PM CARES FUND

 

INDEX

REFERENCE WITH UPSC-CSE SYLLABUS

• WHY IN NEWS
• Section 2(h) of RTI Act, 2005
• BACKGROUND
• KEY POINTS
• PRIME MINISTER NATIONAL RELIEF FUND (PMNRF)
• COMPARISON BETWEEN PM CARES AND PMNRF
• ARGUMENT IN FAVOUR 
• ARGUMENT AGAINST
• CHALLENGES
• RELEVANCE OF TOPIC RELATED TO POLITY
• CONCLUSION

EXPECTED PRELIMS QUESTIONS

EXPECTED MAINS QUESTIONS

REFERENCE WITH UPSC-CSE SYLLABUS

• General Studies-II
• Separation of Powers between various organs Dispute Redressal Mechanisms and Institutions.
• Government Policies and Interventions for Development in various sectors and issues arising out of their Design and Implementation.
• Important Aspects of Governance, Transparency, and Accountability, E-governance- applications, models, successes, limitations, and potential; Citizens Charters, Transparency & Accountability and institutional and other measures.

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WHY IN NEWS

• From Ministries, government agencies, departments, etc, Oceans of money are being diverted to the fund as “contributions” every day an appeal challenging the legality of the PM Cares Fund in the Supreme Court has alleged.
• Unimaginable and unfathomable amounts of public money is pumped unabatedly everyday, into the coffers of the Fund petitioner Divya Pal Singh, a resident of Uttar Pradesh has alleged.
• Children upto the age of 18 years, who were orphaned due to the coronavirus disease (Covid-19) pandemic central government has decided to give free health insurance of ₹5 lakh.
• To pay the premium Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES) will be used.
• Right to Information request related to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES Fund) was denied by The Prime Minister’s Office (PMO).
• Under RTI Act, PM CARES is not a public authority: PMO

BACKGROUND

• Set up in 2020 PM CARES Fund is a public charitable trust. 
• After the coronavirus outbreak, it was launched by Prime Minister Narendra Modi.
• The objective was to deal with any kind of emergency like covid and also to accept donations and provide relief during the Covid-19 pandemic and similar pandemic-like situations in the future.
• Chairperson Prime Minister Narendra Modi.
• Senior cabinet members as trustees(Minister of Defence, Minister of Home Affairs, and Minister of Finance) 

KEY POINTS

• Voluntary contributions from individuals/organizations make up the fund.
• In a pro bono capacity any person appointed as Trustee shall act.
• NO budgetary support.
• Comptroller and Auditor General (CAG) of India will not audit it.
• The audit will be by independent auditors who will be appointed by the trustees.
• 100% exemption under the Income Tax Act, 1961 can be avail if donated to this fund.
• For receiving foreign donations a separate account has been opened and the fund has also got exemption under the FCRA (Foreign Contribution and Regulation Act), 1976.
• Corporate Social Responsibility (CSR) expenditure under the Companies Act, 2013 - donations to the fund would qualify for 80G benefits.
• Foreign countries individuals and organizations can also donate.
• In Foreign Contribution (Regulation) Act, 2010 PM CARES Fund has received an exemption from the operation of all provisions.
• Indian Trust Act, 1882 in section 3 defines trust as the means the transfer of property by one person (the settlor) to another (the trustee) who manages that property for someone else (the beneficiary) benefit.
• Private trusts and public trusts, two types of trusts in India. 
• Private trusts are govern by Indian trusts Act, 1882.
• Laws like The Charitable and Religious Trust Act, 1920, The Charitable Endowments Act, 1890 etc, governs the Public trusts which include religious and charitable trusts.
• Under Section 2(15) of the Income Tax Act, Charitable purpose includes relief to the poor in the form of medical aid, education, or through any other object of public utility.
• Prime Minister can nominate Three trustees to the Board of Trustees who shall be eminent persons in the field of research, law, health, science, social work, public administration, and philanthropy.
• SDMAs are not dependent on donations.
• State laws governed CM’s Relief Funds.
• Central laws governed PM CARES and State Disaster Management Authorities (SDMAs) 
• CM’s Relief Fund donation is not qualified as CSR while donations to PM CARES Fund and State Disaster Management Authorities (SDMAs) qualify as CSR.

Section 2(h) of RTI Act, 2005

• Meaning of Public authority is any foundation or authority or self-government body established or constituted—
• (a) by or under the Constitution;
• (b) by any law made by Parliament;
• (c) by any law made by State Legislature;
• (d) by notification issued or order made by the appropriate Government,

and includes any—

• (i) controlled, body owned, or substantially financed;
• (ii) non-Government organization substantially financed,
• directly or indirectly by funds delivered by the suitable Government;

Prime Minister’s National Relief Fund (PMNRF)

• In the year 1948 to assist displaced people from Pakistan after the partition of India Prime Minister’s National Relief Fund (PMNRF) was established
• Later it was extended to provide immediate relief to families of those killed in natural calamities, to the victims of major accidents, riots medical treatment like heart surgeries, kidney transplantation, cancer treatment, and acid attack, etc.
• NO budgetary support only voluntary contribution
• It is documented as a Trust under the Income Tax Act.
• 100% deduction from taxable income under section 80(G) of the Income Tax Act, 1961.
• Prime Minister is the Chairperson
• Helped by Officers/ Staff on an honorary basis.

COMPARISON BETWEEN PM CARES AND PMNRF

PM CARES FUND	PMNRF
Set up as trust	Set up as trust
2020 establish	1948  establish
Donation as low as Rs 10 in the PM CARES Fund.	The minimum amount one can donate is Rs 100.
Exclusively used for COVID-19 purposes, to help people affected by COVID-19 pandemic.	to support the displaced people from Pakistan during Partition it was  created by Jawaharlal Nehru Later to provide support for people affected by natural and manmade disasters.
voluntary donations	voluntary donations
No budgetary support.	No budgetary support.
Chairman Prime Minister of India.	Chairman Prime Minister of India.
Can receive foreign contribution	Can receive foreign contribution
Defence Minister, Home Minister and Finance Minister are also members of the PM CARES Fund	Tata Trusts, representatives of FICCI, Congress President are also members

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ARGUMENT IN FAVOUR 

• Need of the hour due to corona pandemic claimed by the government.

ARGUMENT AGAINST

• Why establishing a new fund when PMNRF already exists several opposition leaders and other prominent people have questioned.
• Trust deed has not been made public some have questioned the opacity surrounding the PM-CARES fund.
• Weather Voting rights are given to a member or not is not told to public.

CHALLENGES

• Many reports say that it has received a huge amount of donations.
• As being a public account PM CARES vast sums of money have been collected by the government of India
• But the accountability of money is not known.

RELEVANCE OF TOPIC RELATED TO POLITY

• Article 266(2) of the Constitution says

All other public moneys received by or on behalf of the Government of India or the Government of a State shall be credited to the public account of India or the public account of the State, as the case may be.

• For this Auditing is a must.

CONCLUSION

• PM-CARES fund lacks transparency. 
• In registering the trust, accepting foreign contributions under FCRA, obtaining exceptions under the Income Tax Act, and more whether due process of law was followed or not is known only when it comes under RTI truth will be known to the public.
• Auditing is required so the public can also have faith in government.
• Prime Minister Narendra Modi as Chairperson, senior cabinet members as trustees(Minister of Defence, Minister of Home Affairs, and Minister of Finance), and by saying that PM CARE FUND is not a public authority the government has killed the essence of democracy.

EXPECTED PRELIMS QUESTIONS

Q1. Consider the following statement regarding the PM-CARES fund 

(A) Set up in 2020 PM CARES Fund is a public charitable trust. 

(B) Chairperson OF PM CARES fund is Home Minister.

Which of the following statement is correct?

(1) a only

(2) b only 

(3) Both a and b

(4) Neither a nor b

SOLUTION

STATEMENT A is correct because set up in 2020 PM CARES Fund is a public charitable trust. 

STATEMENT B is incorrect because Chairperson is Prime Minister Narendra Modi.

 

Q2. Consider the following statement regarding PMNRF

(A) Defence Minister is the Chairman of PMNRF  

(B) Budgetary support is given to PMNRF

Which of the following statement is correct?

(1) a only

(2) b only 

(3) Both a and b

(4) Neither a nor b

SOLUTION

STATEMENT A is incorrect because Prime Minister is the Chairman of PMNRF 

STATEMENT B is incorrect because NO budgetary support only voluntary contribution

 

Q3. Consider the following statement 

(A) 50% exemption under the Income Tax Act, 1961 is given when donated in PM CARE.

(B) Comptroller and Auditor General (CAG) of India audit are done in PMNRF.

Which of the following statement is correct?

(1) a only

(2) b only 

(3) Both a and b

(4) Neither a nor b

SOLUTION

STATEMENT A is incorrect because 100% exemption under the Income Tax Act, 1961 is given.

STATEMENT B is incorrect because NO Comptroller and Auditor General (CAG) of India audit is done. 

 

EXPECTED MAINS QUESTIONS

Q. PM CARES Fund should be brought under the RTI Act? Discuss

Sources used:

The Hindu,The Indian Express, British Broadcasting Corporation News, Press Trust of India, Business Standard, The Economic Times