The Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES) was launched on 28th March 2020. Its immediate purpose is to raise funds for fighting the novel coronavirus or COVID-19. Quite expectedly, the opposition parties started raising queries about the need for such a fund, when the PM National Relief Fund (PMNRF) already exists.
Sonia Gandhi, President of the Indian National Congress, also urged the Prime Minister to shift the funds under PM-CARES to PMNRF for ensuring ‘accountability.’
This article objectively analyses the PM-CARES fund vis-à-vis the PMNRF and also highlights the legitimate concerns surrounding the fund.
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How are PM-CARES and PMNRF similar?
Both funds share the following characteristics-
- They are set up as trusts with designated trustees
- They do not receive any budgetary support
- Individuals donating to these funds can claim income tax exemptions
- Companies donating to the fund can claim CSR exemptions (CSR stands for Corporate Social Responsibility. According to the Companies Act, 2013, certain companies are required to spend a fixed percentage of their profits for CSR activities)
- The funds are also exempted under the Income Tax provisions
- They can receive foreign contributions as well
- While the mandate of PM-CARES is broader, the fundamental objective of both the funds is similar
- The Prime Minister has full discretion in disbursing the collected money under the funds
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Key Differences
Mandate
The mandate or scope of both the funds is very similar. The PMNRF, which was set up in 1948 as a response to the refugee crisis due to the Partition, provides assistance and relief to the citizens when they face any emergency, calamity, or increased medical expenses. Over time, it has been used to assist people stuck in floods, earthquakes, riots, etc.
Whereas, the PM-CARES, in addition to this, would also provide funds for developing the healthcare infrastructure and for research in pharmaceuticals.
The Trustees
The trustees/board members of PMNRF are the PM, the Deputy PM, the Finance Minister, the President of the Indian National Congress, a representative of the Tata Trustees, a member of industries and commerce as appointed by FICCI. The main point of contention is the fixed position of the INC president in the trust. While the Congress Party is currently in opposition, this provision may be justified for the sake of transparency. But such an arrangement will have little effect if Congress ever comes back to power. Similarly, it is unjust towards political parties who may become the leading opposition party in the future but will not have a seat in PMNRF at the cost of an INC President.
Also, the PMNRF is managed entirely by the PM since 1985, when all the other trustees delegated their authority to the Prime Minister.
PM-CARES, on the other hand, has the Prime Minister, the Finance Minister, the Foreign Affairs Minister and the Defence Minister as its trustees. Also, three experts can be nominated by the Prime Minister to the Board of Trustees. Unlike the PMNRF, where the Prime Minister is the sole manager of the fund, the PM-CARES involves other important ministers in the decision-making process.
Transparency Issues
The PM-CARES fund, like the PMNRF, is not very transparent in its operation. While PMNRF provides the annual report of donations and expenditure, PM-CARES has, until now, been opaque about the same. It is also unclear as to whether PM-CARES comes under the ambit of the Right to Information Act or the office of the Comptroller and Auditor General. However, it was announced that the fund would be audited by ‘independent’ auditors appointed by the trustees themselves, which has raised a few eyebrows.
The PMNRF is marred by the same problem of non-transparency and opaqueness. It does not disclose the list of donors and beneficiaries or reveal details to the Parliament despite managing a considerable sum of money. It is also not audited by the CAG, nor does it come under the RTI. Just like the PM-CARES, even the PMNRF is audited by an independent third-party.
Why is PM-CARES desirable?
The PM-CARES fund has been tied to the cause of fighting COVID-19. Time and again, the narrative of a pan-India unity against the virus has been reinforced on the population’s psyche. Thus, the process of raising money has been expedited. This is supported by the fact that the fund raised Rs. 6,500 crores in the first week itself, in contrast to the PMNRF, which currently has a corpus of only Rs. 3,800 crores.
Suggestions
The government must address transparency issues as soon as possible to quell controversies in the future.
Allowing it to come under the ambit of the RTI and be audited by the CAG can be considered as viable options. Also, the government must release the details of individual donors and beneficiaries soon.
An alternative is that the fund can allow a member of the opposition party to become a trustee, and he/she should have a role in determining the third-party auditor.
References
//www.boomlive.in/fact-file/pm-cares-vs-pm-national-relief-fund-all-you-need-to-know-7618