The Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES) was established by Prime Minister Narendra Modi, on 28th March, 2020, as a dedicated national fund to deal with exigencies created by emergency situations like the COVID19. Since the setup of the fund, it has received both donations and criticism in equal vigour. What was the need for a separate fund exclusive of Prime Minister National Relief Fund? What are the problems with PMNRF? Here is an explainer breaking down the issues surrounding PM-CARES and PMNRF.
What is the purpose stated by the two funds?
Contrary to the popular notion that it is a fund created exclusively for COVID19, it is to be noted that the PM CARES has been set up to provide for relief support and assistance to ‘any kind of emergency’ – be it natural or man-made. In a way, it is an alternative to the Nehruvian relic PMNRF.
The PMNRF was set up in 1948 by the then Prime Minister Jawaharlal Nehru to assist those displaced due to partition. It gradually became a fund for providing relief during natural or manmade calamities. Assistance is also provided to acid attack victims and to partially defray expenses for medical treatments like heart surgeries, kidney transplant, cancer treatment, etc.
While the objective of PMNRF stops at providing immediate relief to those affected by disasters, accidents, riots, the PM-CARES takes a giant leap forward by providing for upgradation of healthcare facilities, other necessary infrastructure and also fund relevant research.
How are the two funds constituted?
PMCARES has been registered as a Public Charitable Trust registered under the Registration Act, 1908. The Prime Minister of India serves as the ex-officio Chairman of the PM CARES Fund with the Minister of Defence, Minister of Home Affairs and Minister of Finance serving as the ex-officio Trustees of the fund. Apart from them, the Chairperson of the Board of Trustees (PM) has the power to appoint 3 eminent persons from the field of research, health, science, social work, law, public administration and philanthropy.
PMNRF is recognized as a Trust under Income Tax Act and is managed by the Prime Minister or multiple delegates. However, when it was constituted by Nehru, the following were included in the management committee : Prime Minister, President of Indian National Congress, Deputy Prime Minister, Finance Minister, 1 representative of Tata Trustees, 1 representative of Industry and Commerce chosen by FICCI.
So, unlike the PMNRF, the PM CARES has no representation from any political party.
What are the inflows?
Both PMCARES and PMNRF accept voluntary contributions from individuals and institutions. Donations made by companies and individuals to PM CARES and PMNRF are completely tax exempt. Donations made by companies are classified as Corporate Social Responsibility (CSR) activities under Companies Act 2013 in both PM CARES and PMNRF. Both funds accept contributions from individuals and companies based in foreign countries. Both the funds do not accept contributions flowing out of budgetary sources of the PSUs. However, donations made by PSUs are considered as part of CSR under PM CARES.
Who has the power to take decisions?
The PM CARES Trust will take decisions on allocation of funds based on the discussions and collective wisdom of the ministers and nominated members. On the other hand, the decision of allocating money and selecting beneficiaries was done based on the discretion and recommendations of the PM.
What happens to the surplus funds?
The surplus funds of PMNRF are invested in various scheduled commercial banks. In the past, the fund had been putting money in good old savings accounts, invested in fixed deposits and earning interest worth crores from them. The fund instead of serving as a means to handle emergency situations has turned into an investment vehicle with individuals and companies using the fund to claim tax exemption. The year 2018-19 saw ₹534 crores as contributions from individuals and companies (2/3rd of total receipts).
So far, the PM CARES does not have any surplus funds as they are being given to states to tackle the fight against corona virus. It is not clear as to what will happen to the surplus funds post the pandemic period.
Who audits the funds?
The PMNRF is audited by an independent auditor outside the government. Currently, SARC & Associates Chartered Accountants are engaged as auditors.
The government has stated that PM CARES fund would be audited by one or more independent authorities appointed by the trustees. However, there is no clarity on this yet.
What has been the outcome of PM CARES?
The Prime Minister Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) has allocated 2000 crores to supply 50,000 Made-in-India ventilators to government run COVID hospitals in all States and Union Territories. Apart from this, the Centre has disbursed ₹1000 crore from the PM CARES fund for the welfare of non-resident workers of different states.
The misgivings of PMNRF
The Congress had appointed Thakur, Vaidyanath Aiyar and Co. to audit the PMNRF funds during its rule. The founder of this company Rameshwar Thakur, was a lifelong Congressman. It is noteworthy that he was made an MP from the Rajya Sabha in 1984 by the Congress party who also went to become Minister of State for Finance and then the Governor of Odisha, Andhra Pradesh, Karnataka, and Madhya Pradesh. So during the Congress regime, the PMNRF comprising of Prime Minister, Finance Minister, Deputy Prime Minister from Congress party along with INC President was audited by a firm founded by a Congress party member.
When the opportunity to eliminate the audit firm came up in fiscal year 2017-18 under the Companies Act 2013, the Central government removed them and hired SARC & Associates. It was alleged by members of the Congress that its founder Sunil Kumar Gupta was close towards the BJP and posted pictures of him with BJP leaders. However, Mr. Sunil Kumar Gupta rubbed shoulders with many Congress leaders as well as seen below and hence can be seen as someone having friends across party lines.
The funds of PMNRF under the Congress regime went for purposes other than providing relief and support. It had donated multiple times to Rajiv Gandhi Foundation (RGF) – an extension of the Congress party with Priyanka Gandhi Vadra, P Chidambaram, Dr. Manmohan Singh, Rahul Gandhi and Sonia Gandhi as board members. In the year 2005-2006, the Annual Report of RGF makes a disclosure that the foundation received a donation from the PMNRF. The same disclosure is also made in the 2006-2007 and in 2007-2008 annual reports. The amount of such donation is not clear yet. RGF is currently in news due as it had received funds to the tune of 1 crore from the Chinese government in three years.
It is to be noted that during the period when Dr. Manmohan Singh was Prime Minister, he had little control over the affairs of the government as Sonia Gandhi ran the show from her residence in 10 Janpath. Since Antonia Maino of Italian origin was not allowed to become Prime Minister (thanks to the timely intervention of Dr. Subramanian Swamy and the late former President Dr. APJ Abdul Kalam), the National Advisory Council (NAC), an unconstitutional decision making body for the Gandhi family to exercise control over the administration was created. In fact, the NAC files reveals that it was Sonia Gandhi who was indeed the ‘Super PM’ having complete control on the decisions taken by Manmohan Singh. So, it is possible that the misappropriation of funds from PMNRF to RGF is a doing of Sonia Gandhi.
The PMNRF is a fund comprising of contributions from the citizens of India. In essence, the public money that was meant for providing relief during calamities and to assist acid attack victims, heart patients, cancer patients, etc was diverted to a private foundation that has links with the Communist Party of China.