Gadbadjhala: Mystery that is PM CARES

Keeping in mind the need for having a dedicated fund with the primary objective of dealing with any kind of emergency or distress situation, like that 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) was set up.

PM CARES Fund has been registered as a Public Charitable Trust. The trust deed of PM CARES Fund has been registered under the Registration Act, 1908 at New Delhi on March 27, 2020. During 2019-20 (from March 27 to 31, 2020), an amount of Rs. 3,076.62 Crore has been collected under PM CARES Fund. Till now, the amount collected during 2020-2021 has not been reflected in the website: https://www.pmcares.gov.in/en/web/page/about_us

In pursuance of an appeal by the then Prime Minister, Pt. Jawaharlal Nehru in January, 1948, the Prime Minister’s National Relief Fund (PMNRF) was established with public contributions to assist displaced persons from Pakistan. The resources of the PMNRF are now utilised primarily to render immediate relief to families of those killed in natural calamities like floods, cyclones and earthquakes, etc. and to the victims of the major accidents and riots. Assistance from PMNRF is also rendered, to partially defray the expenses for medical treatment like heart surgeries, kidney transplantation, cancer treatment and acid attack etc.

The PMNRF consists entirely of public contributions and does not get any budgetary support. The corpus of the fund is invested in various forms with scheduled commercial banks and other agencies. Disbursements are made with the approval of the Prime Minister. PMNRF has not been constituted by the Parliament. The fund is recognised as a Trust under the Income Tax Act and the same is managed by Prime Minister or multiple delegates for national causes. PMNRF operates from the Prime Minister’s Office, South Block, New Delhi-110011 and does not pay any license fee. PMNRF is exempt under Income Tax Act, 1961 under Section 10 and 139 for return purposes. Contributions towards PMNRF are notified for 100% deduction from taxable income under section 80(G) of the Income Tax Act, 1961. Prime Minister is the Chairman of PMNRF and is assisted by Officers/ Staff on honorary basis. (More about PMNRF here: https://pmnrf.gov.in/en/about)

The balance as on March 31, 2020 is Rs. 4,393.19 crores as reflected in the website. The following two paragraphs contrast and compare both the funds. The differences (contrast) are given in the table below:

The similarities are enlisted below:

Both PMNRF & PM Cares

● funds do not require approval from Parliament for spending.

● are exempting donations from Income Tax under Section 80G. The contribution towards PMNRF is 100 % tax deductible under Section 80 G of the Income Tax Act. As per the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 issued by the Finance Ministry on 31 March 2020, donations made to ‘PM CARES’ fund would be 100% tax exempt under Section 80(G).

● cannot be utilised without the directions of the Prime Minister.

● have the same auditors M/S SARC Associates Chartered Accountants, New Delhi.

● receiving donations by companies are classified as Corporate Social Responsibility (CSR) under Companies Act 2013.

● do not receive budgetary support.

● are set up as trusts.

● can receive foreign contributions. They are exempted from Foreign Contribution Regulation Act (FCRA).

● are not audited by Comptroller and Auditor General (CAG). This is one of the criticisms of both the Funds, despite both of them being audited by an Independent third-party auditor.

A single judge bench of the hon’ble High Court of Delhi had held in 2015 that the PMNRF was amenable to the RTI Act. The single bench verdict came in the W.P(C)-3897/2012 -Prime Minister’s National Relief Fund vs Aseem Takyar. In the appeal filed by the PMNRF against the single bench verdict, the division bench of the hon’ble High Court of Delhi delivered a split verdict on May 23, 2018, in the case LPA 231/2016 & C.M. 13063/2016 (for stay) – Prime Minister’s National Relief Fund vs Aseem Takyar. While Justice Sunil aur (now retired) held that PMNRF was not a “public authority” within the definition given under the RTI Act, Justice S Ravindra Bhat (now a hon’ble apex court judge) held that the fund was a “public authority” as defined under the Act. In view of the divergence in views among the judges of the division bench, the matter was referred to a larger bench. The reference is still pending. 

PMNRF is not a public authority under Right to Information (RTI). It is still not clear whether PM CARES comes under the ambit of Right to Information (RTI) Act. Time and again, when information on the PM CARES fund was sought through RTI, the information has been declined on some technicalities or the other. Owing to flip-flops of the government like an Olympic gymnast, it is not still clear even after the waters have flown across the Ganges.

The doctors’ associations at the All India Institute of Medical Sciences, New Delhi objected to a circular from the hospital’s administration, indicating that a day’s salary would be deducted from their accounts and donated to the PM CARES Fund. The AIIMS administration ultimately withdrew their circular and accepted a proposal that doctors could opt in to a scheme to donate to the fund or could donate to any charitable organisation of their choice, on a purely voluntary basis. Similar proposals for mandatory or opt-out donations were subsequently withdrawn from three other hospitals based in Delhi following protests from doctors’ associations: Safdarjung Hospital, Atal Bihari Vajpayee Institute of Medical Sciences (ABVIMS)-Ram Manohar Lohia (RML) Hospital, and Lady Hardinge Medical College and Hospital.

On April 19, 2020, the Revenue Department of the Finance Ministry issued a circular indicating that one day’s salary per month, from April 2020 to March 2021, from each employee would be redirected to the fund unless employees who were “unwilling to donate” indicated their unwillingness in writing to their departments. The move was criticised by government employees, who noted that this amounted to 12% of a month’s salary for government employees, many of whom could not afford to release the funds. The former Comptroller-General of Defence Accounts stated that the opt-out system left employees vulnerable to professional consequences if they did not donate. Other government employees objected on the grounds that it constricted their ability to choose to donate to other relief funds, such as state’s Chief Minister Relief Funds. Following public criticism, on April 30, 2020, the Revenue Department amended this circular, making the donation opt-in instead of opt-out, and asking employees to write in if they wished to donate a day’s salary every month to the PM CARES Fund. 

Similarly, on April 20, 2020, the Delhi University administration was criticised after funds collected for a donation specifically to the National Disaster Relief Fund (NDRF) were redirected to the PM CARES Fund without disclosing this to donors. Delhi University officials stated that the funds were redirected on orders from the Ministry of Human Resources Development of the Government of India. The Delhi University Teachers’ Association wrote a letter of objection to the Delhi University administration, noting that the University had traditionally supported the NDRF or Chief Minister’s Relief Fund either through local Staff Associations or through the Vice Chancellor’s Relief Fund, and that the redirection of funds without disclosure constituted a betrayal of trust. 

The point is that the PMO operates the Fund, but says it cannot supply any information about the PM CARES Fund because it is not a public authority. If the fund is private, then who allowed 100% deduction under 80-G. If the PM CARES Fund is unconnected with the Government, then the Fund could become an office of profit. And that could disqualify him and the three Ministers from holding those constitutional offices. It becomes an office of profit/misuse issue. The PM CARES Fund centralises the collection of donations and its utility, which is not only against the federal character but also practically inconvenient in any other democracy, this statement would have cost the PM his chair. As we are slowly slipping towards a ‘one nation one party’ rule, which is closest to autocracy, it amounts to exploiting the citizens to fill his coffers. Already the roof of democracy has crashed down like a pack of cards as the four pillars holding it are at various stages of erosion and collapsing.

The Fund also exempted the donations under Corporate Social Responsibility (CSR) and relaxed FCRA rules. The government in haste amended the companies act to include the PM-Cares fund. Using gov’t agencies in an advertising blitzkrieg. All the rungs of the bureaucracy were forced to contribute a day’s salary every month for one year in the garb of Covid-19 management, which was messed up. It was more of a rule than exception. This included banks, PSUs, corporations, statutory bodies and also private sector who did not have money to pay the salaries of the employees but contributed to the coffers fearing a backlash from the regime on their books by way of ED, IT raid. Business houses which run the fourth estate were afraid that they may be deprived of government tenders and advertisements. How the term PM was used if it is private. How the Union ministers are its trustees? The PM chairs a public authority that was used to ask for funds. Earning money, hoodwinking the citizens seems to be the ulterior objective. The domain name given is ‘.gov.in’ which is usually given for government websites only. 

It is the hard-earned money earned by the sweat of all types of collared workers who contributed under the duress and fear of both Covid-19 on one hand, and the likely victimisation on the other hand which set the cat among the pigeons. There was high pressure from the bosses of these workers, and no transparency meant scope for lot of fraudulent activities. This include the diversion of funds from PM-Cares towards purchase of ventilators, Covid-19 kits for the medical fraternity which were mostly faulty, that failed at the time of need which would be a topic for another article. 

Government employees who refused to donate money to PM CARES fund were asked to furnish their reasons for refusal in writing. It was a lot of arm-twisting. Employees in all categories-railwaymen, bankers, PSU employees, soldiers of the Armed forces were forced to shell out money for PM CARES. We may be the only nation that took money from the citizens instead of putting money in their hands. According to the Indian Express, as on December 18, 2020, soldiers of the Indian Army contributed Rs 203.67 crore from their salaries to this private fund.

PM CARES is the second biggest financial scam in Modi 2.0, the first being demonetisation in Modi 1.0. Rs. 205 cr donated from salary of staff of PSU banks which is other than the donation from the bank too. This too when the wage increment of PSBs staff pending since November 2017 even when MOU signed in July 2020. Public sector or government will never force for donation to private institution. This amounts to misleading the nation. The MPLAD was forcibly put into PM CARES. All the Central government employees were forced to forgo their Dearness Allowance (DA) given to offset the increase in prices for one and half years. All pensioners were forced to forego their Dearness Relief for one year. The government platform was used with zero accountability of the funds collected. The government machinery was (mis)used to advertise PM CARES in India and abroad. Corruption and abuse of power par excellence!!! PM-Cares, but privately!!!!

Thus, the amount collected by it does not go to the consolidated fund of Government of India. It is akin to a chit-fund by a private firm. It may be a political campaign fund to sponsor one party, an election fund of the ruling dispensation, made for the PM, by the PM of the PM. 

Important reasons that define the PM-CARES fund as a public authority, and hence liable to share the information under the Right To Information Act (RTI). 

The government has been stonewalling the responses to several queries raised by several activists, civil society related to the fund have been denied claiming that PM CARES is a ‘charitable trust’ and not a ‘public authority’. The definition of a Public Authority under the RTI ACT – “any authority or body or institution of self-government established or constituted by notification issued or order made by the appropriate Government.” The setting up of the PM-CARES Fund was notified to the public on March 28, 2020 by the Ministry of Corporate Affairs saying, “The Government of India has set up the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund.” This clearly means that the Government of India has control over it. 

The office of the PM-CARES Fund is in the Prime Minister’s Office in Delhi. Just like as the PM is Chairperson of the Prime Minister’s National Relief Fund or PMNRF, the PM is also Chairperson of PM CARES also. In 2007, the then Chief Information Commissioner, Wajahat Habibullah passed an interesting order about the Prime Minister’s Relief Fund. He said, “Since PMNRF information is held by the PMO as a public authority, they are obliged to share it with citizens under the RTI Act.” Going by that same logic PM CARES should also come under RTI, since it is also controlled by the PMO.

Usage of GOV.IN in its Domain Name-pmcares.gov.in is the website address of the PM CARES Fund. But the government guidelines say a GOV.IN domain name can be allotted to six categories of offices or public authorities:

• Apex offices like the President of India or the Prime Minister’s Office
• Govt Ministries or Departments
• State and Union Territory offices
• India’s Parliament
• Judicial bodies
• All other legislative bodies and government institutions.

Does the PM CARES Fund fall under any of the above-mentioned categories? The guidelines make it amply clear that only bodies created by law and attached to the institutions of the government of India are allowed such registration. In one of the RTI responses, by accepting that this is the provision under which the PM Cares website was registered under gov.in, the government has now virtually admitted that the fund also comes under RTI.

Blatant (mis)use of government machinery 

The government machinery has been used blatantly to promote PM CARES. Following are some of the instances-The PM Modi, at a video conference with the heads of Indian Missions across the world on March 30, 2020, advised them to publicise the new PM CARES Fund to mobilise foreign donations. Now the pertinent point is – Can govt officials and govt machinery be used to publicise PM CARES if it is only a charitable trust? The Singapore government refused to allow official channels to promote PM CARES as it called itself as a charitable trust. The Indian Embassy in Moscow gave wide publicity on the Embassy website and social media pages as per the RTI reply given to one of the activists. Would any other charitable trust ever get publicity on any Indian Embassy website? Quite unlikely.

Everything was done in haste – tax exemption relief was given to PM CARES donations. On March 31, 2020, just two days after PM CARES was announced, a government Ordinance amended provisions of the Income Tax Act. As a result, a donation made to the PM CARES Fund would be eligible for 100% tax deduction. This was clear use of government machinery to promote PM CARES. Similarly, a day after the launch of PM CARES, the Ministry of Corporate Affairs issued a notification saying, “Any contribution made by a Company to the PM CARES Fund shall qualify as Corporate Social Responsibility, or CSR.” 

Points to ponder: 

1. Compelling reasons and exigency of circumstances to form PM-Cares?

2. Advantages of forming a new fund when the PMNRF already exists?

3. How come the GOI logo/email ids are being used to solicit for funds and their websites?

4. Why did the PM abuse his position to get donations for a private fund?

5. Why is the PM CARES fund shrouded in secrecy?

6. Tomorrow, if there is a change in the government, will the new PM have control upon it?

7. Will the funds have a smooth transition to the new dispensation or will it be empty by then?

Conclusions: 

The replication of PMNRF seems to indicate that there is no purpose for the creation of this other than presenting the people with some ‘showpiece’ measure and telling the public that the government is taking huge measures to fight the pandemic while it is actually not. It has given rise to a lot of debates, opinions, interpretations and assumptions. The true rationale of setting up a new fund despite the existence of PMNRF with similar objectives can be explained only by the present government if it believes in democratic values, ethics & transparency in the management of public funds. It is an obvious scam so much wrongs have happened with the way money has been collected forcefully using the PM’s public office & name and then state that it is not public fund, it is outside the ambit of CAG etc.

*Views expressed are the author’s own.

Related:

Is the PMCARES Fund using the national emblem illegally?

Plea in Bombay HC seeks CAG audit of PM CARES fund  

Plea in SC demanding transfer of funds from PM CARES to NDRF

Appellate Authority also says PM CARES not public authority

PM CARES not a Public Authority says PMO, in response to RTI query