sole announcement about the allocation of the fund made till date is INR 3,100 crore for Covid-19 works of which INR 2,000 crore would be spent for purchase of 50,000 ‘Made in India’ ventilators. The 5,000 ventilators previously procured from a Rajkot-based supplier which proved inadequate. 
  4. Congress has alleged that Chinese firms were contributing to PM CARES Fund and questioned why such donations were being accepted considering the tense border standoff engaged between India and China.
  5. The Modi Government has been repetitively accused of a lack of transparency about the fund. The Government has refused the Comptroller and Auditor General of India (CAG) to conduct the audit of the fund but instead appointed independent auditors to do the job; leaving the question behind, ‘if there is nothing to hide then why not allow the CAG to audit?’.
  6. Why weren’t the PM CARES Funds utilized to help millions of migrant labourers who were stranded in the cities with no savings during the lockdown? No allocation has been made to create jobs for the 12.2 crore individuals who lost their jobs to the Covid-19 pandemic. Does the PM really CARE?

REFERENCES

https://thewire.in/government/pm-cares-covid-19-fund-narendra-modi