PM CARES vs. PM National Relief Fund (PMNRF)

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This post has been written by Diksha  Dubey , a second year student from Amity Law School, Amity University, Chattisgarh.

The recently launched Prime Minister’s citizen assistance and relief in emergency situations fund or the PM CARES fund and the already established Prime Minister’s Relief Fund i.e (PMNRF) have similar characteristics except for slight differences  in their setup, a comparison of public information of both these funds show.

The PMNRF was established more than 70 years ago and caters to emergencies, calamities and to emerging medical expenses. Whereas , the PM cares fund goes a step further and caters to research , infrastructure and to the pharmaceutical and healthcare sector. Other than this,  the funds share similar traits such as no budgetary support, exemption from income tax, the permission of foreign contributions and honorary service of those involved in the functioning of these trusts. On march 28, amid the ongoing covid-19 pandemic, the government announced the formation of the PM CARES fund. This fund would be the third fund to be administered by the Prime Minister’s office (the other two being the PMNRF and the PM’s Defence fund).

Also, while the PMNRF has a setup that includes the prime minister and finance minister, the president of indian national congress, a representative of industry and commerce and that of the Tata trustees, the PM CARES keeps the setup to the prime minister and the minister of finance, defence and home affairs.

Difference between PM CARES fund and PMNRF

COMPARISON PM CARES PMNRF
Date of establishment 27 March, 2020 January, 1948
Purpose To help poor people affected by covid-19 To help those displaced from Pakistan during partition
Chairman Prime Minister of India Prime Minister of India
Members The Home minister, Finance minister and Defence minister are members of the trust while the prime minister can nominate 3 other eminent personalities from different areas as members of the trust Congress president and representative of FICCI and Tata trusts
Expenditure on To deal with any kind of emergency like covid-19 pandemic To deal with natural calamities, accidents and riot victims and for medical treatment like kidney transplant, heart surgery , acid attack and cancer treatment etc.

During the meeting held on 23 March 2020, the trustees of PM CARES fund decided to appoint M/S SARC associates chartered accountants , New Delhi as auditor of PM CARE fund for 3 years. This firm is headed by Sunil Kumar Gupta, who audits the PM national relief fund also. Whereas, the PMNRF is audited by an independent auditor outside the government currently , M/S SARC associates chartered accountant is its auditors. The responsibility of the trustees in PM CARES has been defined, unlike in the Prime Minister National Relief Fund (PMNRF). The latter has no provision of an advisory board. A senior BJP functionary said congress was objecting to PM CARES because the congress president had not found a place in it unlike in the PMNRF. The idea is not to make the PM CARES fund political in any sense. There is no BJP representation on the PM CARES fund- people will be on the trust based on their positions in government.

“PM CARES” objectives include undertaking and supporting relief or assistance of any kind relating to a public health emergency or any other kind of emergency, calamity or distress either man-made or natural, including the creation or upgradation of healthcare or pharmaceutical facilities other necessary infrastructure, funding relevant research or any other type of support.

The trustees/ Board members

The PMNRF according to a Press Information Bureau document from Jan 24, 1948 carrying an appeal by PM Nehru, the PMNRF is a trust consisting of the following committee:-

  1. Prime Minister
  2. Deputy Prime Minister
  3. Finance Minister
  4. President of Indian National Congress
  5. A representative of the Tata Trustees
  6. A member of industry and commerce, as decided by the Federation of Indian Chamber of Commerce (FICCI).

According to PMNRF “The disbursement out of the fund is made at the discretion of the prime minister and in accordance with the prime minister’s directions”. The fund has been functioning under the discretion and directions of the prime minister since 1985, when the committee entrusted the entire fund to the prime minister, as noted here by the Delhi High Court.

In many ways, Modi’s PM CARES could be a more democratic and constitutional way of building a war chest for crisis situations like the present corona virus pandemic and for other exigencies in the future than the PMNRF was till date. Under PMNRF the criterion for disbursement of money and selection of benefeciaries  is purely at the ‘discretion of the PM and in accordance with the PM’s directions. Modi’s PM cares now delegates that power of deliberation and decision making to three other minister of the government, who handle some of the most crucial portfolios. It is a great step that assures people that the money that they will contribute will be used solely for fighting corona virus. At this point the PM CARES fund is a critical move not just for victims of the pandemic but also for those people whose lives have been adversely affected by the lockdown. Nobody has stopped people from donating to PMNRF. But the money is used for other purposes as well. Regardless of its inadequacy to meet the corona virus pandemic, PMNRF’s role in mitigating the impact of disasters and rebuilding human lives in the past has been invaluable. It receives thousands of requests every year for medical help from citizens. While not everyone is obliged with help, PMNRF has over the years consistently fonded the medical treatment of those in need.

Objective

Modi’s PM CARES- Fight corona virus

Nehru’s PMNRF- Help 1947 partition victims

PM CARES was formed by Nehru in 1948 before constitution came into force.

PM CARES trust will take decisions on allocations and selecting beneficiaries with collective wisdom of ministers and nominated members. While in PMNRF since 1985, the decision to allocate money and selecting beneficiaries was done only at ‘discretion and on recommendations of the PM’.

What are some of the concerns around it?

  1. As of December 2019, the PMNRF had an unspent balance of Rs. 3800 crore in its corpus. Opposition leaders have questioned the need for a new PM CARES fund given that the PMNRF has similar objectives.
  2. It is not clear whether the fund comes under the ambit of the RTI act or oversight by the comptroller and auditor general of India, although independent auditors will audit the fund.
  3. The PMNRF provides annual donation and expenditure information without any detailed breakup.
  4. The PM CARES webpage is opaque regarding the amount of money collected, name of donors, the expenditure of the funds so far.
  5. The PM CARES fund’s trust deed is not available for public scrutiny.
  6. The decision to allow uncapped corporate donations to the fund to count as CSR expenditure – a facility not provided to PMNRF or the CM’s relief fund- goes against previous guidelines stating that CSR should not be used to fund government schemes.
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